Analysis of Porter Maersk

* High Capital Requirements: The capital required to start up a cruise line is one of the key factors contributing to this industry’s high barriers to entry. With the average cost of building a cruise ship rising, the amount of capital needed to start up a cruise line is estimated at one billion dollars. Therefore discouraging any new entrants into the industry.

As technology is constantly working to improve the ships in terms of efficiency, fewer ships are required to carry the same amount of cargo. Also, with further innovation, costs to build ships will eventually decrease and profits will increase. Overall, the long-term prospect of the capesize dry bulk industry looks optimistic.

Since scenario 1 has a negative NPV, we recommend Ocean Carriers to not invest if there is a 35% tax rate in the US. In scenario 2, where the ship is built in HK with a 0% tax rate, then we recommend that Ocean Carrier invest in the ship. This analysis shows that working the ship at a 35% tax rate will not yield a profit on the investment even 25 years into the future, given the increasing costs of survey preparation and the diminishing number of days that the ship is actually able to make money and be commissioned.

Containerisation accounts for the majority of goods most freely exchanges across the world – busiest ports are container ports, trend to continue in the future

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

Price means the pricing strategy you will use. You have already fixed, as an hypothesis a customer price fitted to your customer profile but you will have now to bargain it with the wholesalers and retailers.

The Oxford English dictionary defines price as “ a value that will purchase a definite quantity, weight, or other measure of a good or service”. Simply put, the price of an object represents the overall demand for that product at a specific time. However, every firm had a different ideology about price and they way they set price.

Faster transportation has transformed the distribution of goods in allowing a greater selection of cargo to travel further than it was previously capable of. So what about the costs? "The container made shipping cheap" (Levinson, 2006, p.10). Just after McLean’s idea, it was thought that the costs of shipping were 11 percent of the value of United States exports, and could be as high as twenty-five percent. By contrast, shipping costs in comparison to product price have fallen sharply. (Asteris, 2009). It is not just the use of containers and ships that is responsible for the transportation costs, the larger normal routes, the increasing competition between the major container ship operators, such as Maesrk and Evergreen, the investment in modernising crane handling equipment and the logistics, have all had an impact.

Every container was handled 3-4 times at the terminals per journey and each terminal , the operators had to pay fixed fee to dock the vessel, per container for load and unloading also storing on land until being sent to another vessel. Each seaport run by local authority while the terminal were run by private operator. The containers terminal operators dominates the market by 4 global portfolio with combinesharing almost 30%. While others are largely single location operators.

This section seeks to provide a macroenvironmental picture of the shipping industry, by looking at vary factors as following: political, economic, socio-cultural and technological.

Intermodal’s value proposition for shippers centers around the concept of using multiple, coordinated and highly-managed transportation and distribution services. These services consist of off-dock and terminal drayage, ocean container to domestic equipment transloading, rail linehaul and destination drayage to effect efficient, cost-effective and risk-managed supply chains. The development of

Freight rates are however proportionate to growth of shipping markets and their contribution to the development of shipping markets has been influenced by several factors, some of which lead to negative growth and increase the shipping risks that freight companies are

Shipping industry is a huge field that widely expand all over the world. “Almost all international trade in goods is transported by sea. Ocean shipping plays a central and essential role in the world economy and in world trade. In recent years, international trade has become a dominant factor in economic growth for most industrialized countries. Many newly industrialized countries have become so through major trade growth.” (Fearnleys, 1982) However, without our noticed, the increase the technology, the larger the business, the more the problems will arise. As we know, sometimes there is an article about damaged cargoes, ships on fire, the ship was attacked by pirates and etc. When refer back to the main issues in the case study, there are

The consequences of over-investment appear and the economy starts manifesting over-heating symptoms. New tonnage begins to come into the shipping market when the wider economy has reached its peak. Ship owners are not concerned about this because as far as they have been observing, the prosperity phase is getting better and better so they expect that it will continue on this upward trend. Then the recession hits and shippers become less willing to commit to long term charter parties and take advantage of declining freight rates on the sport market. There is competition as new tonnage enters the declining market between ship owners who try to grab hold of declining fixtures accepting lower freight rates than they had originally anticipated when the decision was made to order new vessels. A downturn in the economy resulted in a decrease in the demand for shipping and tonnage when supply is now inflated. There is a downward trajectory now and as freight rates and asset values decrease shippers hold back in anticipation of a depression and non-shipping banks begin to pull out as they lack the experience of such a volatile market.

The Maersk shipping line is the world’s first largest container shipping company. The Maersk line is a private shipping company founded in 1928 by Arnold Peter Moller and known for reliable flexible and eco efficient services. It is a customer focused company. The corporate office is located at Copenhagen, Denmark. It serves customers through 375 offices in 116 countries employing 7100 seafarers and 25,500 land based employees. It has a fleet of 610 vessels with a capacity of 2,933,081 TEU’s. Maersk line is consisting a share of 15.2% of world containerization. It has 59000 customers across the world. It carries 11 million full capacity containers annually and covers almost all the ports in the world.