Ocean Carier

Case 2: Ocean Carriers

1.) The factors that drive the daily hire rate are supply and demand, operating expenses, and the length of the lease. Basically, this rate was mainly affected by the total supply of its carriers and the demand the market has for them. The greater the need that the market had for them, the more ships the company kept on hand and the less they could charge their charterer as long as profits remained sufficient.

Operating expenses also played a role in determining the current daily hire rate. The daily hire rate is their source of income in the business, so if the rate failed to provide adequate funding to pay off the companies operating expenses, then company would fail.

Finally we the length of the lease, which itself is a huge determination of the daily labor rate. If the leases were short term, such as one year, then daily labor rates, especially for those projects that required the firm to purchase/contract another vessel for distribution, would be significantly higher in order to provide a buffer in case demand was not high enough in the future to lease the vessel out again and make the investment worth the risk. (These are just roughs, feel free to change or alter them as you see fit).

2.) Fluctuation of the world economy is directly related to the prospects of the Capsize dry bulk industry. Especially the