Maritime Operations Final Study Guide

The best known of the early theories of the benefits of trade was developed by Adam Smith in Wealth of Nations and it is often referred to as the _________________________________.

"Theory of Absolute Advantage"

U.S. merchandise exports to the 20 FTA partners with agreements in force totaled:

$710 Billion

How many countries currently trade by sea?

100

A merchant ship is depreciated (written off) over __________ years on a liner basis.

20

Hanjin filed for bankruptcy in

2016

The International ocean container sizes by ISO are:

20ft and 40ft

How much trade was roughly split between Atlantic and the pacific and Indian Ocean in 2005?

50-50

According to the UNCTAD, what percentage of global trade by value is carried by sea and are handled by ports worldwide?

70%

US Merchandise Trade Size (US $ billion) by 2014 was:

>1000

Which of the following is not a variable of Supply in the Shipping Market Model? Freight Revenue Scrapping & Losses Average Haul Fleet Productivity

Average Haul

What does the acronym BCI stands for?

Baltic Exchange Capesize Index

The Caribbean and Central America region starts with Mexico in the north, takes in the Caribbean islands and stretches down the coastline to _____________________.

Belize, Honduras, Nicaragua, Costa Rica, and Panama.

_____________________ is one of the most influential economic theories ever developed, providing the intellectual foundation for the free trade philosophy which has dominated political thinking over the last half century through the WTO.

Comparative Advantage

Which of these is NOT a complexity of Global Supply Chain? Customers Distance Time Culture Government

Customers

What are four innovations to transform merchant shipping?

Deep Sea Cable Network, Screw Propellers, Iron Hulls, Steam Engines

Which of the following is not a sector of the Freight Market? Voyage Market Time Charter Market Freight Derivatives Market Demolition Market

Demolition Market

What are the three fundamental reasons for trade?

Difference in manufacturing costs, Temporary imbalances, Difference in natural resources

The most important influence on the shipping market are ____________ shocks.

Economic

3 economic centers dominate Maritime trade - North America, Europe and Asia and those areas cover 80% of the World's manufacturing industry and much of its technology in the areas. Is this statement true or false?

False

80% of the tonnage of seaborne trade is associated with the energy and metal industries. Is this statement true or false?

False

According to the Code of Hammrubi, the ships were required to be hired at a variable tariff, depending on the cargo capacity of the vessel. T/F?

False

According to the UNCTAD, around 90% of global trade by volume and over 70% of global trade by value are carried by sea and are handled by ports worldwide. T/F?

False

As GDP increases, so does exports. Is this statement true or false?

False

Asia is the world's second largest seaborne trading area, 50% less than western Europe. Is this statement true or false?

False

Containerization had two consequences for transport demand which are economic of Scale (bigger ship) and commodity, true or false?

False

Derived demand is demand for one good or service in one sector occurring as a result of demand from the same sector. Is this true or false?

False

EBITDA stands for earnings before interest, tolls, depreciation and amortization (EBITDA). Is this statement true or false?

False

Finished materials account for a large part of seaborne cargo. Is this statement true or false?

False

For high volume inter-regional cargoes, deep-sea shipping is one of the economic transport between the continental landmasses. T/F?

False

Four main aspects to the transport service which contribute to the product 'delivered' by shipping companies are price, speed, just-in-time and security. Is this statement true or false?

False

Freight derivatives do not rely on indices because they do not accurately reflect the risk. Is this statement true or false?

False

Freight rate Mechanism links World trade and Freight market. Is this statement true or false?

False

Freight rates are the secondary influence on ship prices. Is this statement true or false?

False

Germans took the Phoenician's place as the leading maritime trader. T/F?

False

ISO standard ocean container is 40 feet and 48 feet, true or false?

False

In 2005, the shipping industry transported 7.0 billion tons of cargo between 200 countries. T/F?

False

In a shipping company's balance sheet is where are we able to know how much cash the company paid in or paid out during the period. Is this statement true or false?

False

In the early 1970's, about 88% of the tanker fleet was on the period charter. Is this statement true or false?

False

In the shipping company's cashflow statement is where we know how wealthy the company is at a specific point in time. Is this statement true or false?

False

Lloy's Register sets economic regulation and safety regulation. T/F?

False

North America accounts for 32% of the world seaborne trade in 2005. Is this statement true or false?

False

Panamax is a vessel that can transit the Panama Canal within 8,000 TEU, true or false?

False

Parcel size distribution (PSD) function describes the weight of parcel size in which commodity is transported. T/F?

False

Seasonal cycles are generally more noticeable when the oil market is just in balance and less apparent when it is very tight or in surplus. Is this statement true or false?

False

Shipping industry developed new system, which are passenger liner, cargo liner and bulk liner. T/F?

False

Six different type of the liner fleet are Container-ship(Cellular0 , Multi-purpose vessels, Tweendeckers, General Cargo Liners, Ro-ros and bulk vessels, true or false?

False

The ACF analysis provides information about the cash that will be generated by undertaking a particular voyage or sequence of voyages. Is this statement true or false?

False

The Atlantic Ocean is twice as big as the Pacific Ocean. Is this statement true or false?

False

The Atlantic, the pacific and the Indian Ocean cover 51% of the globe. Is this statement true or false?

False

The DCF analysis is concerned with calculating the cashflow generated by the business as a whole over a period of time. Is this statement true or false?

False

The Shipping risk is defined as measurable liability for any financial loss arising from foreseen imbalances between the supply and demand for sea transport. T/F?

False

The Supply function describes the relationship between per capita income, commodity prices, and the consumption of the product and is generally referred to as the consumer demand function. Is this statement true or false?

False

The bulk carrier travels at a speed of 23 knits for 80.1 days, and 47 days using the container ship at a 13.6 knot. Is this statement true or false?

False

The four types of contractual agreements commonly used are: voyage charter, time charter, tourist charter and bare boat charter. Is this statement true or false?

False

The freight rates are higher for the new ships due to the reason of more maintenance and operations costs. Is this statement true or false?

False

The importance of the PSD function is to ask the question of which cargoes go in which ships. is this true or false?

False

The purpose or function of Logistics is to serve as a connecting link between the spatially separated units within a firm's own organization (such as between plants and warehouses) and between units of the firm and units of other firms and individuals (such as suppliers and customers). Is this statement true or false?

False

The transport network consists of node, mode and railroad. Is this statement true or false?

False

The voyage cashflow is the time value of money. Is this statement true or false?

False

There are currently about 350 companies offering liner services of one sort or another, true or false?

False

Trans-Oceanic Trade Partnership Agreement is a free trade agreement between the US, Canada and 10 countries in the Asia-Pacific region. Is this statement true or false?

False

Western Europe accounts for 33% of the world imports and exports, Russia, and Eastern Europe accounts for 13%. This makes its trade half the size of that North America. Is this statement true or false?

False

The contract of affreightment is where the shipowner agrees to carry a series of cargo parcels for a ____________ price per ton.

Fixed

The Panama Canal expansion project was completed in:

June 2016

What are the three economic indicators for the theory to determine a country's trade?

Land area, Population, GDP

5 specialized shipping services

Liquefied gases, Chemicals, Cars and Wheeled Vehicles, Refrigerated Cargoes, Forest Products

_______________ is the process of planning, implementing, and controlling the efficient, effective flow and storage of raw materials, in-process inventory, finished goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.

Logistics

In 1996, the Shipbuilding output was _______ 2007's output of 9%. Greater Than Lower Than Equal To Half of

Lower Than

The Ton mile is the tonnage of cargo _____________ the average haul. Multiplied By Divided By Double Half

Multiplied by

The four groups of commodities ships by sea are:

Other Cargoes (28%), Metal industry Trade (18%), Energy Trade (44%), Agricultural Trade (9%)

________________ is the inbound flow of material to the production process.

Physical Supply and Materials Management

When considering the trade of a country, the next factor to consider is its _________________.

Physical size

The _______________ elasticity shows, how demand responds to a change in prices.

Price

What are the Stages in a typical Shipping cycle?

Recovery, Collapse, Tough, Peak

Which one of these is not a factor that determines the value of a ship at a point of time? Age Freight Rates Inflation Ship Owner's Cash Flow

Ship Owner's Cash Flow

Which of the following is not a variable of Demand in the Shipping Market Model? World Economy Transport Costs Random Shocks Shipbuilding Production

Shipbuilding Production

_____________________ falls into three parts: the Caribbean and Central America, East Coast South America, and West Coast South America.

South America's Seaborne Trade

___________________ is a great piece of engineering which shortens the voyage between the oceans. The canal is 100 miles long and transit takes 13-15 hours. Tolls are charged in US $.

Suez Canal

The required freight rate analysis focuses exclusively on ____________ side of equation.

The cost

Ship productivity is determined by ______________ the vessel actually does in 24 hours, number of days it spends loaded at sea in ____________ and the extent to which it travels with a full deadweight of cargo.

The distance, a year

What is the purpose of drawing a Memorandum of agreement?

To set out the terms on which the sale will take place.

The two aspects to change in demand for sea transport are ________________ and Business cycle.

Trade development cycle

A liner service is a fleet of ships, with a common ownership or management, which provide a fixed service, at regular intervals, between named ports and offer transport to any goods in the catchment area served by those ports and ready for transit by their sailing dates, true or false?

True

Containerization started in the far East trade in December 1968 when Sea-land introduced the container service from Seattle to Yokohama, true or false?

True

Dead weight tonnage is the weight (in tons) of all the cargo, fuel, dry provisions, supplies, etc. carried on board the ship. T/F?

True

EBITDA measures the 'cash in hand' generated by the business during a period of time and is calculated by deducting out-of-pocket expenses from revenue. Is this statement true or false?

True

General Cargo accounts for about 60% of the value of goods shopped by sea, true or false?

True

Globalization is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Is this statement true or false?

True

Income statement is how much profit (net revenue) the company made during the accounting period. Is this statement true or false?

True

Maritime transport is the most cost-effective way to move in masse goods and raw materials around the world. T/F?

True

On 26 April 1956, the Ideal-X, the first modern seaborne containership, loaded 58 containers in New Jersey and sailed for Houston, true or false?

True

Port to port service, short-sea ships are smaller than deep-sea ships. T/F?

True

Supply chain management integrates supply and demand management within and across companies. Is this statement true or false?

True

The North Atlantic was the first route containerized in the mid-1960s, true or false?

True

The US domestic container size is 53 feet and 48 feet. Is this statement true or false?

True

The capital expenditure is covered by the depreciation item. Is this statement true or false?

True

The cash earned in the freight market is the primary motivating force for other activities. Is this statement true or false?

True

The commodity trade supply-demand model is consists of a demand function for the commodity, showing the relationship between demand and price, and a supply function, showing how supply responds to price changes. T/F?

True

The deep sea containerization system already existed in the USA by the mid-1960s, true or false?

True

The demand for transport is a derived demand. Is this statement true or false?

True

The four sections of a voyage cashflow analysis table are: ship information, voyage information, voyage earnings and voyage cashflow. Is this statement true or false?

True

The increase of trade barriers makes it harder and expensive for U.S. companies to export their products and services to trading partner markets. Is this statement true or false?

True

The maritime logistical model are the oceans and seas where merchant ships operate. Is this statement true or false?

True

The most important way of reducing the price of sea transport is economies of scale. Is this statement true or false?

True

The number of containers lifted increased from 14.4 million TEU to 466 million TEUat Figure 13.2 and the average growth rate between 1990 and 2007 was 10.4% per annum, true or false?

True

The primary risk takers are the ship owners and Cargo owners (shippers). T/F?

True

The vital components to develop Container transport system are container-ship, container terminal and standard container, true or false?

True

Three major components for liner business are standard unit (unit load system), integrated transport system, cargo- handling facilities, true or false?

True

Three trade routes groups divided by liner industry are East-West trades, North-south trades and Inter-regional, true or false?

True

Three zones in the international transport system are inter-regional, short-sea and Land. T/F?

True

To estimate the market value of a ship, merchants revise ship type, ship size, age, yard of build and specifications. Is this statement true or false?

True

Tramp shipping is a spot voyage to carry bulk cargoes such as coal and grain. T/F?

True

The four methods of cashflow analysis that are widely used in the shipping industry are:

VCF, ACF, Freight rate analysis, DCF

Relationship between ______________________________ is an equally important part of the logistics problem facing the sea transport business.

ship size, unit transport costs, and transport volumes

The US Central area and East Coast are served by two major waterways:

the Great Lakes and the Mississippi-Missouri

A Bare boat charter agreement is when

the ship owner pays the capital costs alone, charter pays the rest.

Principal U.S. exports to Mexico and Canada in 2010 were:

vehicles, electrical machinery, machinery, plastics, and mineral fuel/oil