Ocean Carriers

Harvard Business School Case 202-029

Case Software 202-702
Copyright 2001 by the President and Fellows of Harvard College
This case was prepared as the basis for class discussion rather than to
illustrate either effective or ineffective handling of an administrative situation.

Exhibit 1

Capital Expenditures Anticipated in Preparation for Special Surveys

2007

2012

2017

2022

2027

300,000

350,000

750,000

850,000 1,250,000

Exhibit 3

Current order book for dry bulk capesizes by delivery date

2001

Number of vessels

2002
63

2003
33

2004
21

Exhibit 4

Daily Hire Rate Adjustment Factor for Dry Bulk Capesizes Based on Age of Vessel

Over 24 years 20 to 24 years 15 to 19 years 10 to 14 years

0.65

0.75

0.8

5 to 9 years Under 5 years

1.05

1.15

Exhibit 5

Worldwide Iron Ore Vessel Shipments, Fleet Size and Average Daily Hire Rates for Capesize Charters, 1994-2001
1994

1995

1996

1997

1998

1999

2000

Iron ore vessel shipments

375

397

385

424

420

410

440

Fleet size

NA

NA

NA

540

523

523

552

Avg. spot rate

$16,851

$20,149

$11,730

$14,794

$10,105

$9,427

$22,575

Avg. 3-yr charter rate

$18,250

$18,544

$14,079

$16,063

$13,076

$12,626

$15,344

apesize Charters, 1994-2001

2001E
436
612

Exhibit 6

Forecasted Daily Time Charter Rates for New Capesize Vessel

Age of Ship

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Iron Ore
Shipments
Event Year Calendar Year (Millions of Tons)
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027

440
436
445
454
463
472
479
486
493
501
508
516
524
532
540
548
556
564
573
581
590
599
608
617
626
636
645
655

% Growth
7.30%
-0.90%
2.00%
2.00%
2.00%
2.00%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%
1.50%

Avg Daily Charter

Rate
15,344
14,747
15,072
15,403
15,742
16,088
16,273
16,460
16,650
16,841
17,035
17,231
17,429
17,629
17,832
18,037
18,245
18,454
18,667
18,881
19,098
19,318
19,540
19,765
19,992
20,222
20,455
20,690

% Growth
21.50%
-3.90%
2.20%
2.20%
2.20%
2.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%
1.20%

Adjustment
Factor for
Hire Rate

1.15
1.15
1.15
1.15
1.05
1.05
1.05
1.05
1.05
1.00
1.00
1.00
1.00
1.00
0.80
0.80
0.80
0.80
0.80
0.75
0.75
0.75
0.75
0.75
0.65

Adjusted
Daily Hire
Rate

17,713
18,103
18,501
18,714
17,283
17,481
17,682
17,886
18,092
17,428
17,628
17,831
18,036
18,243
14,762
14,932
15,104
15,278
15,454
14,654
14,823
14,993
15,166
15,341
13,448

Expected
Daily Hire
Rate

20,000
20,200
20,400
18,714
17,283
17,481
17,682
17,886
18,092
17,428
17,628
17,831
18,036
18,243
14,762
14,932
15,104
15,278
15,454
14,654
14,823
14,993
15,166
15,341
13,448