Maritime Economy
Since the latter half of 2007 the world economy has been in a severe downward spiral as a result of the reckless lending practices of the world banks, the implications of which have trickled down into the industrialized economy over the last two years. This assignment aims to analyze the global seaborne trade industry with a focus on the dry bulk sub-sector and its major commodities by assessing the effect on factors that are influencing the demand and supply of dry bulk vessels and the future growth of the dry bulk market, examining the behaviour of freight rates, as well as evaluating the profitability of the dry bulk industry as well as its future survival prospects in respect to overall impact of the recession on this major sub-sector the global shipping industry. Sea transport involves delivering items from one harbour to another. If the demand for a certain item in one country increases, the demand for the transport of that item to that country will increase. This is how the demand for sea transport capacity arises.
The demand for goods by one country and the supply of that good by another country falls under the description of world trade. As the world trade increases, so does the demand for sea transport. "The engine that drives world trade is the economic growth performance of trading nations."(Jones, 1987: 20). Bulk cargo comprising 30% of world sea trade plays a major role in this demand level and relies heavily on the sea industry to deliver goods from one destination to another. Thus the demand for sea transport is a derived demand, derived from the demand for the goods being transported." (Jones, 2010). The need arises for sea transport when one country has a shortage of something, such as iron-ore, grain or coal, and another country has a surplus. These three types of commodities make up the dry-bulk industry.
As such, when analysing the demand level of sea transport, we realize the overall level of demand for sea transport activity has
The demand for goods by one country and the supply of that good by another country falls under the description of world trade. As the world trade increases, so does the demand for sea transport. "The engine that drives world trade is the economic growth performance of trading nations."(Jones, 1987: 20). Bulk cargo comprising 30% of world sea trade plays a major role in this demand level and relies heavily on the sea industry to deliver goods from one destination to another. Thus the demand for sea transport is a derived demand, derived from the demand for the goods being transported." (Jones, 2010). The need arises for sea transport when one country has a shortage of something, such as iron-ore, grain or coal, and another country has a surplus. These three types of commodities make up the dry-bulk industry.
As such, when analysing the demand level of sea transport, we realize the overall level of demand for sea transport activity has
Bibliography: advisoranalyst.com/glablog/tag/crude-oil-prices/ Hansen k, 2008, The Driving force in Shipping Growth, 2008, pg5 Stopford, 2008, “is there life after the boom?” The Economist, 2008, “Slowdown turning the tide of shipping industry profits” http://www.startribune.com/business/16487201.html?page=1&c=y Jones, 1987, The international shipping industry and South Africa’s seaborne trade, Pg20, CSIR, Pretoria. T Jones, 2010, Study notes, Maritime Economics, University of Kwa-Zulu Natal, Westville Campus, Durban www.brs-paris.com/index.php?page=drybulk