Ocean Carrier Case Solutions
Case Study:
‘Ocean Carriers’
By:
Alyssa Linder
Wenliang Zhang
Xhangoli, Eva
1. Daily spot hire rates are determined according to supply and demand of the shipping capacity. According to the article, the supply of ships available equals the number of ships currently in the fleet plus any new ships added, minus any scrapings and sinking. According to Exhibit 2, there are a limited number of ships older than 24 years which are likely to be scraped. For those ships under the age group from 15 to 19, they will continue to provide supply and are not likely to be scrapped because a lot of them will get into the second hand market. The majority of the fleet is fairly young, and it looks as though an additional 63 vessels are on the books to be ordered in 2001. Therefore, it is more likely that the supply will go up. Demand for dry bulk capsizes is based on the world economy, specifically for the industries involved. Given that there is not a significant growth in the worldwide and in the relative industry; we predict that the demand of shipping capacity is more likely to stagnant. Also, as is shown in the article, Linn anticipated that the exports of iron ore and coal are not likely to take off until 2003, which give us a view that the imports of iron ore and coal would remain constant over the next two years. Since that 85% of the cargo carried by the ship is iron and coal, we are able to conclude that the demand will stay at a similar level of 2000. Based on the supply and demand outlook, we can assume that the hire rate for capesizes will most likely decrease, while the supply of shipping capacity is likely to increase and demand will be stagnate.
2. As mentioned above, the daily hire rates are influenced and determined by the supply and demand. The number of ships available is determined using the current number of vessels, the amount added to the fleet, and the scrapings. According to the article, when the market demand for shipping capacity
‘Ocean Carriers’
By:
Alyssa Linder
Wenliang Zhang
Xhangoli, Eva
1. Daily spot hire rates are determined according to supply and demand of the shipping capacity. According to the article, the supply of ships available equals the number of ships currently in the fleet plus any new ships added, minus any scrapings and sinking. According to Exhibit 2, there are a limited number of ships older than 24 years which are likely to be scraped. For those ships under the age group from 15 to 19, they will continue to provide supply and are not likely to be scrapped because a lot of them will get into the second hand market. The majority of the fleet is fairly young, and it looks as though an additional 63 vessels are on the books to be ordered in 2001. Therefore, it is more likely that the supply will go up. Demand for dry bulk capsizes is based on the world economy, specifically for the industries involved. Given that there is not a significant growth in the worldwide and in the relative industry; we predict that the demand of shipping capacity is more likely to stagnant. Also, as is shown in the article, Linn anticipated that the exports of iron ore and coal are not likely to take off until 2003, which give us a view that the imports of iron ore and coal would remain constant over the next two years. Since that 85% of the cargo carried by the ship is iron and coal, we are able to conclude that the demand will stay at a similar level of 2000. Based on the supply and demand outlook, we can assume that the hire rate for capesizes will most likely decrease, while the supply of shipping capacity is likely to increase and demand will be stagnate.
2. As mentioned above, the daily hire rates are influenced and determined by the supply and demand. The number of ships available is determined using the current number of vessels, the amount added to the fleet, and the scrapings. According to the article, when the market demand for shipping capacity