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Led by Stopfordian Maritime Economics Simulacrum
The economics paper of the maritime series, following the coverage of the Institute of Chartered Shipbrokers' Economics of Sea Transport and International Trade syllabus. Ten modules build maritime economics from first principles — the economist's toolkit, the demand for and supply of shipping, costs and economies of scale, the tramp, tanker, and liner markets, the economics of ports, shipping in world trade, and exchange rates and the balance of payments. Taught throughout by the Stopfordian Maritime Economics Simulacrum, with theory tied at every step to the empirical record.
Led by Stopfordian Maritime Economics Simulacrum
The question
What handful of ideas does every maritime economist carry, and how do they work in shipping? This module gives you the apparatus: the definitions of economics and maritime economics; the crucial distinction between the micro-economics of shipping and the macro-economic factors that move trade; factors of production, utility and price, and opportunity cost; the price mechanism linking demand, price, and quantity; and an awareness of the competitive models from perfect competition to monopoly.
Outcome
You can deploy the basic tools — identify a micro or macro question, draw the supply-and-demand picture, and reason in opportunity-cost terms. (Basic economic concepts)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
Why is the demand for shipping so volatile, and why is distance, not just tonnage, the true measure of it? This module covers the demand side: how the demand for shipping arises from the demand for goods; GNP and GDP as measures of the activity that drives it; derived demand examined with rigour, and why it amplifies volatility; elasticity of demand and why freight demand is inelastic in the short run; and demand measured in tonne-miles and tonne-kilometres.
Outcome
You can predict the direction and rough scale of the effect of a trade change or a re-routing on shipping demand, reasoning from derived demand, elasticity, and tonne-miles. (The demand for shipping)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
Why can't the industry simply make more ships when rates are high — and what does that sluggishness do to the market? This module covers the supply side: the factors setting supply (tonnage, number, fleet); the trends in world-fleet development through newbuildings and scrapping; the active fleet, surplus laid-up tonnage, and market segmentation; and short- and long-run supply, explaining why supply is inelastic in the short run but elastic over years.
Outcome
You can identify which supply levers respond in the short run and which require the long run, and predict how the fleet will adjust to a market condition. (The supply of shipping)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
Why did ships grow so enormous, and what stops them growing larger still? This module covers shipping costs and economies of scale: the conventional anatomy of shipping costs; why cost per tonne falls as ships grow, and the concept of optimal ship size; why the optimum is capped by ports, canals, and trade rather than by the cost curve alone; how flags and fiscal regimes affect cost; and whether the actual trend in ship size bears out the theory.
Outcome
You can reason about the cost-minimising ship size for a trade and the constraints that cap it, and relate the answer to the observed growth of the fleet. (Cost analysis and economies of scale)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
How does an owner survive in a market so competitive that no single player can move the price? This module covers the dry cargo tramp market: its structure and why it approximates perfect competition; the market demand structure; voyage estimating and breakeven analysis to find the minimum freight rate; and the cost structure of tramp ships and the lay-up decision — when an owner loses less money with the ship idle than trading.
Outcome
You can reason from voyage figures toward a breakeven freight rate and explain when an owner would lay a ship up rather than trade. (Competitive markets — tramps)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
Why does the tanker market answer to politics and the environment as much as to economics? This module covers the tanker market: its structure and the seaborne trade in crude and products; its competitive features — ownership imbalance, identical service, free entry and exit, segmented supply; its restless relationship with the dry market; the heavy weight of political and environmental factors; and recent fleet changes and the freight-market indices.
Outcome
You can reason about how a political, environmental, or cross-market event will affect tanker rates and the fleet. (Competitive markets — tankers)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
Why does the liner trade, for all its apparent market power, earn lower profits than the competitive sectors? This module covers the liner trade as an oligopoly: its characteristics and demand and the trends in ship types; price discrimination and the empirical paradox of low profitability; the link between profit maximisation and filling the ship; and the role and differences of conferences, alliances, and consortia under the pressure of international regulation.
Outcome
You can analyse the liner trade as an oligopoly — reasoning about pricing, utilisation, and cooperative structure — and explain the low-profitability paradox. (Liner trades — oligopoly)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
Why is the time a ship spends in port an economic question as sharp as the freight rate itself? This module covers the economics of maritime infrastructure: the functions of ports, canals, and waterways; the relationship between efficiency and cost and the central importance of ship/port time; port investment criteria and cost and tariff structures; and the long-running debate over public versus private ownership of ports.
Outcome
You can reason about the cost of ship/port time, the tariff and investment logic of a port, and the ownership trade-offs from both sides. (Ports, canals, and waterways)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
Why do nations trade at all, and what does the answer mean for the shipowner? This module sets shipping in the pattern of world trade: trade patterns and the statistics that measure them; inter-industry and intra-industry trade flows; absolute and comparative advantage and why comparative advantage drives trade; and the great policy argument of free trade against protectionism, with the role of the WTO and bodies such as the G8.
Outcome
You can reason about how a trade-policy change affects the pattern and volume of seaborne trade, and hence the demand for shipping. (Shipping and international trade)
Sub-units
Led by Stopfordian Maritime Economics Simulacrum
The question
How can a currency movement turn a profitable year into a loss without a single freight rate changing? This module covers the monetary economics beneath shipping: how exchange rates are determined in free-floating and regulated markets; the effect of currency fluctuations on an industry that earns in dollars but spends in many currencies; the components of the balance of payments and where shipping appears in them; and the relationship between exchange rates and a country's external accounts.
Outcome
You can reason about how a currency movement affects an owner's real result and the competitive position of owners based in different countries. (Exchange rates and balance of payments)
Sub-units