Stopford, M. 2009, Maritime Economics, 3rd edn, Routledge, London, Chapter 5, refers to the four shipping markets, namely the new-building market, the freight market, the second-hand ship market and the ship demolition market. Explain how these four markets interact and illustrate your answer with discussion of the effects of the Global Financial Crisis 2008 on the four markets. Note: Copy and paste of the contents from the above textbook are not enough for your answer. Your answer should include an analysis of the interactions between the four markets and refer to the effects of the GFC 2008 on the four markets.

1. Maritime Economics Assignment
Questions Based on Global Financial Crisis 2008-Economic Cost of Supply Chain-Forms of
Cooperative Agreements in Liner Shipping
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Abstract
The consolidation of third of services along the supply chains that is services such as
transportation, storage, and various other have led to the creation of third party logistics.
Third party logistics refers to the process of integrated intra firm logistical services covering
areas of transportation, to warehousing and also distribution delivered at consumers’ desire.
SPLs offer a certain competitive advantage that is the value added aspect of the supply chain,
which is very important in the eye of the consumer (Harrigan, 1985). The company could
reduce cost along stages of the supply chain such as transportation cost could be saved when
the company is to the supply source (Rodrigue, 2010). There is also the benefit of risk
sharing, market control and coverage (Rodrigue, 2010). With the larger market the consumer
network could be expanded quickly.
Economies of scales, is another competitive advantage that liner shipping industry would
experience. Economies of scale results when an extra unit product results in a decrease in
average cost. The major factor responsible for economies of scale is that the total cost which
is comprised of two factors the variable cost and the fixed cost would increase at a decreasing
rate as more number of units are produced and transported. This is because initially both cost
increase, but after a point of time the fixed cost is constant it is the variable cost that increases
with output. Hence, we have economies of scale because of the decrease in total cost when a
large number of goods are produced (Krugman, 1980). Customers also prefer buying more
services from a single service provider, thus services such as cargo handling and delivery or
storage services could be obtained from the service provider. Vertical consolidation improves
the logistic chain and also creates value added services.