110009 - MARITIME ECONOMY

Subject type: Mandatory

Coordinator: Maria Dolors Celma Benaiges

Trimester: Third term

Credits: 6

Academic year: 2025

Teaching course: 1

• English

The maritime economy is vital to understanding the industry of the maritime sector. The shipbuilding industry is a reflection of global trade. The more trade increases, the greater the demand for maritime transport. For this reason the maritime economy is complex as it is interrelated with the overall growth of the economy.

A theoretical and practical analysis of the principles of maritime economics will be seen. The main aspects that will be seen are:

• Maritime supply and demand.
• The Difference Between Cargo Ships And Container Ships.
• The Cycles of the Maritime Economy.
• Economic Development.

During the course special attention will be paid to:

• Outsourcing. Identification of costs, including travel costs, capital costs and operating costs.
• The four economic markets: freight, second hand, new construction and scrapping.
• Understanding the dynamics of freight creation, including its calculation and prediction.
• The Economics of Ship Design.

The classroom (physical or virtual) is a safe space, free of sexist, racist, homophobic, transphobic and discriminatory attitudes, either towards students or teachers. We trust that together we can create a safe space where we can make mistakes and learn without having to suffer the prejudices of others.

UNIT 0: INTRODUCTION TO THE SUBJECT

• Welcome to the subject
• Vocabulary of the subject
• References and Bibliographic citations

UNIT 1: THE ECONOMIC AND COMMERCIAL ENVIRONMENT OF THE MARITIME TRANSPORT MARKET

1.1 Economic analysis of the maritime sector

• Evolution of the naval sector in the last 5000 years. Super-specialization and globalization.
• The structure of world maritime trade. Derived Demand.
• Tona-Mile as a measure of the demand for transport services

1.2 Analysis of cargoes carried on board ships

• Types of loads. Units of measurement
• Types of ships and adaptation to the market.

UNIT 2: THE ORGANIZATION OF THE MARITIME MARKET

2.1 State regulations:

• Flag (Flag State)
• Port State
• Coastal State
• Classification societies

2.2 Registration and choice of flag

• The Structure of the World Fleet
• Organization chart of companies that form a ship

2.3 Agreements

• Marpol, SOLAS, Load Lines, CORELEG, SCTW, Nox / Sox, Polar Code
• Is shipowners paid for quality? The economy of ship safety and the polluter pays.
• The cost of accidents at sea.

UNIT 3: COMPARISON BETWEEN "BULK" AND "LINER"

3.1 Definition Liner and Tramp

• Price discrimination
• The need for even larger container types
• The effects of ship size on shipping companies.
• Economies and diseconomies of scale.
• Oligopolistic behavior, monopoly, perfect competition and cartel, consortia and alliances.
• Comparison between Bulk and Liner
• Similarity to the perfect competition model

Role of ports in the transport system

UNIT 4: COSTS, INCOME AND CASH FLOW

4.1 Classification of elementary costs: Fixed and Variable

4.2 Classification of shipping costs:

• Capital (CAPEX): Initial purchase, Credit and Sale of the ship.
• Voyage: Bunkers, Ports, Handling, Canals.
• Operational (OPEX): Maintenance-repair, Insurance, Administration, Crew and maintenance.
• Particular case: Insurance, type that exists. Economic impact of piracy.
• Particular case: Costs in liners
• Cost conclusions

4.3 Income: Chartering and its modalities

• Bare Boat
• Time Charter
• Voyage Charter, Special Case COA
• Own or charter ships? Associated Risks.

UNIT 5: FINANCING OF SHIPS AND SHIPPING SHIPS

5.1 Financing systems

• Equity
• Crèdits
• Good
• Other sources of financing

5.2 Investment analysis

• Depreciation, Residual Value
• NPV

5.3 Average Value of Capital Costs

5.4 Income Statement, Profits or Losses, Profit Maximization and Cash Flow

UNIT 6: THE CHARTER MARKET: SUPPLY AND DEMAND

6.1 Market. Introduction to the 4 markets.

6.2 Structure of the freight market

• The function of supply and demand
• Basic characteristics of the freight market
• Freight Cycle Cycles: Short Cycle and Long Cycle
• Supply productivity

6.3 The regular online freight market

• The freight on the regular line
• The value-added services of the regular line

UNIT 7: THE NEW CONSTRUCTION MARKET, SECOND HAND AND SCRAP

7.1 The new construction market     

• Offer shipyards internationally
• Ship demand cycles
• Price of the newly built boat: Interaction with other markets
• Costs and revenues of a shipyard

7.2 The second hand market or buying and selling

• Supply and demand
• Does the type of ship matter to a speculative investor?
• Second hand price determination

7.3 The scrapping market

• Characteristics, operation and drainage countries
• When to scrap
• Price factors

UNIT 8: TRENDS AND DEVELOPMENTS IN MARITIME TRANSPORT

8.1 Forecasting and statistics

8.2 Ship and operation design economics

• Types of cargo and ship designs
• Economic criteria for evaluating ship design. Weighted Technical Value
• The justification for larger ships
• digital technology
• Automation
• EEDI and the lowest energy consumption economy

8.3 Impact on demand for environmental concerns

Final exam 40%

Continuous Evaluation 60%:

Midterm exam: 15%

Final quizzes for each block: 25%

Evaluation of the 2 seminars of the course (project-oriented and research-based learning): 20% (10% per seminar)

Any form of academic fraud will be sanctioned in accordance with the center's assessment regulations. If signs of fraud are detected, including the improper use of generative artificial intelligence tools, the subject's teaching staff may call the student for an individual interview with the aim of verifying their authorship.

Stopford, Martin. Maritime economics. 3rd ed. London: Routledge, 2009. ISBN 9780415275583

Economy of the Maritime Sector. First edition. Madrid: Spanish Maritime Institute, 2010. ISBN 9788481987904.

Economics of Transport and International Trade 2013 Edition, Institute of Chartered Shipbrokers, ISBN 978-1-908833-18-1

GRAMMENOS, Costes Th, The handbook of maritime economics and business, 2nd ed, London: Lloyd's List, 2010. ISBN 978 1 84.311 880 0

PALAU, Enric. Maritime Economy. Keys to Naval Trade, ISBN-13: 978-1515214557; ISBN-10: 1515214559; Publisher: Createspace Independent Publishing Platform; Edition: 1 (March 1, 2015); Soft cover: 216 pages.