Marine Transport Business - Case Study Example

Size of the ship is specified by the tonnage and the largest ship class is ultra large crude carriers with a capacity of 550,000 DWT. Different designs used include single, double hull and single, double bottom. Shown below is a cross section of a typical oil tanker.LNG carriers find use to transport LNG, Methane, butane, propylene, acetylene and other gases. Each ship has 8-10 tanks filled with the fuel along with air-conditioning equipment and compressors attached to the LNG tank.Economies of scale become very important for such large ships.

The ultra larger carrier ships cost about three more in terms of fuel required and operating expenses. A Medium Range Tanker class - MRT ship carries 50,000 DWT of crude while an Ultra Large Crude Carrier class - ULCC ship carries 550,000 DWT of crude. Expenses such as operating, maintenance, running and other overheads, measured in cost per barrel capacity for ULCC class is about four times that of MRT. However, amount of crude carried is about 11 times more. Economies of scale indicate that shipment by ULCC is more cost effective than by MRT.

Hence, ULCC ships find use for trans-ocean movement. However, moving crude to the last mile or inside congested waterways in the port is not possible with ULCC due to the large mooring depth and clearance needed. Hence, smaller ships such as MRT find use for smaller distance. Diseconomies of scale are present in shipping the smaller amount of crude.Some of the reasons for ships to travel at less than design speed are adherence to safety norms, rough seas, and inclement weather and for environmental reasons.

Even large ships in rough seas and rough weather face choppy journey and this can cause transported fuel to strike the hull. Repeated hits can weaken the metal and cause rupture.