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The Maritime Economics Essay - 1375 Words

The Maritime Economics (Essay Sample) Content: UniversityThe Maritime EconomicsByStudents NameDate of SubmissionInstructor The Maritime EconomicsIntroduction Maritime economics is the aggregated study of shipping and port management and the global supply chain management (Haralambides, n. d p.1). The concepts of maritime economics are different in some context as compared to the normal economic approaches, hypotheses, and models among other economic concepts. As such, the concepts under the maritime economics are purely connected to the water transport and not general overviews. Such differentiates the maritime economics from the other normative economics. Theshipping industry is delicate in the dealings and the whole framework of covering the distance over water and ferrying the cargo to the set destination. As such, the impacts of the maritime sector to the economy are essential and enable the different economies to trade for the benefit of global development (Tsolakis, n. d, p.1).Intervention and Monopolies Int ervention is essential in times of crisis and it aids to cool down the situation in trying times such as recession of an economy. Maritime economics gives the clear picture how it intervened during the times of world economic crisis in the 70s and 80s. The oil crisis had hit the economies and as such communication and transport became the tragedy (Stopford, 1997, p. 29). Such are based on the stipulations that at such time the economies had not developed extensively in terms of technology. As such, the modes of transport such as air were very challenging. Similarly, the government intervened the maritime economy during the world war one and two respectively. Such had the negative impact to the development of the maritime economics (Stopford, 1997, p.7). It suggestively communicates that the maritime economics was based on the free hand market structure where things were done in the competitive and monopolistic manner. The intervention of the governments through government subsidies did nothing such as reduction of prices as it is the case of normal economics. It mostly resulted in the creation of job securities. For example, during the times of economic crisis and world war when most people could have been fired due to lack of service delivery in the proportionate way, the government subsidies helped create job security. The presence of the ports in few countries during the rival and origin of the maritime economics communicates a lot that is evident even if it remains untold. The few ports would at first dictate the prices of ferrying the cargo based on the rising demands from many economies, for example during the world economic crisis.The supply of the port services and the general procurement procedures was based on the dictated prices from the monopolistic ports. However, as the economies developed and adopted technology, it is very evident today that most ports and ships operate on the competitive basis and no firm is the price setter. Such is distingu ishable from the normal economy in the grounds that the normal economy has static markets. If they are monopolistic, for example, they remain monopolistic forever. On the other hand, the political intervention in the maritime economy during its development and during the times of recession was as the result of maintaining the job opportunities during the times of economic crisis (Stopford, 1997, p.135). Demand for port services yields the foundation of expounding the shipping industry into two categories. Such categories are the bulk shipping industry and the linear shipping industry. The former transported the large cargo while the latter was meant to transport for small cargo that could not be ferried singly in one ship (Stopford, 1997, p.27-28). Based on the two broad categories, therefore, shipping becomes the form of business activity as the service business. Price, security, speed, and reliably are some of the factors that affected the demand for the ship (Stopford, 1997, p.34 ). The Check on the Shipping CycleThe shipping cycle is similar to the normal business cycle given that the shipping process is also the service business. It begins from the trough, progresses to the recovery, then to the plateau (on top or maximum profits), and finally begins to collapse back to recession. All the stages affect demand and supply. At the recovery and plateau the demand and supply increase steadily until they become optimal. Comparably, at the collapse and trough both demand and supply decrease steadily until they are stagnant (Stopford, 1997, p.43). Similarly, supply relies on the price, and the demands of the shipping services to the economies. Derivation of Demand in the Maritime EconomicsDerived demand comes as the response to the rising individual needs for the shipping services. As such, due to the rising demands for many economies, more so those not bordering the seas, the formation of large shipping companies have been made. Such it is meant to meet the risin g needs and ensure service delivery to the clients. As such maritime economics is emerging as the suitable economics to be understood well. The maritime economics is faced with the major challenge of controlling the pollution of waters and risking of marine lives (Pugh, 2008, p. 26).Ideally, demand is derived based on the price of the supplied goods and services. Consumers are sensitive to the price variations. As the price for the goods and services increase, the demand of such goods declines. It is assumed that such goods are normal goods and they are not public goods. The derivation of demand in the maritime economics can be illustrated as well.Price Demand for shipping (economies)$ 25000100$20000150$15000210 As the price of supplying the diversified forms of goods declines from $25000, to $20000, and finally to $15000, the demand for transportation of goods increases. The increase comes in the more than proportionate value. Such analysis holds when the other factors of transportation such as security and pollution are kept in check. Security of the Transported Produce in the Maritime Economics Security is paramount in the production process and for any business to grow. The IMO has the responsibility of ensuring the ship is safe during the shipping process. It also regulates pollution and deals with security matters. It forms the laws that are the enforced by the maritime states such as Australia (Stopford, 2009, p.656). Security is priced in the total cost of transportation that the individual economies incur in transporting the cargo. Accidents are another challenge in the maritime economics. The accidents involving the ships are fatal and a lot has to be done to improve the situation and ensure the cargo and individuals in the ships sail through the waters safely (The Guardian, 2014 no page). The Analysis and Derivation of Demand Demand is derived from the ability of the maritime economies to acquire some goods to be shipped to their ports. Due to such demand, many goods from diversified sectors such as agriculture and industries are desired and have to be acquired through shipping. The basic and mainly transported goods include petroleum, coal, and grains. Containerisation is done before the goods are shipped to ensure safety of the goods and that to cover well the perishable goods (Rodrigue Browne, n. d p.6-7). As such needs for good shipping arises, the supply chain logistics are increasingly becoming essential in the maritime economics. Logistics need to be performed in order to curb erroneous acts in the process. As such, shipping lines have act on their own by investing in the terminal facilities and safety access to the hinterlands (Panayides, 2006, pp. 4-5). The Indivisibility Concept in Maritime Economics Hassner 2003 explains on the issues of indivisibility and conflict on the sacred space. The origin of such conflict include, religious groups changing to become rivals, the retaining of such grounds for poli tical use, the layering of such grounds by conquest, and the rivalry with secular groups seeking to make such grounds serve non-sacred purposes. To Hassner, the grounds are deemed indivisible if the goods under such grounds will be spoiled if...

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