Feature of the Month : Global Shipping

In the modern global economy we live in, shipping goods between countries is an integral business function. Although many transportation methods are used, 90% of global trade is conducted by sea. Shipping companies are currently being crunched because of the low rates being demanded by their ships. These low prices were caused by the recent economic boom and subsequent bust that caused companies to order new ships just as demand peaked.  The low rates have also caused ship values to come down severely and many management teams have considered the possibility of scrapping ships instead of continuing to run them. The shipping industry has historically been very cyclical and many experts agree that the bottom of this economic cycle is nearing.

With so many interlacing global trends, experts can look at the shipping industry and have very different outlooks on when the industry will enter its next growth phase. This is exemplified by the differing views of two billionaires - American Wilbur Ross and Norwegian John Fredriksen (both worth around $10 billion USD). Ross, who specializes in buying distressed assets, has invested $300 million in a firm planning to buy 30 ships designed for refined products. His firm focuses its purchases on ships with charters in place for the next four years as a way to protect against a downturn in the economy. John Fredriksen is a Norwegian business owner with stakes primarily in off-shore oil drillers and global shipping companies. He believes that many more companies will have to capitulate and either sell their ships at fire sale prices or scrap them before the market bottoms. Fredriksen plans to use these rock-bottom prices to conduct opportunistic buying and expand his business while it is inexpensive to do so.

From the globalEDGE Blog

Along with shrinking profitability, shipping companies must also deal with the ongoing threat of piracy. Pirates have found hijacking ships and demanding ransoms to be a very lucrative endeavor and companies are now looking at new ways to protect their employees and cargo. To learn more about these tactics visit the globalEDGE Blog!

Featured Academy

Multinational Logistics
The Multinational Logistics module provides information on the circumstances dealing with the following: what logistics and supply chain are and how they differ domestically and internationally; the types of issues that are involved with international transportation; international inventory matters; warehousing and product storage topics and how international logistics augments these; and the management issues that multinational logistics creates.
Category: Logistics

Regionalization and Trading Blocs
The Regionalization and Trading Blocs module provides one with information on: what globalization means, its impact on business, and the forces that are driving it; the advantages and disadvantages of globalization, as well as who is in favor of globalization and who opposes the movement; what the World Trade Organization (WTO) and the General Agreement on Tariffs and Trade (GATT) are, how they work, and what their history is; the history and purpose of some of the world's largest and most influential Regional Agreements: NAFTA, MERCOSUR, ASEAN, and the EU; and the basic premises of the Free Trade Area of the Americas (FTAA) that is currently under negotiation in North, South, and Latin America. A case study on Quebec’s language laws is also provided.
Category: Institutions and Trade

globalEDGE Business Review

"The Health and Economic Effects of Counterfeit Pharmaceuticals in Africa"
by Jeremy M. Wilson and Roy Fenoff (Volume 5, Number 6, pp. 1-2, 2011)

Pharmaceutical Counterfeiting in Africa remains a serious threat to quality health care and the African economy. An impairment to public health, counterfeit pharmaceuticals used to combat malaria and tuberculosis have been blamed for up to 700,000 deaths in Africa each year. They reduce the sales of legitimate drugs, reduce tax revenue, deter innovation and growth, discourage foreign investment, and require significant resources to combat them. Without empirical data on the different dimensions of the effects, the sheer magnitude of the problem is currently unknown because the estimates are not very reliable. Greater information on the problem is needed for developing evidence-based policy and decision making.

Featured Resources

International Maritime Organization (IMO)
The International Maritime Organization (IMO) is responsible for improving maritime safety and preventing pollution from ships. The site contains a vast amount of resources on maritime matters, such as current news and informative documents. IMO was established by the United Nations and is currently based in the United Kingdom.
Category: Logistics

Marine Link: World Maritime News
Marine Link is a frequently updated logistics news site including articles on maritime transport from all over the world. Site also offers subscription to Maritime News or Maritime Reporter, but subscription is not necessary to access the content.
Category: Logistics