Maritime Carriers in Theory

Abstract

A transportation carrier (or fi rm) provides for hire transportation services. A transportation service is the movement of goods and/or individuals from one location to another. Freight (passenger) transportation service involves the movement of goods (individuals) from one location to another. A transportation service creates value for goods and individuals by transporting them so that they arrive at the right time (time utility) and at the right place (place utility). Unlike a transportation carrier that transports the goods of others in return for monetary compensation, a private provider of transportation service uses its own resources (e.g., its own vehicles and labor) for the transportation of its own goods and individuals. A maritime carrier is a carrier that uses a waterway – an ocean, a river or a lake – in the provision of a transportation service; that is, a maritime carrier transports goods and/or individuals in vessels that move over a waterway from one location to another. Maritime carriers are described by the type of vessel utilized – cruise and ferry lines use cruise and ferry vessels – and by the type of cargo transported – container shipping lines transport containers and LNG carriers carry liquefi ed natural gas (McConville 1999 ; Stopford 1997 ). This chapter describes a maritime carrier from a microeconomic theory perspective. Section 5.2 considers maritime carrier resources, production functions, transportation service measures, operating options for varying the quality of service, and resource functions. Section 5.3 discusses the cost of maritime transportation service – long run and short run cost functions of single service and multi service maritime carriers in providing cost effi cient maritime transportation service in the long run and the short run, non shared versus shared costs, and internal versus external costs. Section 5.4 discusses demand for the transportation services of maritime carriers with respect to the full prices for these services, that is the carrier ’ s price that is charged for a transportation service plus the logistics Maritime Carriers in Theory