• Journal of Korea Port Economic Association
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• v.26 no.3
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• pp.42-55
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• 2010

This paper primarily deals with a decision-making for determining the number of voyages in each ship size under a specific port structure in order to minimize the total transport cost consisting of transport cost at sea, queuing cost in port, and inventory cost in yard. As a result of computer simulation using queuing model characterized by inter-arrival time distribution, we were able to find out some combination of voyage numbers of 3 ship-size(50,000-ton, 100,000-ton, and 200,000-ton), where the total transport cost can be minimized under a specific port structure. The simulation model also allows us to figure out any trade-off relationship among sea transport cost, queuing cost in port, and inventory cost in yard. Put it differently, an attempt to reduce the sea transport cost by increasing the number of voyages of the largest ship size, the transport cost incurred in both port and yard is hypothesized to be increased and vice versa. Consequently, Port managers are required to adjust the number of annual number of voyages allocated in each ship size, put into the sea lines for importing raw materials, in order to optimize the transport costs incurred under the specific port system. We may consider a net present value(NPV) model for performing an economic feasibility analysis on port investment project. If a total discounted net benefit, including cost savings, exceeds the initial investment for an additional berth construction, then we accept the port investment project. Otherwise, we reject the proposed port investment plan.

• Journal of Korea Port Economic Association
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• v.34 no.3
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• pp.183-200
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• 2018

This study empirically tests the presence of rational bubbles in the ship prices using time series data from October 1996 to April 2017. To detect the existence of ship prices' rational bubbles, we use integration and cointegration tests, which were proposed by Campbell and Shiller(1987) and Diba and Grossman(1988), for circumventing misspecification of ship price model and applying the bubble test to nonstationary time series. The result of integration test supports existence of tanker price's rational bubble. The co-integration test also shows that drybulk ship and containership prices have been overvalued relative to the market fundamental, drybulk and container freight rates, due to non-stationary rational bubbles. These results provide Korean shipping industry and authorities implications that anticyclical ship investment and long-term and steady fleet capacity expansion policy are needed.

• International Journal of Naval Architecture and Ocean Engineering
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• v.13 no.1
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• pp.352-366
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• 2021

To decrease Europe's harmful emissions, the European Union aims to substantially increase its offshore wind energy capacity. To further develop offshore wind energy, investment in ever-larger construction vessels is necessary. However, this market is characterised by seemingly unpredictable growth of market demand, turbine capacity and distance from shore. Currently it is difficult to deal with such market uncertainty within the ship design process. This research aims to develop a method that is able to deal with market uncertainty in early ship design by increasing knowledge when design freedom is still high. The method uses uncertainty modelling prior to the requirement definition stage by performing global research into the market, and during the concept design stage by iteratively co-evolving the vessel design and business case in parallel. The method consists of three parts; simulating an expected market from data, modelling multiple vessel designs, and an uncertainty model that evaluates the performance of the vessels in the market. The case study into offshore wind foundation installation vessels showed that the method can provide valuable insight into the effect of ship parameters like main dimensions, crane size and ship speed on the performance in an uncertain market. These results were used to create a value robust design, which is capable of handling uncertainty without changes to the vessel. The developed method thus provides a way to deal with market uncertainty in the early ship design process.

• Journal of Korea Port Economic Association
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• v.27 no.2
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• pp.297-311
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• 2011

This paper deals with a strategic investment decision model for improving investment profit in shipping industry. Despite the quantitative expansion of Korean shipping business, many shipping firms have suffered financial difficulties due to financial and operating risks that result from the characteristics of capital-intensive business as well as of volatility of shipping markets. As a result, managers in charge of making an investment decision, particularly in tramper business sector, are required to take both financial and operating risk factors into consideration. Put it differently, managers are strongly recommended to avoid these risks by ship asset play; buy-low and sell-high, which results in considerable capital gain and cost reduction. In addition, managers in shipping industry are also recommended to consider the ship chartering investment alternative when the freight markets show extreme volatility as the case of 2008 triggered by sub-prime mortgage financial crisis in USA. For example, the BDI suffered plunging down from 1000 in 2008 to 100 in 2010. Consequently, the 4th largest shipping company in Korea, DAEHAN Shipping Co., has collapsed primarily due to excessive tonnage expansion during the peak time of bulk market. In sum, the strategic investment decision model, suggested in this paper, is designed to include such factors as capital gain by asset play, timely chartering for alternative shipping service, and optimization of operating profit by tonnage adjustment in accordance with change in the shipping markets concerned.

• Journal of Navigation and Port Research
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• v.44 no.5
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• pp.414-422
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• 2020

In this study, an empirical analysis of 55 ship finance cases executed by a specific ship finance bank from 2009 to 2016 during the recession period was conducted. The purpose of this study was to find the factors affecting changes in the debt performance of Korean shipping companies. The main factors were the loan nature (investment purpose, loan-to-value (LTV), syndicated loans, loan terms, put-option, balloon, and spread), financial nature (total assets turnover, net profit-to-sales ratio, debt ratio, quick ratio, total borrowing, bonds payable to total assets, interest expenses-to-sales ratio, debt service coverage ratio (DSCR), and total assets), and the company nature (company age, chief executive officer's (CEO's) shares, and listing status). In this study, the factors affecting the debt repayment capability of domestic shipping companies (loan nature, financial nature, and company nature) were verified. The credit rating was used to measure the dependent variable, debt repayment ability. The variables of investment purpose, put-option, balloon, and spread in the loan nature, debt ratio in the financial nature, and the CEO's shares and company age in the company nature were found to be significant.

• Journal of the Korean Society of Marine Environment & Safety
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• v.2 no.1
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• pp.137-150
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• 1996

Safety is built in to the activities of the prudent ship operator. Ant investment made towards this end is likely to have a measurable payback in positive terms. That there must be an investment is inevitable, because the industry at large has let things slip too far too long. Those who have not allowed it to slip too far and who are the first to recognize that safety, far from costing money, in the long term actually preserves it, will be wieners. Too many seem to have lost sight of the fact that every one hundred pennies saved is a full one hundred pennies profit. Every hundred pennies of additional revenue contributes no more then fifteen pence to profit. Environmental protection is not so simple, nor so financially attractive. Man needs the minerals of the Earth as well as the products of the soil and sea survive. We(the human race) are still not in the position, politically or financially to manage the Earth's assets without causing damage. The evidence of our damage is evident in many different parts of the Glove and will in some cases haunt several generations still to come. We have learned a lot, and continue to learn, but despite the best intentions some Government needs for their people will be at the expense of people in another region for the foreseeable future. We sailors ply the seas with the raw materials of commerce as well as the finished and part finished goods. It does not always sit well to consider too deeply what effect the ship and the cargo it carries is having, or may have, on some communities, or on the sea through which sail. None my generation can hold up his head and claim to be without blame in the pollution of the seas. Times are changing though, and Governments are turning their attention more to the protection of our planet and its precious resources. This will not be without cost. The investment will have to be made not for our benefit, but for the benefit of generations yet to come, however the cost will have to be borne by society as a whole, not by the shipping community alone. The debate surrounding the choice between engineering our way to a better tomorrow, or adapting our working practices will continue. Each method has the same goal as its target and as long as we attain the goal does it really matter how we get there?

• Journal of Advanced Marine Engineering and Technology
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• v.38 no.9
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• pp.1057-1063
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• 2014

Concerning $CO_2$ reduction from International Societies, lots of laboratories and relevant societies suggest many reports on how to reduce fuel consumption from their specific ways. Undoubtedly, cutting costs is the final desired destination for owner outcome, but many questions there are on the way yet: how is this measure working? how efficient is it? On what size of ship would it work best and be the most effective? etc. Fuel cost is one of the major cost elements for ship owners and/or operators. And by reducing fuel consumption owners and/or operators will reduce both their costs and the environmental impact from their ship. This paper is aim to address how the measures work for saving fuel consumption through improve propulsion efficiency, installation cost and benefit can be calculated easily in the return on investment for estimated one year operation, and finally their compatibility with other fuel saving measure devices.

• Journal of the Korean Society of Manufacturing Process Engineers
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• v.16 no.3
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• pp.146-152
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• 2017

Stabilizing the operation of dual fuel diesel engines is very important. The shipbuilding industry is rapidly growing, but gear components requiring reliability are still imported from other countries. The reasoning for this is three-fold. Firstly, it is compulsory that all ships must use devices that meet the performance standards specified in the Safety of Life at Sea (SOLAS) and the convention of MARine POLlution (MAPOL) to prevent pollution caused by ships. Secondly, most ships must comply with the ship classifications specified by ship owners. Therefore, it is specified that key engine gear components must be inspected and authorized for the quality and performance specified by the Ship Register Authority. Thirdly, it is essential that devices (engine gear) for human safety in ships comply with quality standards specified in the regulations and rules by the government. The Ship Register Authority's strict quality standards and approval requirements contribute to the reduction of motivation towards new investment and technology development by device component manufacturers. Therefore, this study aims to develop a method for using infrared thermography to examine gear reliability in order to ensure gear component reliability and national competitiveness in the global market.

• Journal of Korea Port Economic Association
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• v.21 no.1
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• pp.1-21
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• 2005

It has been more recent trends in container trade to make bogger ship from shipowners that many more parties concerned are getting involved. Well, it is natural to swift these situations if we have looked into container trade market in present time, which a lot of trade volumes has increased in world economy. Thus, supply side of shipping service needs to employ more capacity in the shipping market, then newbuilding may be compulsory options, that is deployment of larger ships. To cope with market situations as able shipowner, some alternatives can be also adopted, such as newbuilding, chartering and securing the space by strategic alliance. But whatever he does, shipowner has to keep in mind to prepare for the future. This is much more important factor considered to make investment decision in case of newbuilding and then he can make more efficient decision as well. However, there has been a little problems arisen due to larger ship employed on the trade route, which is linked with seaport, shipping companies and freight rates as well. Although shipowner decides to build new larger vessel as one of corporate strategic decision, there are many questions to be considered in advance. Therefore, in order to take more efficient decision, shipowner has to take into an account various situations surrounded, and then it can lead truly thoughtful decision making process.

• Journal of Korean Port Research
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• v.11 no.1
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• pp.45-64
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• 1997

Ship's delay caused by port congestion has drawn attention to the necessity for analysis on overall operation in port. But, in order to analyze the complicated port operation which contains large number of variable factors, queueing theory is needed to be adopted, which is applicable to a large scale transportation including ship's arrival in a large port. In this paper, a simulation model for Inchon Port was developed by the software SIMAN V and presented congestion rate under a certain scenario regarding the arrival ship's number and service levels. To develop the simulation model, types of ships and cargoes during the 1995 in Inchon Port was analyzed in advance. The results of the simulation can be summarized as follows : In order to maintain present levels of congestion rate and time with the increasing number of arrival vessels, service rate should be increased at an exponential rate. To improve the current congestion effectively, part of cargoes are needed to be transferred to a newly developing port. Results obtained from simulation can be used properly to prepare improved service levels and to plan appropriate investment strategies.