CARIBBEAN MARITIME UNIVERSITY ACADEMIC VICERRECTORY THE HIGHEST STUDIES SCHOOL OF THE MERCHANT MARINE MARINE TRANSPORT MASTER MARINERS & CHIEF ENGINEERS THE FOUR SHIPPING MARKET OFFICERS: ACOSTA JEAN BASTIDAS ALBERTO FONSECA IVAN HERNANDEZ FRANCISCO MEDINA JORGE CARACAS, NOVEMBER 12TH 2014 Group # 7

The New Building Market Different motives Certain size & Propous Obtain ships good quality Project in build differents types of vessel Broker handle new building Expert Resources State of the Market Suitable Yards Specification & Terms After Negotiation completed = Letter of intent Contruction contract Leading to Design changes & disputes between Buyers & builder Contract ensure that each dispute be dealt fair -& orderly Second Hand Prices, Determined by supply and demand On the demand side Key Factors are freight rates Financial liquidity of buyers Availability of credit Production Cost

The Freight Market The freigh market Time charter Freight Market reporting Bareboat Charter Charter Party Voyage Charter Contract of affreigtment Ship fixed for a specific time Rates at which charters are fixed Onces deal is fixed, a CP sets terms of business Manages the vessel and pays operating & Voyage cost Ships fixed for a specific voyage & cargo Carries a series of cargo parcels for a fix price per ton Freight Rates statics World scale index The most complet of freight rates Statistic showing trends in freight rates Arranging employment for a ship The ship is said to be fixed

High Level Market Where there are many vessels. When there are many cargoes. HLMC (High Level Market Condition) There are two diferent modes:

In this condition appear the development of liner Markets through many Liner shipping Companies leaded by International Conferences which means excellent freight’s Levels or INELASTIC Freights, owing to the excellent Market Condition for that specific moment. The graffic show the leading ships operator’s bellow to containers vessel.

Organization for Economic Co-operation and Development The current levels have brought liner companies back into the black figures on the Far East to Europe trades, as they continue to extensively apply slow steaming to combat the ever-increasing bunker fuel prices that constantly cut into owner’s profit margins. World trade will probably expand by 7 percent this year, compared with more than 11 percent in 2010 and the average 5.7 percent rate during the last three decades, according to IMF and OECD data.

FFAs DEFINITION A forward freight agreement (FFA) is a financial forward contract that allows ship owners, charterers and speculators to hedge against the volatility of freight rates. It gives the contract owner the right to buy and sell the price of freight for future dates. FFAs are built on an index composed of a shipping route for tanker or a basket of routes for dry bulk, contracts are traded ‘over the counter’ on a principal- to-principal basis and can be cleared through a clearing house.

FFAs DEFINITION Forward Freight Agreements (FFAs) are primarily transacted on a cleared basis and will normally be based on the terms and conditions of the FFABA standard contracts as adapted by the various clearing houses. The main terms of an agreement cover: (a) The agreed route. (b) The day, month and year of settlement. (c) Contract size. (d) The contract rate at which differences will be settled. Commissions are agreed between principal and broker. The broker, acting as intermediary only, is not responsible for the performance of the contract. Cleared contracts Cleared contracts are margined on a daily basis through the designated clearinghouses and margins are based on a close-of-play forward assessment published by the Baltic Exchange. At the end of each day, traders pay or receive the difference between the price of the paper contract and the market index

LLMC / ON VESSELS LLMC (Low Level Market Condition) There ara two diferents modes: When there are many cargoes and few vessels Where there are many vessels and few cargoes.

LAY-UP CONDITION (Vessel Anchored) Ship owners would not support their DRC SCRAP MARKET CALCULATION OF DAILY RUNNING COST ( DRC) *NEGATIVE or ENOUGH* The estimation of DRC FIX COST= ????? + CAPITAL COST IIN US $= ????? DAILY RUNNING COST ( DRC)= ????? USD

THE SALE & PURCHASE MARKET INTERNATIONAL SHIPPING MARKET SALE & PURCHASE TEAM PURCHASE BROKERS CONSULTANTS THE NEWBUILDING MARKET SHIPS BROKERS MONETARY DEMAND MAYOR LEADING SHIPPING BANKS SHIP OWNERS CHARTERERS THE FREIGHT MARKET BUSSINES

SCRAPP MARKET The segment seems to be ahead of demand for the foreseeable future. The logical consequence will be to see vessels operated at low speeds and low utilization rates or even laid-up. Whether Liners will be able to enforce market discipline, supporting box rates at healthy levels, remains an open question But it seems inevitable that tonnage providers (i.e. charter rates) will continue to have tough years ahead. Obvious scrapping candidates are few, as the Post-Panamax fleet is young

And more is yet to come, or which more than half is scheduled to be delivered in Post-Panamax vessels younger than ten years old have to become scrapping candidates if the capacity of the current Post-Panamax order book is to be counterbalanced by scrapping Temporary lay-ups of idling vessels may become an issue again this year or next. A new contracting boom, for whatever reason eco-design, marginal cost per teu or market share could potentially delay the recovery in the container industry beyond reason.

Most ships are removed from the fleet through a process known as scrapping. Scrapping is rare for ships under 18 years old and for those over 40 years in age, ship- owners and buyers negotiate scrap prices based on factors such as the ship's empty weight (called light ton displacement or LTD) and prices in the scrap metal market. Scrapping rates are volatile, the price per light ton displacement has swung from a high of $650 per LTD in mid-2008 to $200 per LTD in early 2009, before building to $400 per LTD in March As of 2009, over 96% of the world's scrapping activity takes place in China, India, Bangladesh, and Pakistan.