Causes and effects of FDI by the Norwegian maritime industry

A theory of replacement in the context of ocean going vessels is discussed. The approach is based upon costs rather than profits, and while there appear to be many difficulties in applying replacement theory to ships it is shown that there are some segments where the theory can still usefully be applied. The effect on replacement resulting from varying important cost parameters is shown and it is found that while fiscal measures have very little effect, capital cost and operating cost profiles have the most important influence. It is concluded that shipowners need to keep themselves fully informed of changes in cost and improvements in technology that may indicate replacement of a vessel somewhat sooner than normal replacement age.     

Is there potential for a two-tier tanker market?

The simulations performed show that demand for quality tankers has to increase by 30% for a two-tier tanker market to emerge. The two-tier freight structure will only last for 3-5 years due to contracting induced by higher freight rates. This means that OPA does not by itself result in higher freight rates for tankers that comply with the requirements. If Western Europe also closes their trades to substandard tankers, a two-tier market emerges and quality tankers obtain a premium. The paper presents a simulation model for international tanker markets. The non-linear complementary equilibrium model solves for a sequence of static equilibria in segmented tanker freight markets, shipbuilding and scrapping markets. Freight markets are segmented according to quality requirements for tankers. The model specifies three tanker classes and one quality tankers can operate both market segments.     

Market efficiency in the bulk freight market revisited

Given that the freight rate is the price of a transportation service that cannot be traded or stored; the traditional form of the efficient market hypothesis (EMH) does not apply to the freight rate price process. However, the notion of market efficiency still applies in the freight market. In particular, under the hypothesis that the market is semi-strong-form efficient, it should not be possible to make excess profit by taking chartering positions in the freight market based on public information such as past levels of the spot freight rate or the shape of the term structure of freight rates. This paper contributes to the literature by proposing an alternative test of market efficiency in the bulk freight market. We utilize technical analysis based on the history of spot freight rates and investigate the profitability of such chartering strategies for a tanker operator. The chartering decisions are based on identification of the peaks and troughs in the freight market cycles using kernel smoothing of the spot freight rate history. The empirical results suggest that a large tanker operator (e.g. a pool) could have achieved significant profits without investing in ships by trading on such information, although this does not hold in the most recent subset of the sample.     

Large-eddy simulation of cross-flow around ship sections

The present work is motivated by phenomena occurring in the flow field around ship-like bodies with an incoming lateral flow (cross-flow, 90 ° drift angle). Three-dimensional unsteady flows around different ship sections are investigated by using computational fluid dynamic (CFD) tools with large-eddy simulation (LES) subgrid-scale turbulence model. The simulation results are compared to measurements at several Reynolds numbers in the 90–200,000 range. Focus in our investigation is on the characterization of the motion of vortex structures generated by the separated flow. Another target in the study is to obtain better knowledge of the hydrodynamic forces acting on the sections. Computed pressure and drag coefficients are compared with experimental measurements. The comparison between simulations and measurements shows that an LES model can predict the flow field around ship sections in detail and the hydrodynamic forces acting on the sections.     

Numerical simulation of flow around a smooth circular cylinder at very high Reynolds numbers

High Reynolds number flows (Re = 1 × 10⁶, 2 × 10⁶ and 3.6 × 10⁶, based on the free stream velocity and cylinder diameter) covering the supercritical to upper-transition flow regimes around a two-dimensional (2D) smooth circular cylinder, have been investigated numerically using 2D Unsteady Reynolds-Averaged Navier–Stokes (URANS) equations with a standard high Reynolds number k ? ? turbulence model. The objective of the present study is to evaluate whether the model is applicable for engineering design within these flow regimes. The results are compared with published experimental data and numerical results. Although the k ? ? model is known to yield less accurate predictions of flows with strong anisotropic turbulence, satisfactory results for engineering design purposes are obtained for high Reynolds number flows around a smooth circular cylinder in the supercritical and upper-transition flow regimes, i.e. Re > 10⁶. This is based on the comparison with published experimental data and numerical results.     

Are AIS-based trade volume estimates reliable? The case of crude oil exports

Most global trade statistics in the public domain refer to official customs data, which are not generally available on a micro (individual cargo) level. With the increasing availability and completeness of ship positioning data from the global Automated Identification System (AIS), it is possible to derive more timely and detailed trade statistics for homogeneous commodity groups. The objective of this article is twofold: (1) to compare the accuracy of AIS-derived trade statistics to official customs data in the crude oil market and (2) to add a breakdown of trade by vessel size over time. We find that while AIS-derived data for seaborne crude exports show good alignment with official export numbers in aggregate, there are substantial temporal and geographical differences across countries and time due to the use of pipelines and transshipment in parts of the supply chain. We highlight the challenges in properly structuring and aggregating micro-level cargo data. Our findings are important for the proper derivation of shipping demand from trade data.     

Norwegian port connectivity and its policy implications

The importance of a seaport depends on how well it is connected in a transportation network. A port’s connectivity is therefore one of the key issues in determining its competitiveness and developments in regions and countries. We construct a port connectivity index for major Norwegian ports based on a unique dataset derived from the automated identification system (AIS) for multiple vessel types over a 7-year period. Port connectivity is evaluated empirically by the number of unique vessel visits, vessel sizes, and cargo sizes. The research has implications for port authorities and policy makers in the areas of port planning, infrastructure investment, short sea shipping promotion, and environmental policies. The contributions of this research are twofold. First, the methodology linking the AIS vessel-tracking system with port connectivity is a pioneering empirical application of maritime big data. Second, the port connectivity index is constructed for multiple vessel types and regional port groups, which is an improvement from the current literature where conceptual measures are constructed based on hypothetical and usually too simple optimization rules. The methodology can be easily expanded to other regions in the world.     

Causes and effects of FDI by the Norwegian maritime industry

This paper analyses foreign direct investments (FDI) in Asia by the Norwegian maritime industry. It focuses on three topics: (1) Why do Norwegian maritime companies invest abroad? (2) What are the effects of maritime foreign direct investments on the Norwegian maritime milieu? (3) What are the effects of these investments on the host country? By analysing specific Norwegian maritime companies, it was found that the FDIs have partly been induced by the instability of the Norwegian policy towards this sector. Several firms also point at the importance of being closer to the Asian market as a significant reason for FDI, and the Norwegian ship equipment industry tends to 'follow' the shipping companies abroad. The domestic effects of FDI are uncertain, and are likely to depend on the motivation behind the investments. Finally, using Singapore as an example, it is argued that the host country effects of FDI tend to be positive.