Free Custom «Trade in the International Arena» Essay Paper

Ocean shipping represents one of the major transportation modes when it comes to trade in the international arena, and it is responsible for about 6 billion tons of product shipped annually. The process of shipping requires a lot of capital investment and review of the daily income and the operating costs often run in thousands of dollars for small vessels. The proper planning for a shipping company with multiple assets is crucial for survival in the competitive market. Shipping companies that operate in the tramp market usually have a set of mandatory contract cargoes that they are committed to carry.

The mandatory contract cargoes originate from the long-term contracts from the cargo owners to the shipping company. The former are also called shippers. Each of the cargoes consists of a given quantity to be shipped between ports. Ship’s routing and scheduling deal with selecting spot cargoes, which incorporates such necessary procedures as servicing, assigning cargoes to the appropriate ships in the fleet as well as designing the optimal ship routes and their schedules (Bertazzi et al. 2009). At times, this may be rather challenging, since these tasks should be done simultaneously.

 

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The planners in the shipping companies solve the ship routing and scheduling problems on a daily basis. When talking of ship routing and scheduling the plans follow a rolling horizontal formula. Here, plans can be updated depending on the influx of new information on cargoes and ship delays. Thus, the program’s objective is to anticipate the upcoming requirements made during the shipping process, so as not to be caught off guard and cost the company millions in transport and damages. All companies have the objective of profit, especially those in the business of essentials.

At present, the shipping industry is quite competitive and very complex. The reason being, about 99 percent of the world’s trade in volume terms is conveyed by sea. Additionally, one should understand most of the elements in the conduct mechanism of the maritime industry, which is paramount. As much as technology trends would make some think of shipping as archaic, seaborne trade has increased exponentially by 450 percent (Branch, 2007). The change has been rapid, influenced by a variety of factors. At the present, humanity lives in a global environment, where shipping and trade are linked in an extricable bond.

The shipper happens to be the driver of this industry and the response is to focus continuously on the ship productivity with a strong interface lock on the other industries transportation modes. These include; waterways, inland as well as by air. That means it is a high profile business with high levels of technology linked to the management operations. Additionally, it seems that the Asian block has taken control of the trade growth, which follows the ownership of the world tonnage. In fact, they are presently one of the significant players in maritime transport.

One of their main strengths comes from the bulk of their work force. Half of the world’s crew and two thirds of the global port operators belong to the Asian block. They also account for almost all of the demolitions and recycling. Recently, there was a report published stating that twenty-eight of the world’s 50 largest liner corporations have their headquarters in Asia (Branch, 2007). That is more than half, and implies that they have major stock control. They have taken complete advantage of the related sectors of industry as 70 percent of the top twenty container seaports are based in the Asian region.