Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Transportation Economics > Part 2 > Flashcards

Part 2 Flashcards

1
Q

What two things should a successful shipowner focus on?

A
  • The change in world economy and world political conditions
  • The changes in the shipping market
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is the starting point in the Shipping Market Supply/Demand Model?

A

Balance of supply and demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

How are freight rates affected in the Shipping Market Supply/Demand Model?

A

Imbalance between supply and demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What can a change in frieght rates prompt?

A
  • Ordering of new ships, scrapping of old ones
  • change in the performance of the fleet
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What does a change in freight rates determine in terms of supply?

A

How supply responds to changes in demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What generates most of the demand for sea transport?

A

World Economy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

List all:

Five Factors affecting the demand
for sea transport

A
  1. World Economy
  2. Seaborne Commodity
  3. Average Haul
  4. Transport Costs
  5. Political Events
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

List all:

Five Factors affecting the Supply
for sea transport

A
  1. World Fleet
  2. Fleet Productivity
  3. Ship Building Productivity
  4. Scrapping and losses
  5. Freight Rate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the three aspects of the world economy that may change the demand for sea transport?

A

Business cycle, trade elasticity, trade development cycle

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is an important cause of short term volatility in seaborne commodity trades?

A

Seasonality of some trades

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Which agricultural commodities are subject to seasonal variations caused by harvests?

A

Grain, sugar, citrus fruits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

When do grain exports from the US Gulf reach a trough and build up?

A

Summer, September

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

During which seasons is more oil shipped in the oil business?

A

Autumn, early winter

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

In terms of average haul, What does the demand for sea transport depend upon?

A

Distance of cargo shipment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How Shippers deal with transport of seasonal agricultural commodities?

A

Shippers of these commodities rely heavily on the spot charter market to meet their tonnage requirements

As a result, fluctuations in the grain market have more influence on the charter market than some much larger trades such as iron ore where tonnage requirements are largely met through long-term contracts.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Seaborne commodity trades:

What are four types of change to look out for

A

1- changes in the demand for that particular commodity (or theproduct into which it is manufactured);
2- changes in the source from which supplies of the
commodity are obtained;
3- changes due to a relocation of processing plant which
changes the trade pattern; and
4- finally changes in the shipper’s transport policy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What does the demand for sea transport depend upon?

A

Distance of cargo shipment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

What is the distance effect referred to as in this context?

A

‘Average haul’ of the trade

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

How is sea transport demand measured?

How is Average Haul derived?

A

tonnage of cargo shipped, multiplied by the average distance over which it is transported.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What are examples of events that dramatically illustrate the effect on ship demand of changing the average haul?

A

Closure of Suez Canal, Closure of Dortyol pipeline

21
Q

Why has the average haul changed in most trades over the last few decades?

A

Due to demand and source of supplies changes

22
Q

Political disturbances

The term, ‘political event’ is used here to refer to

A

as a localized war, a revolution, the political
nationalization of foreign assets or even strikes

23
Q

What do many developments in sea trade depend on?

A

Economics of shipping operation

24
Q

Why will raw materials be transported from distant sources?

A

If cost can be reduced or major benefit obtained

25
Q

How has the industry seen a reduction in transport costs over the last century?

A

Improved efficiency, bigger ships, more effective organization

26
Q

Why is the supply of shipping services slow in responding to changes in demand?

A

Takes years to build and ships have long physical life

27
Q

What determines the rate of fleet growth in the long run?

The fleet refers to a group of ships or vehicles.

A

Scrapping and deliveries

28
Q

What is the Physical Life of a ship?

A

ships have a physical life of 15-30 years

So responding to a fall in demand is a lengthy business, particularly when there is a large surplus to be removed

29
Q

What is a key feature of the shipping market model?

A

mechanism by which supply adjusts when ship demand does not turn out as expected

30
Q

What is the average Economic life of a ship?

A

about 25 years

a small proportion of the fleet is scrapped each year, so the rate of adjustment to changes in the market is measured in years not months

31
Q

What is fleet productivity in the shipping industry?

The fleet refers to a group of ships or vehicles

A

Efficiency of ship operation

32
Q

How is fleet productivity Expressed?

The fleet refers to a group of ships or vehicles.

A

in ton miles per dwt per annum.

33
Q

How is fleet productivity calculated?

The fleet refers to a group of ships or vehicles.

A

Total ton miles divided by deadweight fleet

34
Q

What Plays an active part in the fleet
adjustment process?

The fleet refers to a group of ships or vehicles.

A

The shipbuilding industry

35
Q

What is shipbuilding considered?

A

Longcycle business

Due to delay between ordering and delivering a ship is between 1 and 4 years

36
Q

What is the delay between ordering and delivering a ship?

A

1-4 years

37
Q

What impacts the market prospects of specific ship types?

A

Peaks and troughs in deliveries

38
Q

What does Fleet Productivity Measure?

The fleet refers to a group of ships or vehicles.

A

Fleet productivity measures the efficiency with which ships (or vehicles) are operated. It considers factors like speed and waiting time. Even with a fixed fleet size, optimal utilization adds flexibility.

39
Q

Scrapping and losses:

What does the rate of growth of the merchant fleet depend on?

A

Balance between deliveries of new ships and deletions

40
Q

What factors affect the scrapping of ships?

A

Age, technical obsolescence, scrap prices, current earning and market expectation.

41
Q

What is the ultimate regulator that the market uses to motivate decision-makers to adjust capacity in the short term?

A

Freight rates

42
Q

What does supply respond to in the short run?

A

Prices

When prices change, ships can adjust their operation speed and move to and from layup (temporary storage or inactive status).

43
Q

What do freight rates contribute to in the longer term?

A

Investment decisions which result in scrapping and ordering of ships

44
Q

What is a point at which the supply curve interact with demand curve determining the agreed freight rate between charterer and shipowner at a certain point

A

Equilibrium Price

45
Q

How many time periods are there to consider?

A

three

Momentary Equilibrium
Short run Equilibrium
Long run Equilibrium

46
Q

Short-run or Long-run:

When shipowners have time to take delivery of new ships and shippers have time to rearrange their supply sources?

A

Long run Equilibrium

47
Q

Short-run or Long-run:

when there is time to adjust supply by short-term measures such as layup, reactivation, combined carriers switching markets or operating ships at a faster speed?

A

Short-run Equilibrium

48
Q

What is Momentary Equilibrium?

A

When the deal must be done immediately; describe the day to day position as prompt ships in particular loading area compete for available cargoes.

Transportation Economics (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions