Purpose: In the shipping industry, both sales and purchases of second-hand ships and freight transport services are prevalently tailor-made and traded with intense bilateral negotiations. Price bargaining is the key step of this negotiation process and plays a crucial role in determining mutually agreed prices. Despite its cruciality and applicability, the price bargaining has yet received due conceptual and/or theoretical attention in the shipping literature. This paper attempts to conceptually examine the role of bargaining in shipping transaction prices and subsequently puts forward directions for future research. In doing so, the paper focuses on two types of transactions taking place in shipping markets: asset market trading of second-hand vessels and service market trading shipping freights.
Design/methodology/approach: The paper begins with a systematic literature review of price bargaining in the field of economics and management disciplines from a game-theoretic perspective. This approach does logically lead to the establishment of a conceptual framework for price bargaining in shipping sub-markets as a step toward having taken into consideration a variety of heterogeneities commonly present in trading activities and market dynamics.
Findings: A set of research areas has been consequently identified where price bargaining and mechanisms for the shipping freight and asset markets could be further explored and analyzed in a way to make better pricing decisions under a more tangible framework.
Research limitations/implications: One of the critical challenges when using bargaining mechanisms to make a decision on pricing shipping services and assets is how to operationalize the study for empirical investigation as some of the factors are internal information of the players and are not adequately revealed to externals: that is, an imperfect information sharing case. The current study aims, however, not to conduct an empirical analysis but to initiate a conversation among maritime economists by bringing their attention to this not-yet fully explored and potentially impactful field of research and by asking them to treat bargaining from a perspective for pricing shipping assets and services. It is claimed that, by doing so, one could better understand price differences between individual contracts.
Originality/value: This study would be considered the first in its kind to provide a detailed survey of the bargaining theory and models from a game theoretical perspective as a theoretical lens to understand its importance and relevance in pricing shipping assets and services. It also provides a simplified operational case on utilizing bargaining in practically pricing freight services.
The current offshore oil & gas multi-phase production and transportation installations have big challenges related to the slugging flow: An unstable multi-phase flow regime where the flow rates, pressures and temperatures oscillate in the considered processes. Slug can be caused by different operating conditions and installation structures. The most severe slugs are often induced in long vertical risers or production wells, where liquid blocks gas at the riser/well base and correspondingly it causes the pressure to accumulate and hence originates the oscillating performance. There are many severe consequences to the production processes because of the slugging flow. This paper reviews some observed latest status and key challenges about slug detection, dynamical modeling and elimination of slugging flows. Mathematical modeling of slug has been used to investigate the slug mechanism and anti-slug control. Most of available models are based on mass-balance formulations, which often require sufficient data for reliable parameter tuning/identification. Slug elimination and control have been investigated for many years and there exist many solutions to eliminate the slug, but some of these methods can simultaneously reduce the oil & gas production, which is a very big concern as the production rate is the key evaluation parameter for offshore production. We conclude that the slugging flow is a well-defined phenomenon, even though this subject has been extensively investigated in the past decades, the cost-effective and optimal slug modeling and control are still open topics with many related challenges.
The port industry is in a state of flux which is affecting the roles of port authorities. Applying a business model perspective to explore this qualitative shift in competition, this paper argues that port authorities are increasingly managing multiple multilateral business models. This is analyzed through an integrative review of port research which identifies four challenges for port authorities: 1) diversification of port customers; 2) requirements for new value creation; 3) changing possibilities and constraints of value capture; and 4) network effects, clusters and strategic partnerships. The review contributes to literature by exploring how managing port authority business model innovation requires changing the underlying business logic, the activities and resources and the configurational fit with other port actors' business models. This proposition is based on the interplay between the macro level port industry, the meso level rule structures within port systems and the micro level of port authority organisations.
In this paper we extend the state-of-the-art stochastic programming models for the Maritime Fleet Renewal Problem (MFRP) to explicitly limit the risk of insolvency due to negative cash flows when making maritime shipping investments. This is achieved by modeling the payment of ships in a number of periodical installments rather than in a lump sum paid upfront, representing more closely the actual cash flows for a shipping company. Based on this, we propose two alternative risk control measures, where the first imposes that the cash flow in each time period is always higher than a desired threshold, while the second limits the Conditional Value-at-Risk. We test the two models on realistic test instances based on data from a shipping company. The computational study demonstrates how the two models can be used to assess the trade-offs between risk of insolvency and expected profits in the MFRP.
Autonomous marine surface vehicles rely on computer systems with computer intelligence making decisions to assist or replace the navigating officer. A fundamental requirement for the design and implementation of such a cyber-physical system is seamless, predictable, and secure interoperability between vendor-specific hardware and software subsystems. The article describes a system design that includes mechanisms to mitigate the risks and consequences of software defects, individual component malfunction, and harmful cyber interference. It addresses international regulations in the field and demonstrates a system design that can meet the requirements for safe behaviour in foreseeable events while also having the ability to call for human assistance if the autonomous system is unable to handle a situation. The paper presents a design for highly automated vessels with several inherent risk-reducing features, including the ability to isolate and encapsulate abnormal behaviours, built-in features to support resilience to unexpected events, and mechanisms for internal defence against cyber-attacks. The article shows how this is provided by a novel middleware that supports risk mitigation, dependability, and resilience.
The stability formula for rock slopes under wave attack was revised in Van der Meer (2021), replacing the mean period Tm with the spectral period Tm-1.0. This rewritten formula closely resembles the Modified Van der Meer formula as in the Rock Manual (2007), with differences primarily in coefficients and the use of H2% in the Rock Manual and H1/3 in Van der Meer (2021).
The wave characteristics change significantly in shallow water due to nonlinearities and wave breaking. The result is a significant change in the wave height and period, especially when severe breaking occurs and infragravity waves become significant or even dominate the spectrum. This may lead to very large breaker parameters. At a certain point, existing stability formulas may thus become inaccurate, both the original and the Modified formula for shallow water. The primary objective of this paper is to identify when and where shallow water stability results deviate from established formulas and how these deviations can be described.
The analysis involves an in-depth examination of datasets from Van Gent et al. (2003), Eldrup (2019), and other relevant data to increase the understanding of waves in shallow water and how they affect rock slope stability.
The use of H2% in the Modified Van der Meer formula gives some difficulties as no reliable prediction method is available for that parameter when the relative depth is small, h/Hm0 depth < 1.5. The Van der Meer (2021) formula applies the significant wave height, and it may be chosen as either Hm0 or H1/3. These two parameters are almost identical in deep water for which the formula was derived, but significant differences may occur in shallow water. The application of the Van der Meer formula in shallow water indicates a preference for the use of Hm0 as it describes nonlinear waves better. The main conclusion is that the Van der Meer (2021) formula seems valid much further into the shallow water region than what the Rock Manual (2007) recommends and at least to relative water depths of h/Hm0 deep > 1.5. For shallow water with h/Hm0 depth < 1.5 no systematic trend with the energy period is observed anymore and constant combined stability numbers are given for guidance in preliminary design.
ABSTRACT: Climate change provides for improved conditions for maritime navigation and results in increased activity in the Arctic. Those increased activities influence the safety at sea and risk of accidents. A disaster as the Costa Concordia incident would have far more serious consequences in Greenlandic waters than it had in Italy, therefore the question of prevention and disaster-preparedness is crucial. One approach to avoid risks is to create specific legislation. The legal system guiding safe navigation of cruise ships in/around Greenlandic waters is complex: the legal regime for navigation is set in different general and specific international, regional and national legal acts, partly non-binding, therefore issues of effectiveness arise. Safety is also influenced by practical issues, e.g. the lack of sufficient nautical charts for Greenlandic waters and “preparedness” at land to handle potential disasters, such as the SAR-system and preparedness of different actors, for example hospitals.
The regulation of private activities that take place overseas has received significant attention in the legal scholarship. The traditional discussion of the topic observes such regulation from the perspectives of public international law principles of jurisdiction or private international law conflict of laws rules. The present article contributes to the discussion from the perspective of private parties engaged in shipping activities, who face an increasing need of compliance with different regulatory acts of extraterritorial application. It argues that the proliferation of such acts incentivizes private parties to include regulatory interests in their business activities.
The article further suggests that extraterritorial regulation can serve as a trigger for transfer and intrinsic adoption of state’s regulatory interest by private parties. It observes the examples of such ‘privatization of extraterritoriality’ in corporate compliance policies and contractual CSR clauses used by shipping companies, noting their spillover effects over other parties. It further notes that the proliferation of extraterritorial regulation sometimes results in the universalization of responses from private parties, as acquisition of regulatory interest untied from its nation-state origins. The concluding section puts the observed phenomenon into a broader picture, discussing the contribution of extraterritorial regulation to the mechanisms of private governance.
The rapid growth of e-commerce applications has promoted the establishment of shipping e-commerce channels by many liner companies in addition to their existing traditional Non-vessel operating common carrier (NVOCC) channel. Unlike NVOCC channels, shipping e-commerce channels guarantee shippers the availability of contracted container slots. However, some problems arise, including the competition with NVOCC channels, shipping slot sales’ risk, and the increasing liner companies’ costs. Therefore, this paper addresses optimal sales strategy selection in the liner transportation industry, including a single traditional NVOCC channel (TN) strategy, and a dual channel with both e-commerce and NVOCC channels (EN) strategy. Two contract scheme models are constructed considering the channel competition on canvassing ability, overselling behavior, demand fluctuation, and the limited liner vessel capacity. Findings show that the impact of overselling behavior on the profit under the EN and TN is not always negative, which is related to the shipping capacity and probability of the high canvassing ability. Comparative analyses reveal that the EN is dominant if the unit overselling compensation cost varies small. Meanwhile, the TN is profitable if the unit overselling compensation cost increases and the canvassing cost of e-commerce channel exceeds a certain value. Otherwise, the selection of sales strategy relies on the arrival rate, the canvassing cost of the e-commerce channel and shipping capacity. The results offer new insights to both theoretical research on container slot sales and the practical selection of sales strategy since shipping e-commerce has changed the slot selling mode in the container shipping industry, which could also enhance the competitiveness of liner companies in the container shipping industry.
We contribute to theorizing global human resource strategy by analyzing the mobility of workers laid off due to the failure of a MNC employer. The job opportunities of laid-off workers are affected by their industry legitimacy. Focusing on scarce specialized workers, we propose that prospective MNC employers share an interest in retaining such workers' legitimacy. However, in the light of organizational failure, they may suffer from cross-border legitimacy loss conditioned by their former employer's MNC structure—specifically, their former organizational units or geographical locations. We present an illustrative case study of traders laid off by a spectacular bankruptcy in the global bunker industry. This inspires a discussion of how MNC top management can manipulate worker legitimacy following an organizational failure. Managerial Summary: Strategic hiring of globally mobile scarce specialized workers is central to global human resource strategy. We analyze what drives the legitimacy and mobility of such workers after being laid off by a bankruptcy of their former employer. We demonstrate that laid off workers experience comparatively high legitimacy loss when they were previously assigned to an MNC organizational unit or geographical location where other workers were suspected of being responsible for failure. This weakens their bargaining position vis-a-vis a prospective employer. We present an illustrative case study of traders laid off by a spectacular bankruptcy in the global bunker oil industry.