...Economy Shipping Economy Shipping Company (Abridged) Question 1. What are the relevant cash flows under each of the two alternatives? And in what years do they occur? Alternative 1: Rehabilitation of the Conway We decided to divide this alternative in two parts. Part A is Rehabilitation without parts and Part B is Rehabilitation with parts. Facts/Assumptions • Conway’s additional useful life of 20 years. • Book value of Conway: $39,500 • Market value of Conway: $25,000. This is the Opportunity Cost of not selling the Conway at year 0. • Rehabilitation costs: $115,000. If spare parts are used, rehabilitation costs would be $71,500. • Book value of spare parts if used on the Conway: $43,500. • Market value of spare parts: $30,000. This is the Opportunity Cost of not selling the spare parts at year 0. • Annual operating costs of Conway: $203,150 • No dismantling and scrapping costs at the end of useful life (This will be covered by the value of the scrap and used parts). • Return of 10% after taxes. • Tax rate: 48% • Book cost of Conway, including rehabilitation costs, would be depreciated over a 20-year period. • Depreciation according to the straight line method = (Cost - Residual value) / Useful life. For the rehabilitation alternative, residual value is zero at the end of year 20. • ATCF(After-tax cash flow) will be calculated using the formula = Operating Costs after taxes plus Tax shields from depreciation...
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...Economía Shipping Company (abreviado) En la primavera de 1950, el controlador de Economía Shipping Company, ubicada cerca de Pittsburgh, estaba preparando un informe para el comité ejecutivo con respecto a la viabilidad de la reparación de una de las de empresa barcas de vapor o de reemplazar el barco de vapor con un nuevo barco con motor diesel. El envío de la economía de la empresa se dedica principalmente en el transporte de carbón desde el minas cercanas a las fábricas de acero, servicios públicos y otras industrias en el área de Pittsburgh. La de la compañía de varios barcos de vapor también en ocasiones llevan cargas a lugares tan lejanos como Nueva Orleans. Todos los barcos de propiedad de Economía eran generador de vapor. Todos eran por lo menos 10 años de edad, y la mayoría tenían entre 15 y 30 años de edad. El barco de vapor el controlador estaba preocupado sobre el Conway, tenía 23 años y requiere rehabilitación inmediata o sustitución. Se estima que el Conway tenía una vida útil de otros 20 años, siempre que se hagan las reparaciones y el mantenimiento adecuados. El valor en libros de el Conway fue 39.500 dólares, pero el controlador cree que si la compañía vendió el barco en 1950, traería sólo alrededor de $ 25.000. Se estima que los costos de rehabilitación inmediatas para el Conway a ser $ 115.000. El controlador calcula que estos gastos generales de rehabilitación se extenderían la vida útil de la Conway durante unos 20 años. Nuevas piezas de repuesto...
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...La Corporación American Motors es una empresa dedicada a la fabricación automotriz, producía vehículos de pasajeros, vehículos recreacionales y de servicio. En 1973 habia acumulado más de $100 millones de efectivos excedentes producto de tres años de excelente productividad. AMC era pequeño en comparación a GM, Ford y Chrysler. La industria automotriz estaba sujeta a fluctuaciones constantes en las ventas. Los gustos de los consumidores cambiaban rápida y radicalmente, y la adquisición de un automóvil representaba un gasto mayor para la mayoría de los compradores. La volatilidad de los gustos del consumidor, junto con el largo periodo de tiempo que toma realizar el diseño, el pesado equipamiento y los gastos en desarrollo, dan como resultados riesgos substanciales para los fabricantes automotrices. La competencia en la industria era bastante amplia e cuanto al diseño del producto, precio, promoción y la rigurosa distribución. Las ventas eran hechas sobre la base del efectivo, siendo el comerciante quien debía buscar el financiamiento en bancos o compañías financieras propiedad del fabricante. Dentro de la industria AMC parecía débil e inestable, pero esto disminuyó con el boom de los autos pequeños. AMC se dedicó a fabricar y vender automóviles pequeños y económicos, lo que le retribuyó bastantes beneficios al irrumpir en el mercado con sus autos pequeños antes que sus tres competidores. Una que la preferencia del público por los autos pequeños y económicos disminuyó...
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...Orient Lines (NOL) is a shipping company established in Singapore since 1967. Thanks to the Asia’s and Singapore’s fast economic growth and to be present in the busiest shipping routes in the world, the company has grown very quick. However since 1990s, NOL has started to suffer due to a slowdown of the regional economic growth, excess capacity in the shipping industry, many competitors on this market and declining shipping rates. In 1996, the company has seen his net profit decreasing by 54% but the results seem to be worse. In order to change this bad situation happening to NOL, the company decided in April 1997 to acquire APL Company, leader in the US shipping line. APL was the oldest and the second largest shipping line in the USA. The company had the largest freight rail services in North America. Despite a smaller fleet than NOL, APL had higher revenue, profits, shipping volumes and the company was good in the innovation part. The acquisition of APL by NOL seems to be profitable for the Singapore shipping Company. But was it the good decision taken by NOL Company to acquire APL Company? If I was the CEO of Neptune Orient Lines Company, I would buy APL Company. Merger and Acquisition strategies had become more and more popular since 1990s. Indeed, using these strategies can help firms to face crisis. That is why NOL decided to use the acquisition strategy in order to overtake the problems that the company had. As the CEO of Neptune Orient Lines Company, I will also choose the...
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...(1876–1965) and his father Captain Peter Maersk Moller founded what would become the Maersk Group in Svendborg, Denmark in 1904. Maersk is a diversified enterprise owning one of the world's largest shipping companies; Maersk is involved in a wide range of activities; it has business operations in the logistics including shipping, transportation and offshore activities. It additionally provides various services in the areas of energy, banking, retail, and manufacturing sectors. Furthermore the Group is involved in the production of Oil, gas and other Oil related activities, including drilling and offshore services. The Maersk Group operates through five core business divisions, which include Maersk Line, APM Terminals, Maersk Oil, Maersk Drilling and Services & Other Shipping. The last business area is comprised of Maersk Supply Service, Maersk Tankers, Damco and Svitzer. The Group owns and operates container carriers, bulk carriers, supply and specialty ships and tankers. The Group is headquartered in Copenhagen, Denmark and comprises approximately 1,000 companies and they employ roughly around 89,000 people with operations spread across more than 130 countries including the triads (Maersk.com). Maersk primarily operates in the Europe, Asia, the Americas, the Middle East and Africa. The company generated revenues of DKK 277 billion (approximately 47 billion US dollars) during the financial year 2013. The net profit was DKK 20.65 billion (approximately 3.3 billion US dollars) for the...
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...* Economy Shipping Company (Abridged) Question 1. What are the relevant cash flows under each of the two alternatives? And in what years do they occur... Save Paper * Hgfdsaswe In the spring of 1950 the controller for Economy Shipping Company was asked to report on whether or not the company should refurbish an old steamboat, the... Save Paper * Current Trends In The shippIng Industry speed to maximize profit. With the intention of cutting costs of fuel, ocean shipping companies are instructing their Captains at sea to throttle back the engines... Save Paper * Marketing Plan For a Mock Company This is indeed a trend that is expected to become more, and more popular while the economy struggles. Companies are forced today to maximize their marketing dollar... Save Paper * a Look Into The Economics Of The Shipping Business / Mediterranean ports / ports in northwest Europe 6|Page Passenger Ships The company owns two passengers vessels that operate on the line of the Suez / Safaga... Save Paper * Shipping for impressive economic progress. There are over four hundred domestic and international shipping companies engaged in maritime trade making China an A class member... Save Paper * Economics - The World Economy 2 Section 3 Section 4 © Scottish Qualifications Authority 2004 Economics 2: The World Economy Unit Student Guide Scottish Qualifications Authority 5.12... Save Paper Financial Outcome: Ford Motor Company sales along...
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...Exclusive Summary Shipping has been an important human activity, especially where prosperity depended primarily on international trade and interregional trade. Transportation has been one of the main factors of globalization, along with communications, international standardization, and trade liberalization. Due to a number of technological, economic, and socio-cultural forces, only limited country can keep itself fully isolated from the economic activities of other countries. Many countries have seen enormous economic growth in the recent past due to their willingness to open their borders and markets to foreign investment and trade. This increased flow of knowledge, resources, goods, and services among world’s nations is called “globalization”, formally defined as the development of an increasingly integrated global economy marked especially by free trade, free flow of capital, and the tapping of cheaper foreign labor markets. Introduction Marine transportation is an integral, if sometimes less publicly visible, part of the global economy. The marine transportation system is a network of specialized vessels, the ports they visit, and transportation infrastructure from factories to terminals to distribution centers to markets. Maritime transportation is a necessary complement to and occasional substitute for other modes of freight transportation. For many commodities and trade routes, there is no direct substitute for waterborne commerce. The Important of Maritime Transport...
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...e-commerce company with headquarters located in Seattle Washington. Amazon is the largest online retailer in the world and produces consumer goods, electronics, e-books and is also a provider of cloud computer services. Founded by its current CEO Jeff Bezos in 1994, Amazon went online officially in 1996. The name was derived from the Amazon River in the legendary female warriors of Greek mythology. Amazon was originally an online bookstore that eventually expanded its product line to meet the demands of the online community. Amazon employees over 69,000 people and have offices, call centers and warehouses in North America, Europe, Asia and Africa. The global Fortune 500 list of 2012 ranks Amazon at a raking of number 206 their previous ranking from 2011 was # 270 ("Top Global 500 Companies," 2012, p. 1). Current operating results In the most recent quarter, July 2012, Amazon reported a net income of $7 million with sales revenue at $12.8 billion. This showed a growth from the second quarter of 2011 where revenue was at $9.91 billion. Forecasters have been fairly conservative for any growth for retailer’s even though Amazon still achieves growth within every quarter. Amazon actually was extremely cautious in prior quarters that they may even lose money due to the condition of the economy. The main reason that is contributed to Amazon’s current growth is there international sales. 44% of Amazons revenue is now contributed to its international sales even though the world economy has...
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...present circumstances, those of recession. Initially, we define the comparative advantage based on the approaches of Adam Smith, David Ricardo's and Heckscher-Ohlin. Furthermore we analyze the current situation of the country, Greece’s economic structure and its trade performance, mainly the exports. In addition we identify the elements of the Greek competitiveness and the results of the fiscal consolidation that Greece is undergoing. Having analyzed the definition of the comparative advantage and the data concerning Greece’s reforms we proceed in identifying Greece’s comparative advantage mainly in four different sectors. Firstly we identify the key factors making the touristic sector extremely profitable for the Greek economy; secondly we analyze the commercial shipping sector then the strategically position of the country and finally the competitive rates in which Greece seems to gain ground. Keywords: comparative advantage, competitiveness, internationalisation, entrepreneurship, financial crisis. 1 Contents: 1. Historical and literature review. 2. Greece – Country Analysis: Reforms and fiscal consolidation. 2.1: Economic Structure and Performance of Greece. 2.2: Elements of Greek Competitiveness. 2.3: Fiscal Consolidation and its results. 2.3.1: GDP growth rate & Consumer Price Index. 2.3.2: Strong austerity measures and their results. 2.3.3: Driving down the deficit – Rebounding Greece 3....
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...Customer Relationship Management Customer relationship management is an enterprise wide effort to acquire and retain profitable customers (AIIM, 2012). CRM affects both the company and customer by building long-term and sustainable relationships by executing the idea to treat different customers differently. Riordan Manufacturing had taken this philosophy and incorporated it into their mission as a company. Their mission reads as follows: Our Focus Six Sigma, leading edge R&D and exceeding ISO 9000 standards define the attitude and abilities of Riordan Manufacturing. We are industry leaders in using polymer materials to provide solutions to our customers challenges. Our R&D is, and will remain, the industry leader in identifying industry trends. Our Customer Relationships We will strive to be a solution provider for our customers and not be a part of our customers challenges. Long-term relationships will be sought by maintaining rigorous quality controls, innovative solutions, a responsive business attitude and reasonable pricing. Our Employees We will maintain an innovative and team oriented working environment. By assuring that our employees are well informed and properly supported, we will provide a climate focused on the long term viability of our company. Our Future We must be focused in achieving and maintaining reasonable profitability to assure that the financial and human capital is available for sustained growth (Apollo Group, 2012). As we...
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...differentiation, medium power from suppliers who supply the resources necessary to run the business, high buyer power because customers can basically find an equal service from any firm in the industry, low substitution threat from other means of shipping transportation, and low threat of new entrants due to the high initial capital outlay and need of management experience. In this analysis, we will delve deeper into each of the dynamics within Porter’s 5 Forces to form an opinion of why the industry is attractive to be in and then discuss how competition greatly increased during 1988-1989. In the air express industry, where customers can ship their packages over long distances via airplane, there is high rivalry because the firms competing in the industry all do the same service. Since there is little differentiation between firms, each firm must battle for customers by either providing better or new services, integrating new competencies into their business processes, or doing business at a low price to create bigger economies to scale which will then cut down operating costs. Firms who want to compete provide aggressive products like next day delivery; integrate new business practices like owning and operating a fleet of jets with company employees; or undercut the competition in viscous price wars. Thus, rivalry with the industry is high. Supplier power is medium to high in the air express industry because firms in the air express industry require precious resources and rely...
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...innovation” from what I would call “plain innovation”. By reading the first three chapters of the book “The Box: how the Shipping Container Made the World Smaller and the World Economy Bigger” I realized that the development of a new product, in this case the shipping container, although it was something new, was not necessarily a “successful innovation”. I believe a “successful innovation” must be measured by (i) the benefit it provides to its users, (ii) the intensity of its adoption, and (iii) the consequent impacts it generates. After its invention, the shipping container was in the market for many years, but people didn’t seem to be convinced of its benefits, didn’t really adopt it, and the impacts it caused, in society and in the companies using it, were insignificant. The true “successful innovation” came when Malcom McLean started using shipping containers in his company in 1956 as a way of reducing transportation costs. He didn’t develop a new product, but he redesigned entirely the shipping system, creating a context in which the shipping container (now a lot bigger than it’s initial versions, but not that different) was able to add value to its users. After that there was a huge drop in transportation costs, almost every product transporting company in the world adopted the use of shipping containers, and the global trading flow and economy changed...
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...Chapter-1 – INTRODUCTION 1.1 Indian Scenario in Shipping Maritime transport, which plays a vital role in the development of the country, comprises ports, shipping, shipbuilding and ship repair, and inland water transport systems. According to the Ministry of Shipping, Government of India, approximately 95% of the India’s trade by volume, and 70% by value, is moved through maritime transport. India is among the top 20 leading countries having large number of merchant fleets in the world. The Gross Tonnage (GT) under the Indian flag was 10.1 million GT as of 1.09.2010, with as much as 1029 ships in operation. Ports act as an interface between ocean transport and land transport. India has 12 major ports viz. Kolkata (including Dock complex at Haldia), Paradip, Vishakapatnam, Chennai, Ennore, Tuticorin, Cochin, New Mangalore, Mormugao, Jawaharlal Nehru at Nhava, Mumbai, and Kandla, and 187 minor ports. Despite recessionary conditions, traffic handled at major ports has grown on an average by 5.7% in the year 2009-10, over the year 2008-09. However, ports like Haldia (-20.4%), Ennore (-6.9%) and New Mangalore (-3.2%) are few of the main ports that witnessed negative growth in 2009-10. Nevertheless, most of the ports have not achieved their target for the year 2009-10. Mormugao (8.5%), Tuticorin (8.1%) Mumbai (2%), Kandla (2%), and Paradip (1.8%) were the only ports which achieved their growth target for 2009-10. Haldia (-22.1%)...
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...the Lloyd's crest are the registered trademarks of the society incorporated by the Lloyd's Act 1871 by the name of Lloyd's. CONTENTS WELCOME TO THE COURSE ........................................................................................................ 3 STRUCTURE OF THE COURSE ...................................................................................................... 4 INTRODUCTION TO MODULE 1 ................................................................................................... 7 1. ECONOMIC ANALYSIS OF THE SHIPPING INDUSTRY ........................................................... 8 1.1 The Function of Shipping .................................................................................................. 8 1.2 The Structure of World Seaborne Trade and the Demand for Shipping Services....................... 8 1.3 The Ton-Mile as a Measurement of Demand for Shipping Services ....................................... 12 2. ANALYSIS OF GLOBAL COMMODITIES ON-BOARD SHIPS .................................................. 14 2.1 Crude Oil Seaborne Trade .............................................................................................. 14 2.2 Other Challenges for Crude oil Transportation ................................................................... 16 2.3 Iron Ore Seaborne Trade ............................................................................................... 16 ...
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...1. Introduction 1.1 Background Japan has the third largest economy in the world. As it is surrounded by sea, the country’s port plays an important role in maritime transportation for both exports and imports. In March 2011, the world was affected when Japan was struck with natural disasters (Earthquake and Tsunami). This sudden disaster sent everyone around the world into frenzy. It affected Japan’s ports, shipping and logistics. As a result of the natural disasters, ports in the northern area of Japan had to stop operations after the Tsunami washed away port facilities, leaving the area in tatters. Ports such as Hachinohe, Ishinomaki and Onahama were severely damaged and it would take months before operations can resume. It will take some time for Japan to rebuild itself as this is the worst disaster to hit the country since the Hiroshima/Nagasaki nuclear bombing during the World War 2. 1.2 Objectives of Project The team will be doing a research and critical analysis on how the crisis has affected Japan’s economy and how the revival of Japan will benefit the shipping economy. The areas of focus will be on the economic impacts of the various shipping markets and other factors contributing to the crisis and forecasting the future outcome in the shipping industry. We intend to go beyond the surface and dig deep into the crisis to fully understand how dealing with a crisis really works. This includes looking at past records as well as analyzing the situation in...
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