Economics of Shipping Essay Example | Topics and Well Written Essays - 4750 words

Economics of transit - Essay ExampleThis paper deals with how different factors affect mess carriers look at and supply and how Baltic run dry Index be used to predict the demand and supply of teetotal Bulk Carrier for near three months. This paper also describes how recent global economic recession has caused decrease in steel production and thus decreases in global demand for iron, coal and minor multitude commodities and how this has affected the demand for pile carriers. The paper also deals with industry specific risk factors and how they sens affect the earnings of the companies provision bulk carriers.A bulk carrier is a merchant ship that is used to channel bulk freightage that is not packaged such as coal, ore and grains. The ship usually carries cargo in its cargo holds. It is a ship in which the cargo is carried as bulk. The bulk carriers were first made in 1852 simply with time, the economic forces caused these ships to become more sophisticated and caused t hem to increase in size. There ar two types of bulk carriers, wet bulk carrier and dry bulk carrier. The bulk carriers are dominating merchant ships. In terms of tonnage they comprise about one third of total worlds fleet. So far the worlds largest bulk carrier is able to carry about 365,000 metric tons of dead weight (DWT).The bulk carriers are divided into six main categories small, handy size, handy max, panamex, capsize, very large bulk carrier (VLBC) (MAN diesel Group, 2005, p. 3-4. ). Small bulk carriers have capacity of about 10,000 DWT and mini bulk carriers are most everyday amongst them. They have a capacity of about 500 to 2000 tons and are usually used for river transport. such(prenominal) ships easily pass under bridges and they have small crew. Handymax and Handy size have a capacity of more than 10,000 DWT and these two represent about 71% of all bulk carriers. Handymax ships have a capacity of about 52,000 DWT and have about four holds to carry cargo.Panamax canal s lock chamber limits the size of Panamax vessels. And it can accommodate ships with beam of up to 32.31m, a length of overall of up to 294.13m, and a draft of up to 12.04m (Autoridad del Canal de Panam, 2005, pp. 11- 12)Capesize vessels are very large vessels and have capacity of about 20,000 DWT. They carry cargo in the main like coal and iron. Large capacity capesize ships are specially designed to carry iron. Baltic Dry Index Baltic Dry Index is based on Baltic Exchange. This index is means of providing prices of lovesome materials transported by sea (Baltic Exchange, 2009).. The Baltic Exchange is a membership organization and its member is at the intent of world trade. Every day brokers around the world want to know how much it would cost to transport cargo around the world. These indices are made by assessment of international broking companies. The bulk cargo trade relies on the mutual agreement and cooperation of ship owners and brokers to ensure a smooth flow of busine ss(Baltic Exchange, 2009).. It is a rein of Baltic Exchange that all members should follow a code of business and abide by the rules. In case any member fails to follow rules then the member is expelled. There are about five-spot hundred companies and about two thousand people that are member of Baltic Exchange