Contents List of figures xi List of tables xvii List of boxes xxi Preface to the second edition xxiii Synopsis xxv Abbreviations xxix Glossary xxxii 1 The economic organization of the shipping market i The economic role of the shipping industry 2 The international transport system 7 The demand for sea transport 10 The world merchant fleet 19 The supply of sea transport 24 The role of ports in the transport system 29 The shipping companies who run the business 32 Politics versus economics in shipping 32 Summary 34 2 The shipping market cycle 37 2.1 Shipping cycles and shipping risk 38 2.2 Characteristics of shipping market cycles 40 2.3 The frequency of shipping cycles 45 2.4 Freight market cycles, 1869-1914 48 2.5 Market cycles, 1919-38 54 2.6 Market cycles, 1945-95 56 2.7 The return on investment in shipping 68 2.8 The prediction of shipping cycles 72 2.9 Summary 74 3 The four shipping markets 77 3.1 The decisions facing shipowners 78 3.2 The four shipping markets 78 3.3 The freight market 81 3.4 The sale and purchase market 96 3.5 The newbuilding market 107 3.6 The demolition market 110 3.7 Summary 111 4 Supply, demand and freight rates in 4.1 The shipping market model 114 4.2 The demand for sea transport 117 4.3 The supply of sea transport 128 4.4 The freight rate mechanism 139 4.5 Summary 147 5 Costs, revenue and financial performance 151 5.1 Cashflow and the art of survival 152 5.2 The cost of running ships 159 5.3 The capital cost and financial performance 172 5.4 The revenue calculation 175 5.5 Computing the cashflow 180 5.6 Summary 191 6 Financing ships and shipping companies 193 6.1 Ship finance and shipping economics 194 6.2 How ships have been financed in the past 195 6.3 The world financial system and types of finance 200 6.4 Financing ships with equity 205 6.5 Financing ships with debt 210 6.6 Finance for newbuildings 215 6.7 Leasing ships 217 6.8 Appraising risk on shipping investment 219 6.9 Ship finance and shipping market dynamics 220 6.10 Summary 223 7 The economic principles of maritime trade 225 7.1 Why study seaborne trade? 226 7.2 The countries that trade by sea 226 7.3 An explanation of trade theory 231 7.4 Theories about the pattern of trade 235 7.5 Economic growth and sea trade 238 7.6 Trade forecasting and the commodity trade model 243 7.7 Summary 247 8 The global pattern off maritime maritime trade 225 8.1 Introduction 254 8.2 The Westline theory 254 8.3 Geographical distribution of seaborne trade 264 8.4 Maritime trade of the Atlantic and East Pacific 266 8.5 Maritime trade of the Pacific and Indian Oceans 277 8.6 Eastern Europe and the former Soviet Union 284 8.7 Summary 284 9 Bulk cargo and the economics of bulk shipping 291 9.1 The commercial origins of bulk shipping 292 9.2The bulk trades 292 9.3The 'transport system' concept 294 9.4Handling bulk cargoes 298 9.5 Liquid bulk cargoes 303 9.6The five major dry bulks 314 9.7The minor bulk trades 328 9.8Refrigerated cargo 331 9.9The vehicle trade 333 9.10 Summary 334 10 The general cargo and the economics of liner shipping 337 10.1 Introduction 338 10.2The origins of the liner service 338 10.3Economic principles of liner operation 343 10.4Liner conferences and their regulation 348 10.5The components of liner service costs 351 10.6The liner service cashflow model 357 10.7Liner prices 358 10.8 The demand for liner services 360 10.9The liner shipping routes 366 10.10 The liner fleet 372 10.11 Container ports and terminals 375 10.12 Liner companies, consortia and alliances 376 10.13 Summary 378 11 The economics of ships and ship designs 381 11.1 What type of ship? 382 11.2Cargo type and ship design 385 11.3Fitting the ship to the shipping operation 390 11.4Ships for the liner trades 393 11.5 Ships for the dry bulk trades 401 11.6Ships for the liquid bulk trades 406 11.7Combined carriers 413 11.8Ships designed for a single commodity 414 11.9 Marine service vessels 416 11.10 Economic criteria for evaluating ship design 417 11.11 Summary 419 12 The regulatory framework of maritime economics 421 12.1 How maritime regulation affects maritime economics 422 12.2The institutions that regulate shipping 423 12.3Self-regulation and the classification societies 423 12.4The law of the sea 428 12.5The regulatory role of the flag state 431 12.6How maritime laws are made 440 12.7The International Maritime Organization and its conventions 443 12.8The International Labour Organization 448 12.9UNCTAD conventions 451 12.10 The regulatory role of the coastal states 452 12.11 Summary 453 13 The economics of shipbuilding and scrapping 455 13.1 Role of the merchant shipbuilding and scrapping industries 456 13.2Regional structure of world shipbuilding 456 13.3Shipbuilding market cycles 464 13.4The economic principles 467 13.5The shipbuilding production process 474 13.6shipbuilding costs and competitiveness 480 13.7The shipbreaking industry 484 13.8Summary 487 14 Maritime forecasting and market research 489 14.1 The approach to maritime forecasting 490 14.2 Preparing for the forecast 493 14.3 Forecasting methodologies 498 14.4Freight rate forecasting 500 14.5Market research methodology 506 14.6Forecasting problems 509 14.7 Summary 512 Appendix 1 An introduction to ship market modelling 515 Appendix 2 Tonnage measurement and conversion factors 523 Notes 527 References and recommended reading 541 Index 549