Introduction

1	Introduction	01-25
2	Review of Literature	26-30
3	Company Profiles	31-60
4	Research Methodology	61-70
5	Data Analysis & Interpretation of Data	71-95
6	Summary and Conclusion/ Suggestions	96-105
7	References	106-110
8	Bibliography	111-115

 

 

 

 

1.      INTRODUCTION

Shipping industry  is the industry which is known for the movement of various goods and passengers from one place to another by water. Since many decades, shipping has been the major mode of transporation from one place to another for carrying people. But in recent years, this mode of transportation for moving people has been overtaken by air transport. This has hit the profits of the shipping industry and limited their avenues of work. Even though the shipping industry has been impacted, the movement of cargo, for example, petroleum, coal, food, etc. has added to the growth of the industry and made up for the losses that were borne by the shipping companies due to reduction in the passenger traffic. Globalization and increased trade activities have been of major advantage to the shipping industry. Thus, even though raw materials such as mineral ores, coal, lumber, grain, and other foodstuffs supply a vast volume of cargo, the transportation of manufactured goods has increased rapidly since World War II.

As per The International Chamber of Shipping (ICS), which is the principal international trade association for the shipping industry, representing shipowners and operators in all sectors and trades, 'over 90% of world trade is carried by the international shipping industry.' Thus, without the shipping industry, the import and export of goods, both internationally and nationally, would not be possible.

The global trade is growing and thriving based on globalization and trade agreements. Thus, the shipping industry is benefitting and growing too. This is also resulting into benefits for the consumers who are using these services. As because of economies of scale, shipping companies are able to offer their services to traders at low and decreased freight costs. As per the Drewry Benchmarking Club, 'the contratc rate index has declined 5 percent in the last 12 months to August 2015.' Thus, because of the growing efficiency of shipping as a mode of transport and increased economic liberalisation, the prospects for the shipping industry is further growing.

As per the International Chamber of Shipping (ICS), 'there are around 50,000 merchant ships trading internationally, transporting every kind of cargo. The world fleet is registered in over 150 nations, and manned by over a million seafarers of virtually every nationality.'

History

The history of commercial shipping can be traced back to the Phoenician merchants who operated their own vessels, transporting goods in the Mediterranean. Their shipping and trade practices were followed by the merchants of ancient Greece and Rome. The Venetians, from 1300 to 1500, had a merchant fleet that was very large and served the interests of the merchant traders and the city-state exclusively. From 1600 to 1650, the Dutch sailors were highly active in the shipping world. They operated a globe-circling tramp service for merchants of western Europe.

Advances in the 19th Century

Until the 19th century, ships were not owned by any of the common-carrier companies, which is visible in the modern shipping world. During those days, the ships were either owned by the merchants themselves or by the trading companies.

In the year 1818, the American ship James Monroe, of the Black Ball Line, sailed from New York City for Liverpool, inaugurating a common-carrier line service on a dependable schedule. This resulted into a new way of shipping. The idea of sailing regularly and accepting cargo in less-than-shipload lots was unheard earlier. Thus, this enabled the Black Ball Line to revolutionize shipping.

Two technological developments furthered progress toward present-day shipping practices: the use of steam propulsion and the use of iron in shipbuilding. In 1819 the American sailing ship Savannah crossed the Atlantic under steam propulsion for part of the voyage, pioneering the way for the British ship Sirius, which crossed the Atlantic entirely under steam in 1838. Iron was first used in the sailing vessel Ironsides, which was launched in Liverpool in 1838.

The opening of the Suez Canal in 1869 was of great economic importance to shipping. Coinciding with the perfection of the triple-expansion reciprocating engine, which was both dependable and economical in comparison with the machinery of the pioneer vessels, the completion of the canal made possible rapid service between western Europe and Asia. The first steam-propelled ship designed as an oceangoing tanker was the Glückauf, built in Britain in 1886. It had 3,020 deadweight tons (dwt; the weight of a ship's cargo, stores, fuel, passengers, and crew when the ship is fully loaded) and a speed of 11 knots.

The 20th Century

Among the technological advances at the turn of the century was the development by the British inventor Charles A. Parsons of the compound steam turbine, adapted to maritime use in 1897. In 1903 the Wandal, a steamer on the Volga River, was powered by the first diesel engine used for ship propulsion. The Danish vessel Selandia was commissioned as the first seagoing motor ship in 1912.

After World War I significant progress was made especially in the perfection of the turboelectric drive. During World War II, welding in ship construction supplanted the use of rivets.

The keel of the first nuclear-powered passenger-cargo ship, the Savannah, was laid in Camden, New Jersey, on May 22, 1958, and the ship was launched in 1960. In 1962 it was chartered to a private company, but it did not prove financially successful.

Nature of the Shipping Industry

The shipping industry thrives on the basis of the routes that allow them to move goods and passengers faster and more efficiently. The shipping industry can be classified on the basis of the routes on which a vessel is plying. The various routes are classified as below:

Trade Routes

Most of the world's shipping involves travels between a relatively small number of major ocean routes: the North Atlantic, between Europe and eastern North America; the Mediterranean-Asian route via the Suez Canal; the Panama Canal route connecting Europe and the eastern American coasts with the western American coasts and Asia; the South African route linking Europe and America with Africa; the South American route from Europe and North America to South America; the North Pacific route linking western America with Japan and China; and the South Pacific route from western America to Australia, New Zealand, Indonesia, and southern Asia. The old Cape of Good Hope route pioneered by Vasco da Gama and shortened by the Suez Canal has returned to use for giant oil tankers plying between the Persian Gulf and Europe and America. Many shorter routes, including coastal routes, are heavily traveled.

Coastwise Shipping

Usually, coastwise shipping means conducting shipping activities within 32 km (within 20 miles) of the shoreline. But in reality, these ship lanes often cross beyond the mentioned distance. In the U.S., coastal shipping is carried out along the Pacific, Atlantic, and Gulf coasts. There are various restrictions when it comes to coastal shipping. One of these restrictions is known as cabotage. Under these restrictions, the U.S. and several other nations permit vessels to engage in coastal trade only of they are registered under the national flag.

Several of the small European countries do not follow the cabotage restrictions. Thus, due to this, in these regions, several short international voyages are common. A special feature of coastal shipping in the U.S. is the trade between the Pacific coast and the Atlantic and Gulf coasts. Vessels engaged in this trade traverse the open sea and utilize the Panama Canal. This route though is still covered by cabotage laws. To conduct these coastal and short-distance shipping activities, special-purpose ships are often employed, which includes car ferries and train ferries.

Inland Waterways

Inland waterways means shipping activities that are carried on in the rivers, canals, and lakes. The shipping activites that are carried out in the inland waterways forms to be a major part of the world's shipping industry. The ships that usually ply in the inland waterways are smaller, lighter vessels. At times though, big ocean going ships also navigate through the inland waterways. For example, the St. Lawrence Seaway route to the Great Lakes of North America. The various shipping operations such as containerization, lighter-aboard-ship, and barge-aboard-ship have facilitated the shipping of cargoes between oceangoing vessels and those of the inland waterways.

VARIOUS CATEGORIES OF THE SHIPPING INDUSTRY

The shipping industry is a very competitve industry that is mainly driven by private shipping companies. Being a service providing industry, the competitors get into cut throat competitve practices to sustain or achieve a competitve position. The shipping industry conducts several activites and provides several services, which can be divided into various categories, namely, liner service, tramp shipping, industrial service, and tanker operation, all of which operate on certain well-established routes.

Liner Service

Liner service consists of regularly scheduled shipping operations on fixed routes. Cargoes are accepted under a bill-of-lading contract issued by the ship operator to the shipper.

Competition in liner service is regulated generally by agreements, known as conferences, among the shipowners. These conferences stabilize conditions of competition and set passenger fares or freight rates for all members of the conferences. In the U.S., steamship conferences are supervised by the Federal Maritime Commission in accordance with the Shipping Act of 1916. Rate changes, modifications of agreements, and other joint activities must be approved by the commission before they are effective. Measures designed to eliminate or prevent competition are prohibited by law.

Tramp Shipping

Tramps, known also as general-service ships, maintain neither regular routes nor regular service. Usually tramps carry shipload lots of the same commodity for a single shipper. Such cargoes generally consist of bulk raw or low-value material, such as grain, ore, or coal, for which inexpensive transportation is required. About 30 percent of U.S. foreign commerce is carried in tramps.

Tramps are classified on the basis of employment rather than of ship design. The typical tramp operates under a charter party, that is, a contract for the use of the vessel.

The center of the chartering business is the Baltic Exchange in London, where brokers representing shippers meet with shipowners or their representatives to arrange the agreements. Freight rates fluctuate according to supply and demand: When cargoes are fewer than ships, rates are low. Charter rates are also affected by various other circumstances, such as crop failures and political crises.

Charter parties are of three kinds, namely, the voyage charter, the time charter, and the bareboat charter.

The voyage charter, the most common of the three, provides transport for a single voyage, and designated cargo between two ports in consideration of an agreed fee. The charterer provides all loading and discharging berths and port agents to handle the ship, and the shipowner is responsible for providing the crew, operating the ship, and assuming all costs in connection with the voyage, unless an agreement is made to the contrary.

The time charter provides for lease of the ship and crew for an agreed period of time. The time charter does not specify the cargo to be carried but places the ship at the disposal of the charterer, who must assume the cost of fuel and port fees.

The bareboat charter provides for the lease of the ship to a charterer who has the operating organization for complete management of the ship. The bareboat charter transfers the ship, in all but legal title, to the charterer, who provides the crew and becomes responsible for all aspects of its operation.

The leading tramp-owning and tramp-operating nations of the world are Norway, Britain, the Netherlands, and Greece. The carrying capacity of a typical, modern, well-designed tramp ship is about 12,000 dwt, and its speed is about 15 knots. The recent trend is toward tramps of 30,000 dwt, without much increase in speed.

Industrial Carriers

Industrial carriers are vessels operated by large corporations to provide transportation essential to the processes of manufacture and distribution. These vessels are run to ports and on schedules determined by the specific needs of the owners. The ships may belong to the corporations or may be chartered. For example, the Bethlehem Steel Corp. maintains a fleet of Great Lakes ore carriers, a number of specialized ships that haul ore from South America to Baltimore, Maryland, and a fleet of dry-cargo ships that transports steel products from Baltimore to the Pacific coast. Many oil companies maintain large fleets of deep-sea tankers, towboats, and river barges to carry petroleum to and from refineries. The ships often operate under contracts of affreightment.

Tanker Operation

All the tanker operations that are carried worldwide are being conducted by private or contract carriers. In the 1970s some 34 percent of the world tanker fleet, which aggregates about 200 million dwt, was owned by oil companies. Rest of the tonnage that was available for providing services was owned by independent ship owners. These ship owners chartered their vessels to the oil companies. The tanker operations businesses use large vessels called supertankers. The capacity of these supertankers exceeds 100,000 dwt. The main service that these supertankers provide is that of transportation of crude petroleum from the oil fields to the refineries. After this is refined, products such as gasoline, kerosene, and lubricating oils, are distributed by smaller tankers. These tankers are usually less than 30,000 dwt, and by barges.

Vessel Types

There are different types of merchant ships. These ships can be classified into various categories. They can be classified as container ships, bulk carriers, tankers, ferries and cruise ships, and specialist ships. When the passenger shipping industry was in its boom, some of the largest and the most glamorous ships were built and travelled the North Atlantic. In the mid-19th century, these ships sailed regular schedules between the Americas and Europe. Some of the major ships such as the Mauretania, the Queen Mary, the Queen Elizabeth, the United States, and the France gradually reduced the time for the North Atlantic crossing to less than four days. These were very large and gigantic vessels that varied in size from about 45,000 to 75,000 metric tons and up to 300 m (1,000 ft) in length. These ships were gigantic and very large as per the standards of the first half of the 20th century. In modern times though, the paseenger ships are mainly only restricted to the cruise trade.

The international shipping industry consists of different types of ship in the world merchant fleet which can be classified as follows:

·         Container ships

The late 1950s saw the advent of container ships. These ships are known to have introduced technological change in cargo handling. These vessels are the pioneers which linked the trucking industry to deep-Sea shipping. The container ships are large water vessels that carry large truck bodies and can discharge and load in one day. In the past, ships took atleast ten days for the same. One of the first developments in the business of container ships happened in 1956, when Sea-Land Service commenced operations between New York City and Houston, Texas. There are also different types of container ships such as barge-aboard, or lighter-aboard ships. These ships are also known as seabees (sea barges) or LASH (lighter-aboard ships). These ships were introduced from an evolutionary development of the container ship. These container ships are larger and massive which have a capacity to carry 38 barges, or up to 1,600 containers, or a combination of containers and barges. Their design enables them to deliver cargo to developed or undeveloped ports, without the need for berthing.

·         Bulk carriers

The bulk carriers are large ships and also called as the work horses of the fleet. The bulk carriers are known to transport large quantities of various raw materials such as iron ore and coal. These vessels have hatches raised above deck level. These hatches cover the large cargo holds. Thus, these are the identifiable indicators of a bulk carrier. Bulk carriers also carry packaged goods, unitized cargo (cargo in which a number of items are consolidated into one large shipping unit for easier handling), and limited amounts of grain, ore, and liquids such as latex and edible oils. Bulk carriers usually also have space for a few passengers. They are accepted on some cargo liners. There are also some specialized ships which are designed and built to carry certain types of cargo such as, automobiles or grain.

·         Tankers

The tankers are vessels that primarily transport crude oil, chemicals and petroleum products. Tankers appear very similar to bulk carriers. But they differentiate as the deck is flush and covered by oil pipelines and vents. These are vessels that are designed specifically to carry liquid cargoes, usually petroleum. These are very large vessels that can transport tons of petroleum or crude oil. Despite their great size, the construction of tankers is simple, as is, for the most part, their operation. But these vessels are known for causing a lot of environmental damages. The damages are caused due to oil spills, resulting from collision, storm damage, or leakage from other causes. There are also specialized tankers that specifically transport liquefied natural gas (LNG), liquid chemicals, wine, molasses, and refrigerated products.

·         Ferries and Cruise ships

Ferries are ships that are utilized for conducting short trips. They usually include a mix of passengers, cars and commercial vehicles. Usually, all the ferries are Ro-Ro (roll on - roll off) ferries. Ro-Ro (roll on - roll off) is ships where vehicles can drive straight on and off. Thus, this helps the ships to be much more accessible and also speedy mode of transportation.

A cruise ship is a passenger ships that provides luxurious and pleasure voyages to its clientele. These voyages are meant to provide a pleasing experience to its passengers. The cruise ships are known to be state-of-the-art vessels. Passengers board these ships to experience the same. The prime purpose of the cruise ships is not to transport passengers from one place to another, as most of the times the place of origination and destination are usually same. These ships usually have a predefined route and are mainly used only for tourism activities. The cruise ships also conduct "cruises to nowhere" or "nowhere voyages" where the ship makes 2–3 night round trips without any ports of call. They can easily be termed as also a new generation of large and luxurious 'floating hotels'.

·         Specialist ships

Specialist ships are ships that have been built for very specialized purposed. They can be made to serve very specific purposed. They of them can be categorized as anchor handling and supply vessels for the offshore oil industry, luxury yachts, salvage tugs, ice breakers and research vessels.

Treaties and Conventions

Many treaties and conventions have been adopted over the years with the objective of increasing the safety of life at sea. One of the most important agreements provided for the establishment of the International Iceberg Patrol in 1913, after the Titanic disaster. Under the International Load-Line Convention of 1930, ship loading was regulated on the basis of size, cargo, and route of the vessel. The International Convention for the Safety of Life at Sea, which governs ship construction, was ratified by most maritime nations in 1936, and updated in 1948, and again in 1960 and 1974.