gCaptain.com

gCaptain has recently expanded into the web design and development business. We recently completed an overhauld of Northeast Maritime Institute’s website and our latest venture is a site redesign for Marine Money International (update coming soon).

While visiting their Stamford Office I was told of a great blog published by traders working for the cargo futures and derivatives firm Imarex. It’s called Ton Mile Trader and while most of the daily posts are of little interest to your average mariner they have two excellent sections called Ask A Trader and Useful Info. Here’s a preview of the questions and answers you can find there:

Where does the term “barrel” of oil come from?

“Barrel” goes back to the discovery of oil in Pennsylvania in 1859.  The only suitable storage containers in extistence at that time were 40 and 42 gallon wooden barrels. The 40 gallon barrel was used to store whiskey, while the 42 gallon model was used to store wine.  Standard Oil preferred the 42 gallon version.  Since they dominated the oil market at that stage, their preference became the standard.

Why are cargos usually quoted in metric-tons, while oil is priced in barrels?

When loading oil into a tanker - both the weight and volume of the oil must be taken into consideration.  While the ships are built to fit even large amounts of the lightest grades of crude oil into the tanks, there is still only so many tons you can load before the ship is in violation of governing rules.  The point being - you can’t load a tanker until it’s almost underwater.  The issue, of course, is that barrels are a volume measure while tons are a weight measure.  In order to convert one into the other, you need to know some specifics - most notably the temperature of the oil and the specific gravity.  Wamer oil will expand, and therefore weigh less per unit volume than will colder oil.  With that said - many cargos are referenced in barrels.  It’s just a matter of “convention”.

Lots more answers can be found HERE and HERE. Go take a look.

Photo by Timothy Hamilton

The NYTimes reports:

Since mid-2006, a confluence of powerful forces — from a shortage of ships to the seemingly unquenchable thirst by China for raw materials — has sent the world’s benchmark for shipping rates soaring 365 percent.

The meteoric, and at times volatile, course of shipping costs has grabbed the interest of Wall Street and focused attention on the tiny Baltic Exchange in London, where shipbrokers set the price for ferrying goods each day. As the exchange’s Baltic Dry Index of rates hovers near record highs, investment banks and hedge funds are entering the fast-growing market for financial instruments linked to the index.

The market for ships has heated up too. For the first time, prices of vessels meant to carry dry goods like iron ore and grain have eclipsed those for some oil tankers. Some owners are converting tankers to dry cargo ships. Others have begun trading slots in shipyards where new vessels are built. And prices of second-hand merchant vessels are leaping.

“It’s absolutely out of the ordinary,” said Nikos Nomikos, a professor of shipping risk management at Cass Business School in London and a former Baltic Exchange analyst. “Five years ago, nobody would have predicted that the market would go up by that much.” Continue Reading…

Mariners, Take Full Advantage of Your 401K

By Capt. Ben Dinsmore

As shipping companies continue to phase out defined pension plans for an ever increasing number of mariners, the 401k has become the cornerstone of many American seafarers’ retirement plan. Unfortunately, success is not guaranteed with these plans and mariners need to take the following steps to maximize the performance of these accounts. [Continue Reading →]

Photo by Crusair

Eurodam News, a blog following the construction of the brand new Holland America Lines’ cruise ship M/V Eurodam, recently featured a very interesting post by the company’s director of budgets and planning Tim Murphy. The subject: How To Buy A Cruise Ship. Murphy writes:

“First, you make an economic decision about whether you need a new ship,” Murphy said. “Then you negotiate a price with the shipyard. Generally, you then make a down payment, usually in the range of 5 percent. Then there is a series of staged payments while the ship is being built, with a final big payoff at the time the ship is delivered.”

Murphy said that Eurodam is being financed by Holland America Line through Carnival Corporation’s ownership of the company. “We are in the enviable position that we can self-finance a new cruise ship due to our parent company’s strong balance sheet and solid cash flow,” he said.

Another of Murphy’s areas of responsibility is warranties. A cruise ship is a very large, complex machine made up of lots of smaller systems and moving parts, and just like with a new car, the owner is going to want warranties for a set time period in the event that there are problems with any parts or systems.

“Pretty much everything on board that’s not a consumable, like light bulbs and that kind of thing, is under warranty for a year,” said Murphy. “Larger, more complex and more critical systems like the engines or water treatment plant would have an extended warranty.”

Before the line takes possession of the ship from the shipyard, any outstanding warranty issues are negotiated and a pre-delivery list of things that still need to be done such as painting, laying carpet or other cosmetic finishes is made and the shipyard is obligated to finish those tasks as soon as possible.

You can read the entire article HERE.