Influencing factors of crude oil maritime shipping freight fluctuations: a case of Suezmax tankers in Europe-Africa routes

PurposeThe paper aims to identify the contributors to freight rate fluctuations in the Suezmax tanker market; this study selected the refinery output, crude oil price, one-year charter rate and fleet development as the main influencing factors for the market analysis.Design/methodology/approachThe paper used the VEC (vector error correction) model to evaluate the degree of impact of each influencing factor on Suezmax tanker freight rates, as well as the interplay between these factors.FindingsThe conclusion and results were tested using the 20-year data from 1999 to 2019, and the methodology and theory of this paper were proved to be effective. Results of this study provide effective reference for scholars to find the law of fluctuations in Suezmax tanker freight rates.Originality/valueThis paper provides a decision-making support tool for tanker operators to cope with fluctuation risks in the tanker shipping market.

State Failure, Violence, and Trade: Dangerous Trade Routes in Colombia

We investigate the effect of domestic armed violence brought about by political instability on the geography of distance frictions in freight mobility and the resulting differential access of regions to global markets. The Colombian transportation system has been found to be impeded by deficiencies in landside transport infrastructure and institutions, and by fragmented political environments. The micro-level analysis of U.S.-bounded export shipping records corroborates that export freight shipping from inland regions is re-routed to avoid exposures to domestic armed violence despite greatly extended landside and maritime shipping distances. We exploit the trajectories of freight shipping from Colombian regions and spatial patterns of violent armed conflicts to see how unstable geopolitical environments are detrimental to freight shipping mobility and market openness. The discrete choice model shows that the shipping flow is greatly curbed by the extended re-routing due to domestic armed violence and that inland regions have restricted access to the global market. The perception of risk and re-routing behavior is found heterogeneous across shipments and conditional to shipment characteristics, such as commodity type, freight value and shipper sizes. The results highlight that political stability must be accommodated for improved freight mobility and export-oriented economic development in the global South.

THE ASSESSMENT OF MARITIME SAFETY IN THE TURKISH STRAITS BASED ON THE PERFORMANCE OF FLAG STATES IN PORT STATE CONTROL REGIMES

The Turkish Straits are well known for theirs intensive maritime traffic. The average annual number of transit ships passing through this waterway is approximately 50000 and more than 100 flag states pass through it. Moreover, this waterway presents a navigational challenge owing to its inherent geographic and oceanographic characteristics. Also, sub-standard ships navigating in this region lead to an increased risk levels and pose a threat to the marine environment. Over the years, serious maritime accidents occurring in the straits region had resulted in losses of life and constituted environmental disasters. The high risk arising from maritime shipping in these regions had always endangered public health in the vicinity of the Turkish Straits. In this study, maritime safety in the Turkish Straits region had been assessed based on the performance in the Port State Control inspections of flag states passing through this region. For the assessment of the performance of passing flag states, detention and deficiency indices of these flag states were generated for the MOUs. According to these values, the risk level of these flag states had been determined by the weighted risk point methods. Hereby, in addition to the determination of the risk level of flag states, the relationships between the inspections of MOUs had been also discussed on the basis of both the detention and the deficiency rates of flag states.

Taxing Profits from International Maritime Shipping in Africa: Past, Present and Future of UN Model Article 8 (Alternative B)

International maritime shipping is an essential part of global business. Since the establishment of the current international tax regime in the 1920s, there has been a consensus that profits generated by this business are taxable only in the residence state –the state where the shipowners are located. Source states – the port states where business physically takes place – are generally expected to exempt income from international shipping. This standard is currently reflected in Article 8 of the OECD Model and Article 8 (Alternative A) of the UN Model, and is incorporated in the vast majority of bilateral tax treaties currently in force. Exclusive residence state taxation of shipping profits is problematic when the size of mercantile fleets and shipping flows between two states are of unequal size. This is often the case in relations between a developed and developing country. The latter often lack a substantial domestic mercantile fleet, but serve as an important revenue-generating port state for the fleet of the developed country. To come to a more balanced allocation of taxing rights in such a case, a source taxation alternative has been inserted in UN Model Article 8 (Alternative B). From its inception, Article 8B has been labelled impractical due to the lack of guidance on core issues, like sourcing rules and profit allocation. This gap is said to explain the low adoption rate of Article 8B in global tax treaty practice. In reality, tax treaty practice regarding Article 8B is heavily concentrated and flourishing in a handful of countries in South/South-East Asia – Bangladesh, India, Indonesia, Myanmar, Pakistan, the Philippines, Sri Lanka and Thailand. All these countries subject non-resident shipping income to tax in their domestic income tax laws. Except for India, all countries are able to exercise these domestic tax law rules in relation to shipping enterprises located in the biggest shipowner states, either because they have a treaty in place that provides for source taxation or because there is no treaty at all and thus no restriction of domestic law. None of the relevant tax treaties contain a provision that incorporates the exact wording of Article 8B of the UN Model. If other countries, like coastal countries in sub-Saharan Africa, are looking to implement source taxation of maritime shipping income in the future, they are advised to draw on the South/South-East Asian experience. Best practice can be distilled regarding sourcing rule, source tax limitation, profit attribution and method of taxation (on gross or net basis). In addition to technical guidance on tax, the South/South-East Asian experience also provides important general policy considerations countries should take into account when determining whether source taxation of maritime shipping profits is an appropriate target for their future tax treaty negotiations.

Architectural building design with refurbished shipping containers: a typological and modular approach

Construction of housing buildings using refurbished shipping containers constitutes a successful recent building system. As construction modules, disposed and recycled containers are considered to contribute for a sustainable construction system. This article aims to contribute to a better understanding on this construction system, in particular the architectural project. A methodology based on the typological and modular coordination is proposed as a key tool to help for the development of spatial arrangements by considering the shipping container as a unit/module. The functional occupation typologies were proposed to characterize the main housing activities to be considered in modular coordinated design, allowing to adapt the housing to the family needs according to their social and cultural dynamics. The module constitution and geometry considering two commercial maritime shipping containers are presented.

Where has the rum gone? The impact of maritime piracy on trade and transport

Despite a general agreement that piracy poses a significant threat to maritime shipping, empirical evidence regarding its economic consequences remains scarce. This paper combines firm-level Chinese customs data and ship position data with information on pirate attacks to investigate how exporting firms and cargo ships respond to maritime piracy. It finds that overall exports along affected shipping routes fall following an increase in pirate activity. In addition, piracy induces firms to switch from ocean to air shipping, while remaining ocean shipments become larger. At the ship-level, the paper provides evidence for re-routing, as container ships avoid regions prone to pirate attacks.

Reconstruction of various navigational scenarios of the «Ever Given» ship, including grounding in the Suez Canal using the bridge simulator with up-to-date electronic navigation charts

The Suez Canal is the largest maritime shipping traffic thoroughfare in the world. The global cargo turnover accounts for 10-12%. Theaccident occurred on March 23, 2021 with the container ship “Ever Given”, blocking the Suez Canal. It fully paralyzed shipping traffic in the region and caused enormous damage to the economy. Reconstruction of various navigational scenarios of the containership, including grounding based on the bridge simulator, allowed examination of navigation and developing recommendations to prevent similar accidents in the future. Within the limits of the research, the authors used electronic navigation charts S-57 with up-to-date information on the accident time, a similar model of containership and hydro-meteorologic conditions in the bridge simulator’s session.An assessment of the risk of grounding a container ship has been carried out using the method of Bayesian trust networks.

Application of rapidly improving battery technology for direct electrification of intraregional container shipping

International maritime shipping—powered by heavy fuel oil—contributes 2.5%, 12%, and 13% of global anthropogenic CO2, SO2, and NOx emissions, respectively. The direct electrification of vessels has been underexplored as a low-emission option despite its considerable efficiency advantage over electrofuels such as green hydrogen and ammonia. Previous studies of ship electrification have relied on outdated battery cost and energy density values and have incorrectly assumed mechanical space to be a fixed technical variable. We show that with near-future battery prices of $100 kWh-1 the electrification of intraregional trade routes of less than 1,000 km is economically feasible with minimal impact to ship carrying capacity. Projected declines in battery price to $50 kWh-1 could improve this range to 5,000 km. We describe a pathway for the battery electrification of containerships within this decade that electrifies over 40% of global containership traffic, reduces CO2 emissions by 40% for US-based vessels, and mitigates the health impacts of air pollution on coastal communities.