• B. Sc. in Naval Architecture and Marine Engineering Bangladesh University of Engineering and Technology M. Sc. in Naval Architecture and Marine Engineering Bangladesh University of Engineering and Technology Diplome Etude Complimantaire de 2em Cycle in Naval Architecture and Transport System Analysis University of Liege, Belgium Ph. D. in Naval Architecture and Ocean Engineering Osaka University, Japan

Lecture Contents
• Shipping’s economic environment
– – – – – – – – – – – – – – The demand for marine transportation The supply of marine transport The freight market Operating economics The basic interest relationship Economic criteria Practical cash flow Some economic complexities A complex cash flow example Application The general approach Comparison of alternative ship design The optimal ship The wider scene

• Engineering economy calculations

• Application to ship design

Why Economics of Ship Design/Marine Transportation? – to show how the economics and ship design related – to help the practicing designer who needs sufficient information to evaluate the technical and economic performance of alternative designs of ships and their equipments .

complying with all required social. giving full weight to technical factors in its calculation. – There has been increasing complexity in the financial conditions surrounding ship procurement.Economics for Ships • In the last few decades rigorous economic evaluations have been seriously applied to ships. Cheap loans. . The optimal design is that which is most profitable. accelerated depreciation. – The scope for making wrong decisions in the ship design has increased with expansion in ship sizes and types – The main criteria must be of economic nature. subsidies and tax relief add greatly to the difficulties of estimating ship profitability. safety and environmental regulations. mostly because.

Shipping’s Economic Environment .

evolved – Telegraph networks created further hikes of transport demand – Application of steam to ship propulsion enabled reliable shipping initially in short-distance trades. grains etc. Transporting passengers and high value cargoes drew the accent in the 19th century. iron ore. Steam propulsion and iron shipbuilding proved an unbeatable combination in world trade . – New demand for cargoes like bunker coal. – Industrial revolution increased the demand for raw materials especially for textile industry. as it happened to the present day airlines.The Demand for Marine Transport (Past) – Man has used boats and ships for commerce and trade for centuries.

and air altogether – Oil and container are now become more important than other cargoes .The Demand for Marine Transport (Present) – The present demand for marine transport massively increased for raw materials and manufactured goods – Freight rather than passengers. rail. more ton-kms of international freight are carried by sea than road. dominate the shipping.

Demand for Transport .

Quarterly GDP Growth % .

Growth of World Trade .

World Seaborne Trade .

Container Separated .World Seaborne Trade.

. from just over 8 thousand billion tonne-miles in 1968 to over 32 thousand billion tonne-miles in 2008.World Seaborne Cargo Over the last four decades total seaborne trade estimates have quadrupled.

World total Dry Bulk Trade Forecast .

World Total Liquid Bulk Trade Forecast .

The Supply of Marine Transport .

World Fleet Size .

World Fleet by Category Numbers of ships.597 TOTAL = 50.224 Bulk Carriers = 8.687 Container ships = 4. by sector.175 Passenger ships = 6. General Cargo Ships =16.831 Tankers = 13.054 as of 31st October 2010 .

New Ship Ordering .

World Fleet. Number of Ships .

Number by Country/Region .World Fleet.

DWT .World Fleet.

World Fleet. DWT by Country/Region .

GT .World Fleet.

World Fleet. GT by Country/Region .

Number of Ships. Service Fleet .

Service Fleet by Country .

Ferry and Passenger Cruise Fleet .

Why Marine Transport? .

US$/ton .Dry Bulk Rates.

Container Freight Rates .

Charter Rates .Container Ship.

The base rate is designated as worldscale100. For example.5 261.5 193. list the cost per tonne of oil to carry between designated ports in a 19. A list of average rates are shown in the table that attained in 2003 (% of W100) Route WorldSacle Dirty Tanker Arabian Gulf to West Arabian Gulf to East Mediterranean to US Atlantic Coast 105 140. Charter rates are typically quoted in an designated index.5 Clean Tanker Mediterranean to NW Europe Mediterranean to US Atlantic Coast 271. so the rate will be some percentage of the base rate.Worldscale for Tanker Worldscale is a unified system of establishing payment of freight rate for a given oil tanker’s cargo. These rates published almost annually.500 dwt tanker at 14 knot speed. A large table was created. Worldscale was established in November 1952 by London Tanker Brokers’ Panel on the request of British Petroleum and Shell as an average total cost of shipping oil from one port to another by ship. Wroldscale50 indicates that the freight rate per barrel of oil will be 50% of the published Worldscale between the designated ports. A larger tanker can carry crude more cheaply than a smaller one.5 .

Comparative Fuel Consumption Source: NTM (Swedish Network for Transport and the Environment) .

CO2 Emission by Transports Source: NTM (Swedish Network for Transport and the Environment) .

Exhaust Gas Emission by Transports Source: NTM (Swedish Network for Transport and the Environment) .

Seaborne Trade Value World Seaborne Trade approximating US$ 7 trillion annually .

Low Cost of Shipping by Sea .

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