Ocean Freight Analysis

The Indian Ocean Trade included overland and sea trade routes that extended from China to the Swahili Coast to the Middle East. It provided easy access to cheaper and more frequent trade during the monsoon seasons because sailors could depend on the predictable monsoon winds. Cultural diffusion occurred through peaceful trade that was dominated by merchants. Technology, ideas, religion, and products also spread throughout the trade routes. The Indian Ocean Trade was the first time that goods were being traded in mass market.

One of the most significant reasons why the trade route through the Indian Ocean had the most positive impact around the world is because it allowed merchants to

Of the three forms of transportation, rail has the highest fixed costs, motor carriers the greatest variable costs, and air transport, the greatest variable costs of service and logistics optimization. Starting with rail, the cost structure has the highest fixed cost components, driven by infrastructure and terminal costs. Rail is therefore the most difficult to negotiate a lower transportation cost for, as the fixed costs form an inflexible pricing structure for retail service providers. The quality of rail service varies significantly across nations and regions as well, leading to greater variability in costs when a shipment moves across national and regional boundaries. Given the highly fixed cost structure of rail systems, there is significant room for improvement from an efficiency standpoint. The use of containerization is continually adding to greater efficiencies to this mode of transport (Jennings, Holcomb, 1996).

2. Suppose a customer buys an iPhone from Apple for $500 on January 1, 2010. The cost of the iPhone to Apple is $350. Assume that the customer is entitled to upgrades over the next two years. Use the following financial statement effects template (FSET) to illustrate the financial statement impacts for Apple of the customer's iPhone purchase on the date of the initial purchase and at the end of each of the two years following the initial purchase under generally accepted accounting principles (GAAP).

Based off a financial analysis using the data Ocean Carriers has provided, the final recommendation is that Ocean Carriers should build a new ship out of its Hong Kong base where the tax rate is 0% and scrap the ship when it is 25 years old. Following this recommendation would be the only scenario where Ocean Carriers sees a positive net present value

Solely taking a look at the graph, to accommodate future demand for growth I would recommend ocean transportation to move our products from the new facility in China. As we expect demand to grow by 10 percent annually over the next five years, it will be most beneficial to utilize ocean transportation as projected total costs for air becomes higher than ocean above the trade off point of 1,904,761.9 POUNDS. For example, total projected costs were calculated to be at $587,156 for air versus $630,080 for ocean at the end of 5 years. Extrapolate the graph even further into the future, with the expectation of even more growth,

If the company is incorporated in the U.S., the NPV will be $-7,836,500.07(US25) after 25 years and will be $-6,395,945.22(US30) after 30 years. Therefore, the U.S. company should not purchase the vessel. If the company is established in Hong Kong, the NPV will be $1,522,472.92(25HK) after 25 years and will be $3,402,293.81(30HK) after 30 years. Therefore the 30 years should be the optimal number of years to operate the carrier before scrapping it after 30 years. In this situation, if the 15-year-selling policy is changed, the company should buy the carrier. For years 26-30, we assume that average daily charter rate is increased by $200 per year. The expected daily hire rate is calculated by multiplying Avg. Daily Charter Rate by adjustment factor for hire rate of 65%.

The economic climate has a strong impact on the cruise line industry. However, the cruise line industry is growing and more people are traveling today then ever before. As welfare of people has considerably grown despite all possible crises in world economy, anyhow many economic factors are influence to cruise line industry, such as clientele's economic positions, growth in markets, currencies rates when working international and inflation plays a role. Operators of a cruise will be affected under management and operational levels. If fuel price begins to increase, then it will influence operational costs of the company. If interest rates increase then, then it will influence the income of the company. Economic factor plays a major role for the company to be afloat of cruise industry.

4) Should Ms Linn purchase the $39M capsize? Make 2 different assumptions. First, assume that Ocean Carriers is a US firm subject to 35% taxation. Second, assume that Ocean Carriers is located in Hong Kong, where owners of Hong Kong ships are not required to pay any tax on profits made overseas and are also exempted from paying any tax on profit made on cargo uplifted from Hong Kong. (75 points)

We expect the daily hire rates to increase from 2001 to 2002, but then to decrease overall in the long term based on the assessment of the consulting firm. The consulting firm based their forecast on higher demand in iron ore shipments. They claim demand in iron ore shipments has historically shown a strong correlation with charter rates, and we believe this makes sense. Vessel size, distance of route, and demand for ore/coal are drivers of daily rates.

According to the NPV rule, Linn should not take up the project, because the NPV of the project is negative for both these two scenarios.

Sturdy, convenient to transport and relatively cheap – these are some of the factors that have made the conversion of shipping containers into modern living and working spaces an ever growing trend in some other countries. However, little is only known about this innovation in Cebu. The proponents of this research study the supply and demand of these shipping containers. As end users create demand for the containers from the contractors as a finished infrastructures, these contractors are also creating a demand of raw shipping containers from the shipping companies. And yet there are more of these containers than what the people demanded, making a huge gap between the abundant supply of shipping container and the demand for them. The researchers

There was a huge amount of works on the collaboration between trade and transport costs. Improvements from the trade should be balanced the related transaction costs, in the method of direct expenses for the transportation service, because of the value associated with the quick option for transporting goods. Another important locational conclusion influences, mainly for export-oriented businesses, is closeness to airports with the wide transport.

Today, container ships are used as major transport method between countries, and most of products, which are called dry cargo such as daily products, processed food, timbers and metals, are transported by container ship.

Air freight market is not stable and might be weak because of uncertain international trade increase (Barnard,2015). There was fluctuation in air cargo demand over the last 10 years from 2006 to 2016 which indicates that cargo demand could be changed by some external and internal influences. Some figures were released about worldwide air freight market and presented that air cargo capacity increased 2.2%, comparing to 2014. While this was the 5% growth calculated by The International Air Transport Association (IATA), the growth of cargo volumes in 2015 was much slower than 2014(Barnard, 2015). However, some experts pointed out that global air freight market get a positive growth from 2011, and it is enjoying a relatively steady growth, due to the enhanced trade and economic recovery after the global financial crisis of 2008(Huang,2016). Because of sluggish world trade growth, air cargo suppliers face a lot of challenges including alternative transportation, perspective uncertainty and unexpected policy and here are some potential solutions: improving customers service, efficiency, security and reducing negative environmental impacts.