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ECONOMICS OF SHIP DESIGN &MARINE TRANSPORTATION

ECOLE CENTRALE DE NANTES, NANTES, FRANCEMAY-JUNE 2012

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KHO SHAHRIAR IQBALEX-PROFESSOR

DEPARTMENT OF NAVAL ARCHITECTURE AND MARINE ENGINEERINGBANGLADESH UNIVERSITY OF ENGINEERING AND TECHNOLOGY

DHAKA, BANGLADESH

B. Sc. in Naval Architecture and Marine Engineering

M. Sc. in Naval Architecture and Marine EngineeringBangladesh University of Engineering and Technology

Diplome Etude Complimantaire de 2em Cycle in Naval Architecture and Transport System Analysis

University of Liege, Belgium

Ph. D. in Naval Architecture and Ocean EngineeringOsaka University, Japan

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Lecture Contents

Shippings economic environment The demand for marine transportation The supply of marine transport The freight market Operating economics

Engineering economy calculations The basic interest relationship

Economic criteria Practical cash flow Some economic complexities A complex cash flow example

Application Application to ship design The general approach Comparison of alternative ship design The optimal ship The wider scene

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Why Economics of Ship Design/Marine

Transportation?

to show how the economics and ship designrelated

to help the practicing designer who needssufficient information to evaluate the technicaland economic performance of alternative designsof ships and their equipments

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Economics for Ships

In the last few decades rigorous economicevaluations have been seriously applied to ships,mostly because, The scope for making wrong decisions in the ship design has

increased with expansion in ship sizes and types T e main criteria must e o economic nature, giving u weig t

to technical factors in its calculation, complying with all requiredsocial, safety and environmental regulations. The optimal designis that which is most profitable.

There has been increasing complexity in the financial conditionssurrounding ship procurement. Cheap loans, accelerateddepreciation, subsidies and tax relief add greatly to thedifficulties of estimating ship profitability .

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Shippings Economic Environment

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Man has used boats and ships for commerce and trade forcenturies. Transporting passengers and high value cargoes drewthe accent in the 19 th century, as it happened to the present dayairlines.

Industrial revolution increased the demand for raw materials

The Demand for Marine Transport

(Past)

especially for textile industry. New demand for cargoes like bunker coal, iron ore, grains etc.

evolved

Telegraph networks created further hikes of transport demand

Application of steam to ship propulsion enabled reliableshipping initially in short-distance trades. Steam propulsion andiron shipbuilding proved an unbeatable combination in worldtrade

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The present demand for marine transportmassively increased for raw materials andmanufactured goods

Freight rather than passengers, dominate the

The Demand for Marine Transport

(Present)

-are carried by sea than road, rail, and airaltogether

Oil and container are now become moreimportant than other cargoes

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Demand for Transport

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Quarterly GDP Growth %

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Growth of World Trade

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World Seaborne Trade

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World Seaborne CargoOver the last four decades total seaborne trade estimates have quadrupled,from just over 8 thousand billion tonne-miles in 1968 to over 32 thousand billiontonne-miles in 2008.

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World total Dry Bulk Trade Forecast

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World Total Liquid Bulk Trade Forecast

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The Supply of Marine Transport

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World Fleet by Category

Numbers of ships, by sector.General Cargo Ships =16,224Bulk Carriers = 8,687Container ships = 4,831Tankers = 13,175

Passenger ships = 6,597

A = , as o cto er

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New Ship Ordering

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World Fleet, Number by Country/Region

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World Fleet, DWT

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World Fleet, DWT by Country/Region

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World Fleet, GT

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World Fleet, GT by Country/Region

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Number of Ships, Service Fleet

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Service Fleet by Country

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Ferry and Passenger Cruise Fleet

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Dry Bulk Rates, US$/ton

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Container Freight Rates

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Container Ship, Charter Rates

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Worldscale for Tanker

Worldscale is a unified system of establishing payment of freight rate for a given oil tankerscargo. Worldscale was established in November 1952 by London Tanker Brokers Panel on

the request of British Petroleum and Shell as an average total cost of shipping oil from oneport to another by ship. A large table was created.

Charter rates are typically quoted in an designated index. These rates published almost annually,list the cost per tonne of oil to carry between designated ports in a 19,500 dwt tanker at 14 knotspeed. The base rate is designated as worldscale100. A larger tanker can carry crude morecheaply than a smaller one, so the rate will be some percentage of the base rate. For example,Wroldscale50 indicates that the freight rate per barrel of oil will be 50% of the published

Worldscale between the designated ports.

Route WorldSacle

Dirty Tanker

Arabian Gulf to West 105

Arabian Gulf to East 140.5

Mediterranean to US Atlantic Coast 193.5

Clean Tanker

Mediterranean to NW Europe 271.5

Mediterranean to US Atlantic Coast 261.5

A list of average rates are shown in the table that attained in 2003 (% of W100)

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Comparative Fuel Consumption

Source: NTM (Swedish Network for Transport and the Environment)

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Exhaust Gas Emission by Transports

Source: NTM (Swedish Network for Transport and the Environment)

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