A review of marketing for tramp shipping

International Journal of Shipping and Transport Logistics

Volumn 1, Issue 2, 2009, Pages 119-155

  Goulielmos, Alexandros M ^a   Plomaritou, Paraskevi ^a  

^a UNIVERSITY OF PIRAEUS   (Greece)

Author keywords

companies case studies; marketing mix; non linear tools applied; tramp shipping marketing

Indexed keywords

EID: 81555202916     PISSN: 17566517     EISSN: 17566525     Source Type: Journal    
DOI: 10.1504/IJSTL.2009.024492     Document Type: Article

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121. Fortunately, maritime marketing and management attracted the interest of a number of doctoral students (e.g., Panayides, 1998; Cahoon, 2004; Plomaritou, 2005; Michalopoulos, 2006).
122. In a very recent work by Wong et al. (2008, p.34), 50 factors relevant in the modal/carrier selection problem were analysed. Song and Yeo (2004) in port competition mentioned 73 factors. Chinese researchers are generally exhaustive in their research.
123. Gorton and Sandevarn (1999) devoted a chapter to marketing of liner companies and tramp shipping and analysed the impact of marketing on the head office organisation.
124. Tramp shipping refers to companies owning ships that have variable itineraries depending on the need of shipper of dry bulk (coal, iron ore, wheat, bauxite, fertilisers, etc.) and liquid cargoes (crude oil, refined products). This is contrasted with liner shipping where itineraries are fixed, pre-announced, pre-advertised and refer to cargoes coming from industry as ready products.
125. Conforming with a non-mandatory requirement like ISO 9001 and then appear in the press is for us nothing but an advertisement effort.
126. Professor Goss in a private discussion explained to me why he changed discipline’s name from ‘shipping economics’ to ‘maritime economics’. This was for him to be sure that ports are included in this discipline. Port economics and port management became eventually separate disciplines since mid 1950s.
127. Sturmey (1962) in his book wrote about shipbuilding. Guldem (2001) attempted an application of marketing to shipbuilding comparing Turkey and USA; shipbuilding marketing is oriented towards customer and is better to have a marketing department, she argued. See also her paper in IAME 2002 conference. Also in Grammenos (ed.) (2002): The Handbook of Maritime Economics and Business, pp.562-570, LLP, where Cerit presented (competitive) marketing strategies in shipping without going in proper depth.
128. In the Dutch ‘maritime cluster’ belong 11 industries: Shipping-Shipbuilding-Ports-Offshore (energy)-Dredging-[nland shipping-Royal navy-Fishing-Maritime services-Yachting (water sports industry) and marine equipment (metal working and machinery). Marine economics is the policy of EU during Baroso’s administration. It is interesting however that Dutch shipping-shipbuilding and ports-covered 34% of total employment in 1997 (210,100 persons-including royal navy) involved nearly 12,000 companies. Employment fell by 2005 to 190,000 and a 25 billion euros total annual turnover. Ports had the first position, as expected, with 37600 persons, due to Port of Rotterdam, 6310 m DFs value added and 9060 million DFs production of services (17.5% of a total of 51,762 m DFs). De Langen (2004) argued that maritime cluster became a ‘port cluster’. See also: Lai et al. (2004).
129. Soukakos et al. (2007) and Ruis and Ayadi (2007).
130. Brooks did not mention second author in her 1995 paper.
131. Most of the papers appeared in modal selection are found in transportation journals and not maritime ones. See also Brooks (2000) on marketing of liner companies.
132. As ports want to re-evaluate service product and make changes in service standards and structure and market new services.
133. Beresford et al. (2004) strongly criticised UNCTAD’s third generation port model, unfairly we believe.
134. Ports charge according to revenue (value) created by them to ships reflected in her GRT or NRT, even when ship is ballast and brings no revenue. This had to change however as dwt is a better indication of revenue, provided the ship is loaded (indicated by her draft). So, ships must pay by dwt and by draft for us as in certain French ports. Draft also reflects dredging cost (high in USA). A more modern approach is the so-called cost recovery theory for ports (see writings of Trevor Heaver in Maritime Policy and Management Journal as well as in others). Port pricing no doubt must be easy to understand and ports have to provide customised service packages to users according to UNCTAD (1992).
135. Niekerk (2005) argued that marketing, public relations and performance function is one of the five fundamental port authority functions based on a paper of De Monie (1994).
136. This is known as a position audit. This is a framework for analysing a firm’s present position studying: its strengths, weaknesses, opportunities and threats.
137. The first four factors after word advertising are those suggested by Branch (1997, 1998). The 1998 book by Branch has been reviewed by Lorkin (1999) where he argued that theory and practice of marketing and market research in shipping industry, acting in a complex international market, provides tremendous scope for investigation and that clearly this is a subject in its own right. Many organisations however took it right and many took it wrong without explaining what he meant.
138. These are all aspects of company’s physical facility as well as other forms of tangible communication [Zeithaml and Bitner, (2003), Chapter 10]. Shipping is a complex servicescape, i.e., an elaborate servicescape.
139. The proceedings of European Short Sea Shipping (1994, Athens) included: a Wierikx and Riet (1994) presenting the characteristics of the ship market transporting wood products using a method to determine opportunities of development and strategies of applying marketing and of market segmentation and service differentiation. b Maertrens (1994) spoke of competitive marketing and strategies creating a competitive advantage to ports. c In 1995 Thalasssa Forum (Athens), Pattofatto (1995) touched on the philosophy to be adopted and the management strategies and marketing to be applied by shipping companies to face challenges in a world-wide level.
140. http://www.iame2008.org/program.htm, port marketing has at last won a permanent place in contemporary research by the members of this unique association of maritime economists (IAME).
141. Michalopoulos V. (2006) in his PhD, studied benchmarking in ports. See also Michalopoulos and Pardali (2008). According to Brooks and Pallis (2008) 41 ports have used balanced scorecard, benchmarking, reengineering, ISO 14000 and TQM.
142. In the proceedings of LSM ship management (Cyprus, 1996): a Rajaish (1996) presented the crucial maritime marketing tools, the basic actions of a marketing department manager and opportunities and operations in applying marketing to shipping. b Thorstensen (1996) spoke of the importance of applying marketing to shipping after ISM Code (total quality). c Kerr (1996) spoke on the needs of charterers for a flexible trade and itineraries, fast execution of transport, experienced and suitable trained crew and a reduced cost. He outlined the necessity of applying marketing for a company’s management to satisfy needs of clients. d Panayides (1996) spoke about the benefits of applying relationship marketing to the management companies of third part owned ships. Benefits are to retain clients and minimise cost of offering services.
143. In the proceedings of a Singapore (2000) conference titled: ‘Highlights and conclusions of the quality shipping seminar - a global perspective’: a Moore (2000) spoke of quality shipping-perspectives of charterers and presented the concept of service from their point of view. He defined first quality of service, he then presented the wishes of charterers during a charter bargaining and their demands from ship-owners in a fixing and analysed the choice criteria of ship-owners in the tanker market. He stressed the basic role of marketing to enable a shipping firm to offer high quality sea transport services. b Cheng (2000) defined quality of service from the point of view of ship-owners and distinguished operational, commercial, acceptable and high quality and ships in standard, sub-standard quality and defined marketing policy.
144. http://www.oas.org/cip/eng/CoursesSeminars/2008%20courses%20&%20conferences/rep%20Dominicana.htm.
145. A product out of his PhD thesis. In 2001 he published his PhD.
146. It is obvious that much effort of marketing is centred in the way price is determined (Kotler, 2000).
147. Another P is often added standing for politics.
148. htpp://www.apecun-korea.org/.
149. This terms is used when relationships between examined dependent variables (sales, e.g.) allow for disproportionate responses to changes in independent variables (profits, e.g.). This term has been associated with chaotic behaviour.
150. Chapter 3 by Brown and Duguid (2004).
151. These principles are due to Priesmeyer (1992) and three more are not applied here for lack of space.
152. Students of economics know that traditional economics is static and limited, as it examines only price and quantity demanded at a time under the ceteris paribus assumption. When other factors vary-apart from price and quantity-demand and supply curves shift and price and quantity demanded form another equilibrium level after the previous one. Time is absent. Ceteris paribus condition acts like an automatic photographic camera that clicks at the object, printing also a date on the picture. This is not dynamic. At best comparing two pictures we get a comparative-static’s idea of evolution in different times.
153. Most however expect equilibrium according to the ‘law of demand’, meaning that as price rises, quantity demanded falls and vice versa.
154. Chaos is an exact science where errors are not allowed as in traditional statistical analysis of best fit, where we minimise squared deviations of actual observations (normal equations) from best fit line.
155. The points in the phase space are attracted by a cycle. The time series rests down in a certain period and the system rests down in a periodical move. Example is a watch with a pendulum. In non-linear marketing we deal with limit cycles as mentioned (second simpler attractor described in Appendix 2).
156. This pattern shows the start of an oil demand contraction (1981-1987) and limited oil cargoes.
157. The five larger vessels, near a size of 70,000 dwt, left a final loss of only $8,570. This fleet of 22 vessels gave a total year profit of 5.97 million dollars considered to be 1/4 of the normal even during depressed times.
158. The fleet reduced in early 2006 to 1.6 m. (24 ships or 25 according to other sources referring to different times).
159. Differentiation as a competitive advantage is the ability to provide unique and superior value to the buyer in terms of service quality and special features (here double hulls, dedicated ballast water tanks). This is inherently more costly. In shipping a premium price cannot be asked for.
160. Factors affecting this sector are: possible recessions/import shifts or wars (gulf) in major importing (e.g., USA or Japan) or exporting (e.g., Kuwait) countries. Japan, e.g., in 1991 cut down imports of refined products by 25% in a policy to favour domestic oil refineries. This affected market. So did the Kuwait war.
161. Lloyd’s Register of Shipping (1994) had an interview with the one of the four Eletson managers. In our research we have used two company’s booklets and other material mentioned below provided to us by the company.
162. Diana Shipping in NY Stock Exchange is a shipping company dedicated also to new-buildings. These owners, by investing in new ships, invest in fact in a full horizon of 15-20 years which is the average economic life of a ship. By so doing, they avoid confrontation with any surprises coming from short term cycles and possible wrong timed decisions. A new-building vessel is bound to meet bad, but also, good times. This is a strategy. A short-lived second hand vessel by chance may meet only bad times… So, some Greeks play against destiny or chance by accepting short term cyclicality and take risk. Being however in freight market, this is the highest risk of all [Goulielmos (2009), forthcoming in this journal].
163. As known the balloon is equal to the resale (or scrap) value of the ship at the time when the balloon is agreed to (Goulielmos, 2007) be renegotiated.
164. Refined petroleum products, as well as crude oil, molasses, vegetable oils and even freshwater.
165. The company seems that in 2006 was in a transition phase, as stated. The children passed away of the founding members ‘have taken a dominant role in the management of the company’. Interesting is that one child (Mr. Kertsikoff, 2005) is Vice President/Marketing, who started with the company in 1995 and stationed in the company’s marketing office in Connecticut. He talked (2006) about ethics and the dominant problem of the availability of Greek sea officers. We were unable to obtain his job description.
166. Mr. Martinsen talked also for organisational learning and leadership for first time for this company.
167. A term used first in 1993 is VLPCs, meaning a product tanker of or larger than 80,000 dwt (Lloyd’s Shipping Economist, 1993). In 1992 were 91 such tankers of 10 m dwt, seven being greater than 100,000 dwt as mentioned above.
168. This policy may guarantee only employment at prevailing spot rate, but this rate is not always profitable.
169. As shown in Lloyd’s Shipping Economist in April 1992, p.31.
170. The ability of a company to design, produce and market a comparable service more efficiently than its competitors, securing, by so doing, superior returns.
171. This happens when a company transports in separate ships two or more distinct - in main category - cargoes. A good example of synergy is an OBO vessel (transporting three cargoes in one: oil-bulk-ore). A company with OBOs achieves a lower total cost compared with the situation of costs of three dedicated ships each transporting one cargo. A similar non-synergy example is when coastal ships transport only passengers or private cars or Lorries, compared with those ships transporting these three together. The last ship has a synergy benefit where 1 + 2 does not equal 3. Synergy is a Greek word meaning a work done or resulted by two or more persons.
172. Acronym from the words: Political-Economic-Social-Technological and Environmental.
173. Kertsikoff (2006), speech 20 November 2006. Karastamati (2006), 04 December 2006 speech.