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A Study on Customary Practices in Iron Ore and Steel Product Shipping Contract - Case of Long-term Shipping Contracts in Korea

  • Kim, Hyungjun (Graduate School of Maritime Finance, Korea Maritime and Ocean University) ;
  • Kim, Jae-bong (Division of International Trade and Economics, Korea Maritime and Ocean University) ;
  • Oh, Yong-sik (Division of International Trade and Economics, Korea Maritime and Ocean University)
  • 투고 : 2020.04.13
  • 심사 : 2020.04.24
  • 발행 : 2020.04.30

초록

Long-term shipping contracts represent the cooperative and coexisting relationships between the shipping and steel industries. Yet, differences between the contract forms for iron ore and steel products have emerged. Specifically, the large proportion of consecutive voyage charters (CVC) is being applied in the iron ore trade, whereas the contract of affreightment (COA) is proportionally higher for shipping steel products. The literature review and in-depth interviews in this study identified through the research model, the characteristics of the shipping and market structure in both markets have significantly contributed to the preference of different long-term contracts. It has been determined that the mutual oligopoly market structure and the characteristics of shipping such as, the small number of suitable vessels in the market, the single fixed load/discharge ports, the long-distance voyages, and the potential risks for fatal accidents because of cargo liquefaction, for the iron ore trade, provide higher contribution to the preference of CVC contracts. In contrast, the consignor oligopoly market structure and the shipping characteristics, such as the greater number of suitable vessels available in the market, the variation in ports, the cargo quantity per shipment, the various load/discharge ports, and the need for experienced carriers for steel product loading in the steel product trade has shown higher preference on the COA contracts as the consignors with superiority over the shipowners, resulting in favorable contract types and conditions for the consignors.

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참고문헌

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