Ocean Carriers
Ocean Carriers
Inc.
A Case Study
By ab
Introduction
• Ocean Carriers Inc. owned and operated cape-size dry bulk carriers worldwide. • Major Cargo type : Iron ore.
• Vessel sizes : 80000 DWT to 210000
DWT.
• Cape-size carriers travel around Cape
Horn rather than the Panama Canal due to size constraints.
Operations
Maintenance
Maintaining Supplies
And on board Stores
Supply of Lubricants
Cargo
Operations
Repairs
Insurance
Business Model
• Mostly chartered on “time charter ” basis for one, three , or five year periods.
• Occasionally spot charter market was used too. • Charterer paid a daily hire rate for entire duration. • They controlled where the cargo was loaded and unloaded and also determined the cargo.
• OC Inc. supplied a qualified crew along
Brief History
• In 2003, the average daily operating costs amounted to $ 4000.
• This cost increased annually at 1% due to inflation.
• Charterers were not charged for days spent in maintenance and repair but operating cost were still incurred.
Maintenance Work Time
Details
• Initially 8 days a year for repairs and maintenance. • This time increased to 12 days per year for ships operating for more than 5 years.
• For ships operating for more than 10 years the repair and maintenance days increased to 16 day per year.
Operating Policies
• Ocean Carriers didn’t operate ships which were more than 15 years old.
• As per international maritime regulations they underwent special surveys every
5
years for seaworthiness of the carriers.
• As per the norms maintenance costs of ships older than 15 years was too high.
• To avoid these costs they sold the ships in scrap or second hand market before
SWOT Analysis
Strengths
Weaknesses
• New and Larger vessels compared to industry
•
So premium is earned compared to market
•
Too much dependence on basic industries •
Not much product differentiation
Opportunities
Inc.
A Case Study
By ab
Introduction
• Ocean Carriers Inc. owned and operated cape-size dry bulk carriers worldwide. • Major Cargo type : Iron ore.
• Vessel sizes : 80000 DWT to 210000
DWT.
• Cape-size carriers travel around Cape
Horn rather than the Panama Canal due to size constraints.
Operations
Maintenance
Maintaining Supplies
And on board Stores
Supply of Lubricants
Cargo
Operations
Repairs
Insurance
Business Model
• Mostly chartered on “time charter ” basis for one, three , or five year periods.
• Occasionally spot charter market was used too. • Charterer paid a daily hire rate for entire duration. • They controlled where the cargo was loaded and unloaded and also determined the cargo.
• OC Inc. supplied a qualified crew along
Brief History
• In 2003, the average daily operating costs amounted to $ 4000.
• This cost increased annually at 1% due to inflation.
• Charterers were not charged for days spent in maintenance and repair but operating cost were still incurred.
Maintenance Work Time
Details
• Initially 8 days a year for repairs and maintenance. • This time increased to 12 days per year for ships operating for more than 5 years.
• For ships operating for more than 10 years the repair and maintenance days increased to 16 day per year.
Operating Policies
• Ocean Carriers didn’t operate ships which were more than 15 years old.
• As per international maritime regulations they underwent special surveys every
5
years for seaworthiness of the carriers.
• As per the norms maintenance costs of ships older than 15 years was too high.
• To avoid these costs they sold the ships in scrap or second hand market before
SWOT Analysis
Strengths
Weaknesses
• New and Larger vessels compared to industry
•
So premium is earned compared to market
•
Too much dependence on basic industries •
Not much product differentiation
Opportunities