Paper , Order, or Assignment Requirements

Assessment Task A multinational company headquartered in Japan, is considering purchasing a small vessel to import natural rubber (“caoutchouc”) from Malaysia, to be used by its pharmaceuticals division. They hope this vertical integration will reduce the overall cost of their products by eliminating the middleman. However the return trip cargoes are not yet finalised. The company executives are currently considering two scenarios: a small containership could carry most of their products (but not the bulkier ones, which means it might have to undertake return trips below maximum capacity); a general cargo ship would guarantee maximum utilisation of the ship’s capacity during the return voyage. Your task is to produce a preliminary report in order to help the company decide which scenario is the most favourable. You will have to consider the yearly costs for 2 handysize vessels (container & general) operating on the Labuan- Yokohama route. A list of costs is available in Stopford’s Maritime Economics 3e (chapter 6). Some of these costs can be quantified using Drewry’s Ship Operating Costs Annual Review and Forecast, also available from the university library. Other costs will have to be researched (e.g. port fees) or calculated (e.g. bunkering). When information is not available it must be forecast; you must provide adequate references and justify your calculations when data is not directly available. Since the company executives are not shipping specialists, your report is also expected to classify shipping costs employing an appropriate cost accounting method, and summarize them in a table spanning a single page, for easy and comprehensive comparison. Finally, based on these yearly costs, as well as the capacity of each ship, you should determine the imported rubber’s transportation cost for each scenario. Your report is expected to conclude with a recommendation based on said cost comparison. Additional recommend
dations are of course welcome (provided adequate referencing/justification).