MARITIME COMMERCIAL MANAGEMENT DENİZCİLİK TİCARİ İŞLETMECİLİĞİ MARITIME COMMERCIAL MANAGEMENT

OVERVIEW There are over 140,000 ship and 170,000 ship owner and manager entries in maritime transportation industry. Ships are the least regulated mode of transportation. Ship represents a large capital investment that translates into a large cost per day. Port time is expensive and presents diseconomies of scale (port operations, the optimal size of ship). Generally, the longer a trade route is, the larger the share of sea-days in a voyage, and the larger the optimal ship size will be.

World Fleet Breakdown by Number of Ships Source: Shipping Facts

OVERVIEW Factors effect the optimal ship size; the utilization of ship capacity at sea (the “trade balance”), loading and unloading rates at the ports, the various costs associated with the ship. A ship is a long-term investment. The useful life of a ship spans 20–30 years. During the life of a ship a lot of market volatility may be encountered (eg; fluctation in freight rates In the short run the owner may reduce the daily variable operating cost by slow steaming (reduction in fuel consumption) the owner may lay up the ship till the market improves.

SHIP MANAGEMENT Ship management concerns all activities required to operate the ships effectively, except providing equity finance. The contract defines the ship management services; Crewing management Technical management Insurance arrangements for hull and machinery, and protection and indemnity (P&I) insurance. Commercial management Other services

SHIP MANAGEMENT The operational expenses are used to keep the ship in operation and vary per ship. Manning is the largest component of operational expenses OPEX. Expenses for ship finance and voyage operations are not OPEX. The ship manager is paid for its services with the annual management fee (roughly 5% of annual operational expenses).

MARITIME TRANSPORTATION INDUSTRY DIVISION AS PER TRAFFIC CARRIED

SHIPPING INDUSTRY The type of merchant vessel employed on a trade route is determined basically by the traffic carried. There were 3 main divisions; Liner Tramps Specialized vessels (tankers) A tramp may be put on a liner berth to compete for liner cargoes. Conversely liners may at times carry tramp cargoes.

INDUSTRY DIVISION ACCORDING TO SHIP TYPES Reason for the division; all ships have specific routes and all routes has specific trade and economic issues. Ships mainly divided into 3 groups as; Dry cargo ships (Bulk Ships,Containers,RO/RO etc) Tankers Others Dry bulk ships and tankers are operating in tramp trade. Container ships, MPV,Ro/Ro,Reefer operates in liner trade.

LINERS Operate on fixed routes and fixed sailing schedules,serving a group of ports. Involves an adequately sized fleet and a fairly large shore establishment. Compose ¼ of seaborne trade. Generally, cargoes loaded in containers. Enables unitization and carry heterogenous products General Cargoes: mainly consumption goods; clothes, TVs,computers.

LINERS After 90s container trade developed rapidly. Decrease after global crisis in 2008. Vessels are not loaded with one shipper’s cargo Even vessels are not full, voyage is completed as per schedule. Supplied vessel capacity is important. Joint voyage planning, sharing vessel,common use of port equipments; to keep in accordance with the voyage determined and rigth planning of capacity.

TRAMP Bulk; unscheduled and irregular shipments Terms: Common trader, general trader, free maritime transportation, unscheduled trader Ready to carry all types of dry bulk cargo from any origin port to destination port at any time and to provide the legacy and safety of the voyage. Cargo based. Low value cargoes: coal,grain,ores, timber; carried in complete shiploads.

TRAMP Many of the cargoes are seasonal. Homogenous characteristic, handled and carried in bulk forms. Ships:Mid sized, unequipped and unassigned for regular trade; with two to six holds,sub-standard. Often family owned companies tend to merge. Engaged under a document called a charter party; on a time or voyage basis.

SHIP DIMENSIONS Vessels have their names according to their characteristics. Panamax; the largest vessel that may pass Panama Canal safely. Capesize has the highest capacity and can not pass Suez Canal. Therefore trade route determined round Cape of Good Hope.

DRY BULK SHIPS AND CAPACITIES

DRY BULK SHIPS AND THEIR CARGOES

TANKER CLASSIFICATION **AFRAMAX: Average Freight Rate Assessment – Tanker freight tariff system.

TANKERS AND THEIR CARGOES

From Danish major Møller-Maersk to Japanese shipping giant Mitsui O. S From Danish major Møller-Maersk to Japanese shipping giant Mitsui O.S.K. Lines, Ship-technology.com profiles the world’s top 10 biggest shipping companies based on TEU (Twenty-foot Equivalent Unit) or weight carrying capacity of their containerships. Types of Tankers

General Factors Effect Dry Bulk Transportation Demand International trade volume International trade structure Worldwide geographical distribution of raw materials,agricultural and industrial products, finished and semi-finished goods production and consumption places. Essentials that form the market are especially market of the cargo, transportation routes and vessels used in maritime transportation. It’s important to understand the characterisrics of the cargo, its own market and specific routes of the transportation.

FIGURES Dry bulk cargo compose; 57% in tons, 47% in ton-miles basis of tramp trade volume. 33% of total maritime transportation in both tons and ton-miles basis. Only dry bulk vessels compose 34% of total world fleet.

TANKERS Cargo ships designed to carry crude oil, petroleum products,natural gas and chemical substances, liquefied natural gas (LNG), liquefied petroleum gas (LPG), vegoils,wines etc As a Tramp form, tankers have necessary technological infrastructure to carry such goods. Tankers cover 1/3 of world seaborne trade in tons carried. Oil crises,wars,political issues in world arena effects this industry more than the other maritime transportation industries. Therefore, compared to others tanker trade is fluctuating compared to others.

TANKERS Countries that export and import are distinct Importers; China, Japan and other Asian countries,European countries, US Exporters;Saudi Arabia and other Middle East countries, Iran, Iraq, United Arab Emirates and Kuwait; Latin America, North Sea countries like England and Norway. Routes are certain and long. Has a freight system; WORLDSCALE.

TANKERS The long distances between production and consumption areas effects the demand on transportation of the crude oil. Middle East countries with the 60% petroleum reserves are far from the consumption areas. From Cape of Good Hope to Europe: 12.000 miles; to Japan 6.000 miles Long routes, petroleum (as an important input) demand increase also increases the tanker trade in ton-miles.

FIGURES Tankers compose; %43 in tons, 53% in ton-miles basis of tramp trade. 38% of total maritime transportation in ton-miles basis. Considering dry bulk as 33% of total maritime transportation; in ton miles basis tanker has the highest portion. Tanker fleet accounts for 36% of world fleet.

10 biggest shipping companies From Danish major Møller-Maersk to Japanese shipping giant Mitsui O.S.K. Lines, Ship-technology.com profiles the world’s top 10 biggest shipping companies based on TEU (Twenty-foot Equivalent Unit) or weight carrying capacity of their containerships. 10 biggest shipping companies From Danish major Møller-Maersk to Japanese shipping giant Mitsui O.S.K. Lines, Ship-technology.com profiles the world’s top 10 biggest shipping companies based on TEU (Twenty-foot Equivalent Unit) or weight carrying capacity of their containerships.

1. A.P. Møller-Maersk - 2.8m TEU Danish company A.P. Møller-Maersk's container shipping division Maersk Line operates a fleet of 580 container vessels making it the world's biggest shipping company. The fleet includes 272 Maersk-owned vessels with a combined capacity of 1.7m TEU and 308 chartered vessels with a combined capacity of 1.1m TEU as of September 2014. Møller-Maersk, founded by Arnold Peter Møller in April 1904, is headquartered in Copenhagen, Denmark, and employs 88,909 people in 135 countries. It earned revenues of $47.39bn in 2013 and $35.85bn in the first nine months of 2014.

2. Mediterranean Shipping Company-2.43m TEU Mediterranean Shipping Company, based in Geneva, Switzerland, has an intake capacity of 2.43m TEU. Founded in 1970, MSC has a fleet comprising 471 container vessels. Its vessels call at over 316 ports worldwide and sail on more than 200 international trade routes. The privately-owned shipping line operates in 150 countries and employs more than 24,000 people.

3. CMA CGM - 1.55m TEU CMA CGM Group, France's leading container shipping company, operates a fleet of 428 vessels with a combined capacity of 1.55m TEU. The containers sail on 170 shipping routes, serving 400 commercial ports worldwide. CMA CGM Group was formed when Compagnie Maritime d'Affretement (CMA), founded by Jacques Saadé in 1978, acquired Compagnie Generale Maritime (CGM), a state-owned company that was privatised in 1996. The shipping line has presence in 150 countries, employs more than 18,000 people and earned revenues of $15.9bn in 2013.

4. American President Lines (APL) - 1.1m TEU American President Lines, headquartered in Singapore operates a fleet of 150 vessels with a combined capacity of more than 1.1m TEU. APL's containers have been spanning the world's major trade lanes for the last 165 years. The shipping conglomerate provides more than 80 weekly services across 95 countries and also facilitates inland reach through intermodal networks. APL was incorporated in 1848 in the US as Pacific Mail Steamship Company, which was bought by Neptune Orient Lines (NOL) in 1997.

5. Hapag-Lloyd - 1m TEU German shipping company Hapag-Lloyd merged with Chilean firm Compañía Sud Americana de Vapores (CSAV) in December 2014, which increased the conglomerate's fleet size to 200 vessels with a combined capacity of one million TEU - the world's fifth biggest. Approximately 100 liner services operated by Hapag-Lloyd merged with 40 services provided by CSAV across 112 countries. Hapag-Lloyd was founded in 1970 with the merger of Hamburg America Line or Hapag and North German Lloyd, both established in mid-1800.

6. Evergreen Line - 850,000 TEU Evergreen Line, a containerised-freight shipping company based in Taiwan, operates more than 190 ships with a combined carrying capacity of approximately 850,000TEU. Evergreen Line is a brand name established in 2007 to include five shipping companies within the Evergreen Group, namely Evergreen Marine Corp. (Taiwan), Italia Marittima, Evergreen Marine (UK), Evergreen Marine (Hong Kong) and Evergreen Marine (Singapore). The global carrier covers 114 countries and its busiest trade route is between the Far East and North America.

7. COSCO Container Lines (COSCON) - 786,252 TEU COSCO Container Lines or COSCON, a container transport company owned by China Ocean Shipping (Group) Company (COSCO), operates a fleet of 173 container vessels with a total capacity of up to 786,252 TEU as of December 2013. Founded in 1997, COSCON operates in more than 162 principal ports across 49 countries and employs 13,895 people. It is one of the world's biggest dry bulk carriers and has operations across 84 international shipping routes, 23 international feeder routes, 23 routes along coastal China and 79 routes in the Zhu Jiang delta and the Chang Jiang River. It reported revenues of $7.85m in 2013.

8. China Shipping Container Lines - 706,000 TEU China Shipping Container Lines (CSCL), based in Shanghai, operates 156 vessels with a total capacity of 706,000 TEU. An affiliate of China Shipping Group, CSCL was founded in 1997 and employs 7,000 people. Its fleet includes the world's biggest container ships CSCL Globe and CSCL Pacific Ocean, which have a capacity of 19,100 TEU each. CSCL vessels connect to 180 ports across 60 countries and regions, and sail on 80 international and domestic trade lanes. The company also offers feeder network covering South China, North China, Yangtze River Delta region and South East Asia.

9. Hanjin Shipping Company - 640,348 TEU Hanjin Shipping, South Korea's biggest container carrier service, owns a fleet of 170 containerships and bulk carriers. Its container fleet has a capacity of 640,348 TEU, including 291,370 TEU for the 41 owned container vessels and 348,978 TEU for the 63 chartered-in vessels. The vessels call at more than 90 ports in over 35 countries and have 13 container terminals in major ports. The shipping company, founded in 1977, reported revenues of $9.02bn in 2013 and employs approximately 5,800 people globally.

10. Mitsui O.S.K. Lines- 513,000 TEU Mitsui O.S.K. Lines (MOL), established in 1884 in Tokyo, operates 119 containerships with combined capacity of 513,000 TEU, while the individual capacity of the vessels ranges from 700 TEU to 8,000 TEU. Originally founded as OSK Lines, the company merged with Mitsui Steamship in 1964 to form MOL. It also operates coastal liners, LNG carriers, tankers, cruise ships and ferries, and reported $16.8bn in revenues in 2013.