7 pages. Vertical integration costs (shipping management)

| December 19, 2015

A Belgian chocolate maker, part of bigger multinational food company, is considering purchasing a small vessel to import cocoa from western Africa.
A dry bulk ship will have to make the return trip carrying ballast; a general cargo could carry some of its parent company’s products (but not dairy products, which means it might have to undertake return trips below maximum capacity); a breakbulk reefer would guarantee maximum utilisation of the ship’s capacity.
You are asked to consider the yearly costs (Bunkering, Operational, Insurance, Port etc.) for 3 handysize vessels (dry, general, reefer) operating on the Abidjan-Antwerp route. Most of these costs can be quantified using Drewry’s Ship Operating Costs Annual Review and Forecast, available in the library.
Your report is expected to include an appendix table summarizing the associated costs in a single page for easy comparison, as well as a recommendation based on said cost comparison.

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Category: Economics

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