COMMERCIAL ASPECTS OF LARGE SHIP INVESTMENT

Ship investment can be readily separated into two broad areas: firstly, the construction of new tonnage and the purchase of second-hand tonnage and secondly, the chartering-in of either a new vessel or one that is already trading. With the exception of short-term chartering-in, the latter method of investment is usually an alternative means of financing investment and depending on the type of chartering-in adopted, can be a means of an owner limiting the degree of his financial and/or cost exposure. The growth in ship size over the last ten years, in both tanker and dry bulk-cargo vessels, leading to the present-day predominance of the large vessel is reviewed. The increase in shipbuilding prices and the escalation of ship operating costs over the same period are considered. The relationship between the various cost components of ship operating are compared, illustrating the extent to which the cost per deadweight ton favors the large ship. A review of the freight markets over a time-span at this juncture enables a relationship to be drawn between the capital investment involved in large ship investment and the benefits that can be derived by the shipowner, with varying degress of risk depending on the commercial factors that he takes into account. The gross fluctuations of the freight market over the last ten years have encouraged the shipowner, progressively, to greater degress of speculation and, with the increased cost of ships and of operating them, we may now be reaching a stage whereby the whole of the shipping community must see a period of freight rate stabilisation. Order from: BSRA as No. 46,739.

• Supplemental Notes:
  • Symposium on the Operation of Large Ships, also held by the Nautical Institute in association with the Institute of Marine Engineers, London, March 10-12, 1976.
• Corporate Authors:

  Royal Institution of Naval Architects, England

  10 Upper Belgrave Street
  London SW1X 8BQ,   England 
• Authors:
  • Carter, S M
• Publication Date: 1976

Media Info

• Features: References;
• Pagination: 6 p.

Subject/Index Terms

• TRT Terms: Capital investments; Chartering; Costs; Finance; Freight traffic; Investments; Markets; Operating costs; Risk assessment; Shipbuilding
• Uncontrolled Terms: Financial management; Investment risk
• Old TRIS Terms: Freight markets
• Subject Areas: Administration and Management; Finance; Freight Transportation; Marine Transportation; Safety and Human Factors;

Filing Info

• Accession Number: 00170757
• Record Type: Publication
• Source Agency: British Ship Research Association
• Report/Paper Numbers: Paper No. 1 Proceeding
• Files: TRIS
• Created Date: Mar 14 1978 12:00AM