Your answer script should be 2200 words in total, ± 10%. You
are required to include your word count on the title page.
Answers must be typed.
10. Question numbers must be clearly shown beside each answer.
References MUST be provided in-text and in a reference list as
per the Harvard 2002 style of referencing. Please also include a Table
of Contents. However, there is NO requirement to include an abstract,
introduction or conclusion.
Attempt ALL THREE (3) questions.
Page 1 of 3 Pages
Explain how short shipping cycles can be caused by changes in supply and
demand in the shipping market. Provide relevant examples and industry
information to illustrate your answer.
The International Maritime Organization (IMO) will enforce a new 0.5% global
sulphur cap on fuel content from 1 January 2020. Use relevant examples
and industry information to complete the following two tasks.
a) Explain the impact of the new regulation on the shipping market from the
Discuss the strategies shipping operators can take to comply with the new
Based on the attached article and relevant references, complete the following two
a) Explain why U-Ming signed the 25-year Contract of Affreightment (COA).
Discuss how the delivery of two very large ore carriers (VLOC) may affect UMing’s operations and the shipping market.
Page 2 of 3 Pages
U-MING ORDERS TWO VLOCS FROM QINGDAO BEIHAI
U-Ming Marine Transport (Singapore), a subsidiary of U-Ming Marine Transport
Corporation, has signed a 25-year Contract of Affreightment (COA) with Vale International
SA of Switzerland.
The COA is the biggest and longest commitment in U-Ming’s history and the total contract
value is anticipated to be more than USD 600 million.
In order to support the contract, U-Ming has ordered two 325,000 dwt very large
ore carriers (VLOC) from China’s Qingdao Beihai Shipbuilding Heavy Industry. The two
ore carriers will feature an LNG-Ready design for retrofitting to dual-fuel in the future.
The vessels are expected to be delivered in 2020.
U-Ming added that each vessel will be equipped with an ecoefficient main engine,
SO2 scrubber features, digital optimization systems, and comply with the International
Maritime Organization’s 2020 sulphur cap of 0.5% with effect from 2020.
“The signing of this long-term contract has further enhanced the cooperation and
relationship between Vale International SA and U-Ming. The COA will commence in 2020 until
2045 for transporting Brazilian iron ore to China. We have been able to secure a
bigger portion of long-term charters with stabilized revenue and profit for the
company,” a U-Ming spokesman said.
The company added that the deal comes on the back of a significant recovery of the dry bulk
shipping market in 2017, driven by higher demand from China and increasing iron production
from mining companies in Australia and Brazil.
“This COA is contracted to meet the iron ore demand growth especially in China and other
developing countries; and with UMing’s prudent management and customer service
oriented vision to create a win-win for both parties,” the company’s spokesperson added.
According to Australia official estimates, the world iron ore total export in 2019 will reach
1.378 billion tons, a 7 pct growth as compared to 2017, of which Vale’s new S11D mine will
reach a nominal capacity of 90 million tons per annum by 2020 with an iron content of up to
The total iron ore export from Brazil in 2019 is expected to be 10 percent higher than in
(Source: World Maritime News, January 31, 2018.
Page 3 of 3 Pages
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