Free Essay

Ship Building

In: Social Issues

Submitted By tayeem124
Words 1866
Pages 8
Ship Building Industry of Bangladesh The history of indigenous shipbuilding in Bangladesh goes back a long way. It is one of the early industries developed in Bengal based on its old business of building boats and sea vessels. Bangladesh has a strong background in building ships since ancient times. Many countries of Asia and Europe regularly bought ships built in Chittagong.

Bangladesh has a strong background in building ships since ancient times. It is quite natural in that Bangladesh has more than 200 rivers with a total length of about 22,155km plus a long coast line on the Bay of Bengal. It is little known today that Bangladesh was the center of building ocean-going vessels in Asia between the 15th and 17th century.

In the early 19th century, the shipyards of Chittagong built many commercial ships of up to 1,000 tons and also British navy vessels that participated in the battle of Trafalgar in 1805. Due to this historic prosperous background and also a natural geographical advantage, there are presently more than 200 shipbuilding and ship-repair yards in Bangladesh. | Ship Building Industry in Bangladesh |
Prospect of Shipbuilding Industry in Bangladesh: The history of indigenous shipbuilding in Bangladesh goes back a long way. It began with wooden-bodied passenger vessels having two decks and gradually improved to steel-body construction of multi-deck passenger carriers in the eighties as the passenger transportation in reverine route peaked.

Cargo vessels under inland shipping ordinance began during the same period with sizes from 200 DWT to 500 DWT. Such construction did not require any organized dockyard or shipyard. These vessels were built on bare land on the riverside, scattered around the country especially where electricity was available on the river banks and construction of inland vessels flourished.

With the ship-breaking industry flourishing in Chittagong, availability of steel plates boosted the inland ship-building in the early nineties and various shipyards started to emerge in this sector. As of Tuesday, April 1, 2008, about two thousand locally-built cargo vessels of varying sizes -- from 500 DWT to 2000 DWT -- are now operating and one thousand vessels having 1000 passenger capacity each are transporting passengers on our inland riverine routes. In then East Pakistan, selection of site for Khulna Shipyard was made in 1954. A German firm was responsible for the establishment of the shipyard. It took three years to build the shipyard. Work started in the shipyard in the month of November, 1957. A British consultancy firm was made responsible for running the shipyard. Since 1967, the shipyard was being run by the local engineers and staff. Engineering equipment, pumps for irrigation, cargo vessels for fertilizer and seed, oil tankers and rail crossing barges were built in this shipyard. Many organizations got their work done in this shipyard. Garbage trucks and foot-over bridges are being built by this shipyard. Six thousand and fifty new ships were built in this shipyard. In the mid 80's, the slipway carriage of the shipyard was broken in an accident. Then it became a losing concern. A decision was taken to transfer this yard to the Ministry of Defense. The Bangladesh Navy took over the management of the shipyard in October, 1999. Then it became vibrant again. However, while the inland ship building was at its nascent stage, Bangladesh got its first exposure of international ship building in 1979. Japanese ship building giant, Mitsui Engineering and Ship Building Industry developed the first and the largest joint venture shipyard with High Speed Ship Building and Engineering Co. Ltd. at Fatullah. This joint venture enabled the first private sector ship repair building yard with modern facilities, slipways, workshops with Japanese management and local manpower and a proper shipyard emerged.

For the first time, Highspeed with their Japanese partners was able to build vessels according to international classification for meeting national requirement. To mention a few achievements, this yard constructed five deep-sea fishing trawlers and participated in an international tender floated by the FAO (Food and Agricultural Organization, UN) to build eight grain carriers.

Shipbuilding Industry of Bangladesh: Before becoming a ship building nation, there are four mandatory conditions in order to produce ocean-going vessels: international standard shipbuilding practice, quality management system, coastal and riverine country, and infrastructure with proper sheds and skilled manpower. Bangladesh scores full marks on all these counts. ASSL (Ananda Shipyard and Slipways Ltd.) and WMS (Western Marine Shipyard) which are the most modern and largest shipyards in Bangladesh. Ananda Builders (ASSL), an engineering firm, established a shipbuilding yard on the Buriganga River in 1983. With growing volume of business the yard was shifted in 1985 to its present location on the river Meghna, an hour's drive from the capital city Dhaka.
Western Marine Shipyard Ltd. (WMShL), started our shipbuilding activities since 1994. Finally the company was founded with its own slipways in 2000. It is located in Chittagong the major port city of Bangladesh.

With global shipbuilding orders of very large vessels increasing everyday, a market is emerging in Bangladesh for shipbuilding yards that can concentrate on producing smaller sea-going vessels as the industry leaders like China, South Korea and Vietnam go for the larger container ships, bulkers and tankers. According to shipbuilding experts in this country and abroad, Bangladesh can emerge a surprise competitor in the small to medium ocean-going vessels market. This particularly applies to shipyards that until now were best known for scrapping and breaking ships, and not building them. Two shipbuilders — Meghnaghat-based Ananda Shipyard and Slipways Ltd (ASSL) emerged in 1999 with 80,000 square meters (or 20 acres) of total area and Chittagong-based Western Marine Shipyard Ltd (WMSL) — 40,000 square meters, which formed in 2002. They signed agreements and received foreign orders, with a combined worth of around USD 250 million. They are currently the only two shipyards receiving international orders. Ananda Shipyards said it signed agreements worth around $180 million while Chittagong-based Western Marine put its total orders to more than $70 million. Chairman of Ananda Shipbuilders Abdullahel Bari said:
"It's a huge leap forward for us. If the trend continues, ship building in Bangladesh will be the second largest exporter after garments in 2015,"
Shakhawat Hossain, Managing Director of Western Marine said:
"If we can grab one per cent of the global order for small ships, the amount will be worth $4.0 billion. The global market for small ships is now about $400 billion,"
Western Marine, which was inspired by professor Bari's venture, has also had a remarkable year in 2007 during which it signed deal worth over $80 million including the construction of five multipurpose cargo vessels for a Danish owner, each weighing 4100 tones. Their comments follow what the experts said an epoch-making year for the country's ship building industry, which earlier had been languished in building smaller launches and tankers for local operators. But recently, Leading local shipbuilders received export orders of world-class seagoing small, large and ice-class vessels worth 478 million US dollar with a deadline to deliver those by 2013. Ananda Shipyard and Slipways Ltd. (ASSL) received orders for export of 28 vessels valued at 348 million US dollar from different countries including the Netherlands. On the other hands, Western Marine Shipyard Ltd. (WMSL) got orders worth $130 million to export 12 vessels to a German company styled Grona Shipping. Shipbuilders say the huge orders were bagged due to the government's declaring the sector as thrust one. Ananda then went on to sign two more deals worth $82 million in October and December in the year 2009. Bari said. “Later this month (2009) my company would sign deal with another German company to build four ships, each worth $17.5 million.” Western Marine Shipyard Ltd. (WMSL), which has set up a modern slipway on the bank of the river Karnaphuli, has also signed a letter of intent with two foreign companies to construct 14 small vessels at a cost of around $150 million. It hopes a full agreement with the two companies can be signed later the month of June, 2010. MD of WMSL, Mr. Hossain said: "To be frank, we are now swamped with orders. But with the existing capacity, we can only build vessels worth around $100 million a year," Western Marine Shipyard delivered two largest vessels ever built in the country to a German buyer on Friday, November 26, 2010.

The two 100-metre-long ice-class vessels of the company, Grona Ammersum and Grona Biessum, having a capacity of 5,200 DWT (deadweight tonnage), will be delivered to Grona Shipping GmbH at a ceremony at Chittagong Dry Dock Ltd. The global financial recession dented many developed countries excepting developing ones including Bangladesh and that is why buyers of developed countries expressed their interest in giving shipbuilding orders to Bangladesh. Chairman of Association of Export-Oriented Shipbuilding Industries of Bangladesh (AESIB) Abdullahhel Bari, said. “The shipbuilding industry will be able to get diverse facilities from buyers like the country's garment industry if the government increases shipbuilding facilities.

There is no alternative to increasing shipbuilding facilities to be a major player in the international market as more than 50 percent ships are getting older than 20 years.”
Abdullahhel Bari also said: “To compete with many South Asian countries including India, Bangladesh should have at least 10 shipyards that involve cost of Taka 3,000 crore”

Ananda Shipyard and Slipways Ltd. (ASSL) and Western Marine Shipyard Ltd (WMSL) are mainly producing multipurpose container vessels of 4500 dwt (dwt stands for Deadweight Tonnage, is a measure of how much mass or weight a ship can carry) up to 6100 dwt.
They have customers ranging from the local investors such as BIWTA (Bangladesh In Land Water Transport Authority), Roads and Highways, Chittagong Port Authority, Bangladesh Institute of Marine Technology (BIMT), Bangladesh Police and local tours and travels organizations like Hotel Sarina, Keari Sinbad through to international companies like Stella Shipping and Sea Consult Ltd of Denmark, Wessels Reederei GmbH and Komrowski Maritim GmbH of Germany. Experts said Bangladesh has become a new destination for companies seeking construction of small ocean-going vessels as traditional shipbuilding nations such as South Korea and China now focus on building large ships. Even Vietnam, which is relatively new in ship building, is no longer interested to build small ships weighing up to 25,000 dead weight tones. Adding their reluctance has made India and Indonesia the new destinations for small shipbuilding, Mr. Hossain, MD of Western Marine said that, "They want to build bigger vessels because it is relatively cheaper and requires fewer people" The focus on Bangladesh came in April last year when Ananda signed deals worth around $100 million with two German shipping companies to build eight vessels with capacity for 325 containers by June 2010. Bari, a former professor of Naval Engineering said that: “As far as I know this was the single biggest export order for the country. The contract sealed our name as a new ship building country in the global map."
The Export Promotion Bureau (EPB) said it does not have any data on the size of export orders by individual exporters.

Similar Documents

Premium Essay

Ship Building Industry

...craft wooden boat for commuting and transporting goods. They also nurtured their heritage of craftsmanship in boat building over many centuries and transferred this artistic skill to subsequent generations across different cluster of population. Historical records say that Chittagong port was the best centre of building ocean-going vessels in the middle of the 15th century. Even in the 17th century, the entire fleet of ships of the Sultan of Turkey was built at Chittagong. Also in 1805, the British Navy built ships at Chittagong for the famous battle of Trafalgar. However, with the passage of time, the glory of shipbuilding in this region began to fade. Shipbuilding revived again when a number of local entrepreneurs of Bangladesh brought name and fame for the country by developing potential in shipbuilding by handing over some ocean-going vessels to overseas buyers from Denmark, Finland and Mozambique. Bangladeshi shipbuilders have also handed over few ice-class vessels to a German company and more vessels are going to be delivered by the next few years. Thus shipbuilding in Bangladesh is marching forward in a way to securing a firm position in the world market and at the same time, the country is returning slowly to its past tradition of building ships for foreign countries. Some leading local shipyards like Ananda and Western Marine are now engaged in building over 40 small to medium category vessels worth about $0.6 billion, mainly for European buyers. Bangladesh is......

Words: 1582 - Pages: 7

Premium Essay

Prospects of Ship Building Industry in Bangladesh

...International Conference on Marine Technology 11-12 December 2010, BUET, Dhaka, Bangladesh STUDY ON SOME COMPETITIVE PARAMETERS FOR SHIPBUILDING INDUSTRY IN BANGLADESH N. M. Golam Zakaria, M.M. Rahaman and Kh. Akhter Hossain Department of Naval Architecture and Marine Engineering, Bangladesh University of Engineering and Technology, Dhaka, Bangladesh gzakaria@name.buet.ac.bd ABSTRACT Despite Bangladesh has glorious history & heritage as a shipbuilding nation since ancient time, shipbuilding has been in focus only from the last couple of years. The optimism about this industry arose from the success attained by a number of local entrepreneurs who brought the name and fame to Bangladesh as a country with great potentials in shipbuilding by building and handing over some ocean-going vessels to overseas buyers. Since then, the shipbuilding in Bangladesh did not have to look back and now new opportunities are knocking at the door to flourish this industry further. However, due to global nature of this industry, an assessment of suitability to modern shipbuilding in terms of global standard is of prime importance. This paper focuses on studying some crucial competitive factors like labour skill, labour availability, labour man-hour, labour cost & productivity for local shipbuilding which are the inherent part for expansion of this industry. The analysis also focuses on the existing access to the resources like materials, knowledge and capital for shipbuilding. Comparison of these......

Words: 3758 - Pages: 16

Premium Essay

Prospects of Ship Building Industry in Bangladesh Essays and Term Papers

...with Danish investors to build multipurpose vessels. On at least two instances, Danish shipping interests recently have placed substantial orders with Bangladeshi shipyards. Ananda Shipyard in Meghna Ghat and CS and Partnere A/S, a Danish ship consortium, have signed a agreement to build a ship, said a press release. The first ship – a 2,900 DWT multi-purpose vessel currently under construction at Ananda Shipyard and will be delivered in early 2008 – is the first of a series of up to 14 ships ordered by the Danish investors.The second order landed by a Bangladeshi shipyard was when Western Marine in Chittagong signed a contract to build up to 5 multipurpose vessels (4,100 DWT) to be delivered to a Danish ship consortium. ‘The two orders have positioned these shipyards as serious players in the international shipbuilding industry in strong competition with Chinese and Vietnamese shipbuilders, said Danish Ambassador to Bangladesh Einar Hebogard Jensen. ‘In order to live up to the highest international standards to design ship and to obtain international accreditation from bureaus such as “Germanisher Lloyd” and “Norske Veritas” it will be important for the shipyards to be able to import various fittings and components necessary for the ships to reach an international standard,’ Einar commented. “To live up to export requirements, it will be essential that a mechanism can be introduced for facilitating an easy clearance of such fittings and components when imported. A “Green......

Words: 426 - Pages: 2

Free Essay

Prospect of Ship Building Industries in Bangladesh

...PROSPECT OF SHIP BUILDING INDUSTRIES IN BANGLADESH Md. Mahfujul Amin 10364075 Managerial Communication BUS 502 Spring 2011 BRAC UNIVERSITY Prospect of ship building industries in Bangladesh Abstract: Bangladesh has a thousand year old history in shipbuilding. There are more than 200 shipyards in the country, which are mainly engaged in building and repairing low quality inland vessels. Two shipwards have succeeded in making international classed vessels- and many more will come. It is about 15% cheaper to produce a ship in Bangladesh than anywhere else and the industry is expected to grow significantly. Introduction: Bangladesh is enjoying a boom in ship building. Driven by rising demand and a global supply shortage, existing players in the market have been able to capitalize on a global backlog in orders and sharp rises in prices. While investment in existing shipyards provides significant investment opportunities, investment in new yards may less compelling given two to three year lead times, a forecast fall in demand from 2011 and global dominance from China. However, leveraging its low cost base, adopting new technologies, coupled with government incentives and a strategic focus on areas...

Words: 1479 - Pages: 6

Premium Essay

The Current Status and Future of Shipbuilding Industry in Bangladesh

...total area of the country. Here rivers and water transports play a vital role for economical and commercial activities in Bangladesh. Major export and import of Bangladesh (about 85%) is also traveled by sea. At present more than 5,000 inland/coastal ships have been plying all over the country, which carry more than 90% of total oil product, 70% of cargo and 35% of passengers. More than 1,00,000 skilled workers and 150,000 semi-skilled workers are employed in this labor-intensive industry. All inland ships are constructed and repaired in local shipyards. Bangladesh harbours the second largest ship breaking industries in the world. They are the prime source of raw material including plate, frame, stiffener, longitudinal, pipe, old engine/generator, and even auxiliary machinery, for most of the local private shipbuilding yards. Those are used as raw material in manufacturing and repairing inland shipping fleet. Recently Bangladesh has successfully exported her first ocean going ship to Denmark, which was costing US$ 7 million. Ananda Shipyard and Slipway Ltd, the leading private owned shipyard, got orders from Germany, Denmark and Mozambique to build more than a dozen ships with the value costing of US$300 million. Few more quality ship builders like Western Marine...

Words: 4854 - Pages: 20

Premium Essay

Paper on Bangladesh

...wooden boat for commuting and transporting goods. They also nurtured their heritage of craftsmanship in boat building over many centuries and transferred this artistic skill to subsequent generations across different cluster of population. Historical records say that Chittagong port was the best centre of building ocean-going vessels in the middle of the 15th century. Even in the 17th century, the entire fleet of ships of the Sultan of Turkey was built at Chittagong. Also in 1805, the British Navy built ships at Chittagong for the famous battle of Trafalgar. However, with the passage of time, the glory of shipbuilding in this region began to fade. Shipbuilding revived again when a number of local entrepreneurs of Bangladesh brought name and fame for the country by developing potential in shipbuilding by handing over some ocean-going vessels to overseas buyers from Denmark, Finland and Mozambique. Bangladeshi shipbuilders have also handed over few ice-class vessels to a German company and more vessels are going to be delivered by the next few years. Thus shipbuilding in Bangladesh is marching forward in a way to securing a firm position in the world market and at the same time, the country is returning slowly to its past tradition of building ships for foreign countries. Some leading local shipyards like Ananda and Western Marine are now engaged in building over 40 small to medium category vessels worth about $0.6 billion, mainly for European......

Words: 1525 - Pages: 7

Premium Essay

Shipbuilding

...discussed. Key Words: Problem identification, shipbuilding industry, Shipyards. INTRODUCTION Bangladesh is a maritime nation with 1,66,000 sq. km area of sea, abundance with living and nonliving resources1. There are more than 200 rivers all around the country, with a total length of about 22,155 km, which occupy about 11% of total area of the country. Here rivers and water transports play a vital role for economical and commercial activities in Bangladesh. Major export and import of Bangladesh (about 85%) is also traveled by sea2. At present more than 5,000 inland/coastal ships have been plying all over the country, which carry more than 90% of total oil product, 70% of cargo and 35% of passengers. More than 1,00,000 skilled workers and 150,000 semi-skilled workers are employed in this laborintensive industry3. All inland ships are constructed and repaired in local shipyards. Bangladesh harbours the second largest ship breaking industries in the world. They are the prime source of raw material including plate, frame,...

Words: 9671 - Pages: 39

Free Essay

New World Discovery

...because of the new technology and to greater extent knowledge. This advancement didn’t only allow them riches, because they did benefited highly. It also created a path way for great discovery that subsequently; cause a change over and with that discovery allowed the world to be what it is today. In the 1450s invention of the printing press which made available books, maps, travel an explorers accounts. * Prince Henry the “Navigator” set out to expose Portuguese sailors with the most up to date geographical ideas. He made a collection of new material. * Navigational Instrument: Astrolobe, cross- staff, quadrant and compass which helped to fix a ship’s location Prince Henry had these instruments improved. * Ship Building: Faster ships which carried small...

Words: 1036 - Pages: 5

Free Essay

History of Maritime Technology

...("Designing a Faster Boat Hull - ENGINEERING.com," 2011). The technologies that first made this possible have evolved in amazing ways. Of the many that enabled the success of maritime travel, the most influential include advancements in hull design, propulsion, and navigation technology. From the earliest attempts at crossing large bodies of water, the first major obstacle has been the design and construction of a vessel which is capable of doing so. Shipbuilding is the combination of structural components that together make a fully capable vessel. The major component of enabling a boat to float on water is the hull. The hull of a ship or boat is often considered analogous to the foundation of a building. It is a well-known fact that the strength of any structure is only as good as its foundation and the same is true of the hull of a boat. As stated in Design of Ship Hull Structures, “The most important duty of the hull structure design is to supply a strong enough hull structure against the internal and external loads” (Okumoto, 2009, p. v). There are many different types of hull designs, each of which is engineered specifically for the type of work the vessel is intended to do. Major aspects of the design include shape...

Words: 2943 - Pages: 12

Free Essay

Hydraulically Operated Doors Aboard Seagoing Vessels New Safety Regulation Proposal

...Canada due to accidents at sea, one which was caused by a hydraulic door. To that end, this paper will focus on preventing injury and death caused by hydraulically operated doors and hatches that operate either manually or automatically. A vessel is divided by watertight bulkheads to survive flooding, following a collision or grounding. The more watertight bulkheads there are, the safer the ship is against capsizing and sinking. However, a high number of bulkheads may restrict the use of spaces on board and make it hard for the crew to move between the divided spaces. So, watertight doors are fitted in between bulkheads which should be watertight. Doors can usually be closed from the bridge, or other control room, for the purpose of saving the ship, and can also be opened and closed locally, allowing personnel to pass through, as well as to escape in an emergency. Saving the ship has priority, so usually the bridge can take control of all doors to close them. There are many different regulations pertaining to the operation of these doors depending on the class, and type, of ship it is. However, there is no all encompassing safety regulation to prevent injury or death due to accidental door closure. The Canada Shipping act has some regulations pertaining to...

Words: 1193 - Pages: 5

Premium Essay

Shipbuilding In Colonial America

...attributes that the wood in Colonial America could provide were desirable to the British. Another benefit of buildings ships in North America was that they were cheaper than those built in British yards. Finally, Building ships in North America also gave the colonists another useful trade item. These are the main reasons why shipbuilding...

Words: 767 - Pages: 4

Free Essay

Juice

...destroyer spearheaded some of the most critical missions in a confrontation with Iraq. Now tethered to a dock on San Diego's sprawling naval base, the Benfold gleams with power. When eating up the sea at full throttle, she generates a plume of froth that's two-stories high. What you don't expect to find on board the Benfold is a model of leadership as progressive as any celebrated within the business world. The man behind that model is Commander D. Michael Abrashoff. His career includes a sterling service record, combat experience, and prestigious posts in Washington, DC. He has won dozens of medals. He is also credited with building the Benfold's reputation as the best ship in the Pacific fleet. Last year, in fact, the ship won the prestigious Spokane Trophy for having the best combat readiness in the fleet -- the first time in at least 10 years that a ship of its class had received that honor. Yet Abrashoff doesn't quite look the part: Think of a military leader, and you may envision George C. Scott's depiction of General George S. Patton. Abrashoff, however, has an easy smile and electric-blue eyes. Behind Abrashoff's relaxed confidence is his own brand of organizational zeal. Settling into his stateroom, Abrashoff, 38, props his feet on a coffee table, sips a soda, and says, "I divide the world...

Words: 3690 - Pages: 15

Premium Essay

Maritime Economics

................................................................................................. 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 2.4 Coal Seaborne Trade ..................................................................................................... 19 2.5 Grain Seaborne Trade .................................................................................................... 21...

Words: 10161 - Pages: 41

Premium Essay

International Business Interview

...Ngan Pham INTB 3354 (Tuesday 4:00-5:30PM) 11/30/2014, 11:30AM, Skype Ashley Ngo, Regional Marketing Executive Position (Europe Trade Section), Hanjin Shipping Co. Ltd International Business Interview Three specific questions asked: 1. What type of competitive strategy does your business use? 2. What specific product, promotion/brand, and pricing adjustments are necessary to market your business abroad? 3. What role do particular countries have in the production process in your global supply chain operations? Essay Hanjin Shipping is popular worldwide because of not only the largest company in the Korea’s shipping industry, but also one of the ten world’s biggest cargo shippers. Hanjin Shipping provides services over the world with over a hundred million tons of cargo delivered annually. To know more about what type of competitive strategy Hanjin primarily uses, how it markets the business internationally, and what role a particular office of Hanjin has in the production process in the global supply chain operations, I had a small interview with one of the Executive Sales and Marketing in Europe Trade Section of Hanjin’s branch office in Singapore. Originating from Korea, Hanjin develops global strategy to expand its regional offices to U.S., Europe, and Asia. With high quality service, Hanjin differentiates from the rest of other shipping lines. The principal responsibility of an Executive Sales and Marketing position is to provide Feeder service network......

Words: 723 - Pages: 3

Free Essay

The Baltic Dry Index as an Indicator of Worldwide Economic Activity

...signal both an upcoming rise and decline in the GDP . The very nature of the BDI prevents it from being manipulated by governments or other outside entities and since the supply of ships to haul materials is for all purposes inelastic, it is a true indicator of economic activity as the index will rise with demand as well as decline when there is a surplus of ships available. What is the Baltic Dry Index? The Baltic Index has roots all the way back to 1744 where ship captains and merchants would meet to discuss business deals at the Virginia and Maryland Coffee House in London. It later changed its name to the Virginia and Baltick to represent a more accurate description of the trading routes frequented by its customers. (The Baltic Exchange) Eventually in 1823 it adopted a more formal atmosphere that required membership with strict requirements. Fast forward to 1985, this is the birth of the Baltic Index as it is known today. The index is essentially an average cost of what shipping companies charge to ship dry goods in bulk such as wheat, coal, ore, and so forth. It is compiled daily and is an excellent indicator of economic activity because the supply of available ships is fixed due to long lead times in construction of new vessels. It does fluctuate with the season due to the availability of ships, but overall an increasing index is a sign of increasing economic activity because producers are ordering raw materials to make goods to be sold on the market. Same as a......

Words: 1876 - Pages: 8