The Bulk Carrier Maximum Optimal Ship Size

Eliamin Kassembe, Zhao Gang

Abstract


The main objective of this paper is to investigate the economical limit for the ships’ increase in size. Ship size is
one factor out of many that affect the investors in the shipping business. The paper seeks to reassess the validity
of well-established theoretical frameworks, which support the concept of depending on the increase in size of
ships prompted by economies of scale. The investigation was conducted by use of quantitative methods where
mathematical modeling and simulations were used to analyze the relationships of the key variables. Computer
software like MS Excel 2010 was used to simulate and generate graphs, values and trends.
The empirical results of this work support the theory of economies of scale that can be enjoyed by operating the
optimal ship sizes. Optimality of ships, change linearly with changes in voyage length. The central and novel
contribution of this paper is about the existence of a threshold point where optimal ship sizes reflex the
economical maxima. For the dry bulk sector the maximum optimal ship size determined as 340,000 dwt.


Full Text: PDF DOI: 10.5539/ijbm.v8n4p44

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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