Application of probability theory to marne project appraisal

The importance of specifying and quantifying the project risks in the investment decision process cannot be overemphasized. Even more so in the context of marine project appraisal, since the shiping markets are characterized by extreme volatility and high cyclicality. The use of probability theory in investment decisions is reviewed and applications are derived for marine projects. The paper focuses on the use of Monte Carlo simulation to determine the mean and variance of the input variables. Within the Monte Carlo framework three alternative methods are used for the construction of probability distributions; the scaled halves of a normal distribution, two unscaled parts of a normal distribution and finally use of altenative distributions, such as beta, gamma and chi-square. An alternative methodology is also drawn from the literature, namely the Pearson-Turkey three point approximation, to contrast with the Monte Carlo method.     

Service contracts: a case study of unfulfilled promises

The US Shipping Act of 1984 permits ocean liner vessel operators and shippers to make use of service contracts to further their mutual interests. However, starting from the very day this novel provision was incorporated into the Act, it has remained as a bone of contention between shippers and carriers serving US trade routes. This article highlights the major issues that have sprouted subsequent to the introduction of service contracts in ocean liner shipping. The author concludes with some logical suggestions to fine-tune the Act, without interfering with its legislative framework.     

Notes on the internationalization process in the maritime sector

In this paper the author traces the evolution of state subsidization of national shipping enterprises, and analyses the processes whereby such enterprises are dependent (to an increasing extent as time passes) on international factors.     

Impact of interviewing by proxy in travel survey conducted by telephone

Telephone‐interview surveys are a very efficient way of conducting large‐scale travel surveys. Recent advancements in computer technology have made it possible to improve upon the quality of data collected by telephone surveys through computerization of the entire sample‐control process, and through the direct recording of the collected data into a computer. Notwithstanding these technological advancements, potential sources of bias still exist, including the reliance on an adult member of the household to report the travel information of other household members. Travel data collected in a recent telephone interview survey in the Toronto region is used to examine this issue. The statistical tool used in the research was the Analysis of Variance (ANOVA) technique as implemented within the general linear model framework in SAS. The study‐results indicate that reliance on informants to provide travel information for non‐informant members of their respective households led to the underreporting of some categories of trips. These underreported trip categories were primarily segments of home‐based discretionary trips, and non home‐based trips. Since these latter two categories of trips are made primarily outside the morning peak period, estimated factors to adjust for their underreporting were time‐period sensitive. Further, the number of vehicles available to the household, gender, and driver license status respectively were also found to be strongly associated with the underreporting of trips and thus were important considerations in the determination of adjustment factors. Work and school trips were found not to be underreported, a not surprising result giving the almost daily repetitiveness of trips made for these purposes and hence the ability of the informant to provide relatively more precise information on them.     

An investigation into the existence of a two-tier spot freight market for crude oil carriers

Developments in environmental legislation have exercised increased pressure on the tanker sector to improve its quality. To date, the most influential and, indisputably, the most controversial piece of legislation against oil pollution is the U.S. Oil Pollution Act that was introduced in 1990. This paper attempts an empirical examination of the effects of these developments in the spot freight market. Using a database of Worldscale fixtures over a period of four and a half years, a series of statistical tests was performed with the aim of detecting the existence of any premium paid for vessels of lower age, double hull construction, or trading to the U.S.A. The results were mixed, indicating in several cases some form of premia for US.-bound vessels, but less evidence of premia for lower age and better hull construction.     

Simulation of fixed route bus travel time

Travel time on fixed route urban bus route is discussed. Given that the travel time is a function of three basic variables, Monte Carlo procedure is used to simulate trips during a specific time interval. Each variable is assumed to have a specific probability distribution with known or estimatable parameters. It is shown that this micro-computer simulation model can be used for examining the effects of traffic management schemes, number of stops and passenger demand on travel time, and subsequently fleet size and level of service.