• Executive Summary This report provides an analysis and recommendation of current issues faced by Singapore-based Meli Marine, a leading container shipping company in the intra-Asian market, weather gain a presence in the Asia-North America trade routes through an acquisition of 16 vessels of Teeh-Sah Holdings. On the surface, this opportunity would expands Meli’s business and diversify it’s operations and provide a protect function against a downturn in intra-Asian market. But, this oppotunity will bring Meli lots of economic risks. It would return Meli to its former less flexible model with owning vessels also. I recommend that Meli giving up this opportunity and keeping going current excellent customer service then gradually into TransPacific Within Asia-NA market, the back haul from NA to Asia nearly empty. Meli need to consider this problem because it’s a huge impact on profit. • Opportunity Cost Meli need to spend lots of time on Asia-NA route if Meli take the acquisition, which could detract Meli managing strong customer relationship, which is Meli’s competitive advantage. Otherwise, Meli need to spend cash and take debt to buy vessels, which will make Meli unable to invest other area listed in “container shipping value chain” such as inland delivery. o PEST Model • Political Container shipping industry is kind of international trade and destined restricted by los of regulation, such as ocean environment law, nation’s imports & exports law. • Economic Fixed cost is high for the container shipping industry such as vessel fees, container fees, and labor of loading and unloading. Variable cost is fuel cost, because the volatility of fuel price, so there is a potential huge impact on industry’s profit. • Social Whatever you do, safe is first. Ocean shipping probably will meet with the pirates that could lead economic loss. •
Variable costs, for a manufacturing company, are those costs that increase or decrease as production increases or decreases. If production increases, then variable costs will increase; if production decreases, variable costs will decrease. For Claire’s Antiques, examples of their variable costs would be manufacturing labor, raw materials, and manufacturing overhead. Examples of manufacturing overhead would be the utilities that are used in the production facility, and the oils and lubricants used in the machinery. Fixed costs in a manufacturing company are those costs that remain constant regardless of the level of production. Examples of fixed costs for Claire’s Antiques are: sales and administrative costs, rent and/or mortgage on the production facility, and depreciation. Semi-variable, or mixed, costs are costs that have both fixed and variable costs. An example of a semi-variable cost could be if Claire’s leases their delivery trucks, and the lease includes a mileage fee. The monthly lease would be considered a fixed costs, but the mileage fee would be a variable cost. (Hofstrand, 2007). In most cases, fixed costs are usually higher than variable costs, and can absorb a great deal of profits. Because of this, some companies may consider converting their fixed costs to variable costs.
Modern piracy has touched nearly every corner of the globe and has increased with globalization. The tentacles of piracy now extend from South America to the South China Sea. The greatest numbers of piracy incidents occur along maritime commercial trade routes. Since China dominates the world’s container shipping industry, the South China Sea has become a hotspot for piracy (Kraska 2011). The prominence of cargo activity increases opportunity for pirates and indisputably triggered the sixty- nine incidents of piracy that were reported in 2009 in the South China Sea (Kraska 2011).
Grouchier, C & Walton, L. 2013. The maritime world: The Atlantic, Pacific and Indian Ocean World. Vol 2. London & New York.
The view from Tata motors perspective would be more central to seek out companies with more business plans and The company has a long term benefit like access to market knowledge and the development of firm presence on the new market and advantage would be that it limits the possibility of technology or knowledge transfer. Market commitment and Decision understand the requirement of a new market also the decision and implementation concerning foreign investment are made incrementally due to market uncertainty. The company have different approaches and implementation which are seen in the background and has different prior knowledge acquisition (Johanson & Vahlne,1977, p.34).Tata motors have understood that the arrangement was based on its acquired about the market and industry dynamics. Consequently the company had to have the commitment to allow constraint in the case of its freedom with the supplier and surrounded technology. Current activities is somewhat fascinating on how precisely the crucial of Tata motors are consistent with Uppsala theory and the result was Tata motors acquisition and in the longer terms is to move up in the value chain as much as possible, with the
Investing or venturing into the international market involves critical analysis of the internal and external environment in which the company operates. Usually, a company will decide to venture internationally due to a saturated market or fierce competition in the current country of operation. The demand for a company’s products may have diminished as a result of an economic crisis thus the company will target a foreign market to sustain its sales. In other words, the firms expand internationally to seek new customers for its products. For example, the current Euro zone crisis led to low demand in Europe and many companies extended their businesses to emerging markets where demand was high. A company may also venture in the international market to enhance the cost-effectiveness of its operations especially for manufacturing companies that will benefit from low costs of production in developing world. Global expansion is a long term project as it involves demanding logistics to be successful. Thorough research must be undertaken to ensure that the expansion will create value for share...
More than forty thousand merchant ships, and countless number of smaller coastal craft, ply world oceans which comprise nearly seventy percent of the earth’s surface. Each year approximately ten million containers of cargo, containing raw materials to finished goods are transported by seas. The ships are owned by different states, private companies or individuals and manned by mixture of seafarers from different countries, mixed together from various nationalities. These ships are perhaps the most autonomous entities on earth as rule of law allows frequent change of their allegiance or identity by choosing a flag to suit their requirement.
By selecting the service of cheap international transport company, people will get extra discounts on the port cost. People have to provide all essential shipping documentation while transit. If an individual plan to move car, then opting cheap international auto shipping company will not offer exorbitant fee. The containers that have chosen from cheap international shipping company will be provided at low rates and which is comprehensive cost saving option obtainable for people.
Relocating parts of company’s manufacturing plant from New Zealand to Malaysia would definitely have cost reducing effect on company’s manufacturing operations due to cheaper labour cost and plant. However, there are downsides to what seems like a utopia for manufacturers. This essay will cover some important market and non-market environments in Malaysia that would have an impact on firm’s manufacturing operations.
The authors try to emphasize the importance of new growth dynamics for containerization not just for being a transport unit but also as a supply or commodity chain unit as well. The group of authors also briefly explain that Containerized freight is commonly characterized by the movement of manufactured goods and parts from manufacturing facilities to retail activities with the whole range of distribution activities in between, such as terminals and distribution centers. The way containerized freight is used is a benefit in multiple ways from the space flexibility to movement of goods shown in terms of distribution efficiency. Containerization dynamics has for some time relied on a variety of factors that are noted as being derived volume linked with globalization, the substitution of break-bulk traffic into
The freight rate is the price of the carrier that pays by the charterer or ship owner. Freight rate is compulsory and it is measures by the value of goods, point of destination and the travel distance due to land, air or ocean. Freight rate also include with the custom clearance process. It is demanded by the fluctuation of supply and demand, the bargaining power of shipper, the competitors with other logistic company and the availability or alternative of transport modes (lorry, train and ship) (The Challenges Facing The Maritime Transport Industry,
A “Fixed cost” can be defined as “a cost that does not change with an increase or decrease in the amount of goods or services produced or sold”. It is time related.
Department of Homeland Security, “ Implementation of National Maritime Security Initiatives”, Federal Register, Rules and Regulations, Vol. 68, No. 204, October 22, 2003 ,p.,60448 cited in Sean D. Murphy P, United States Practice in International Law, Volume 2; Volumes 2002-2004 Cambridge university press, new York, 2005,p .130
Piracy is the direct threat to maritime security for ship owners. Other crimes such as maritime terrorism and the use of phantom ships are far less common, although still a significant issue. The International Maritime Bureau’s Piracy Reporting Center (IMB-PRC) defines piracy as “an act of boarding or attempting to board any ship with the intent to commit theft or any other crime and with the intent or capability to use force in the furtherance of that act”.
Water transport is not flexible because it is restrained within water bodies. The use of containers has becomes the best inter-modal option for water transport whereby goods are placed in containers and transported through truck or rail to the port where it is loaded in to a container ship. Upon arrival to the destination port it is offloaded and transported again by track or rail to the consumer of customes.This helps reduce staffing needs, transit time and damages (Haulk, 1998).
Their main objective is to provides the framework especially for shipping and inside the framework had include the safety, environmental concerns, legal and policy, integration of technical, security of maritime and the efficiency of shipping.