ABSTRACT
Freightistherewardpayabletoacarrierforthecarriageandarrival ofgoodsinarecognizedcondition.Thepricingofacargoship's servicesisdependentontheforcesofsupplyanddemand,butthe factorsunderlyingthemareperhapsmorecomplicatedthanis thecasewithmostotherindustries.Aswithallformsoftransport, thedemandforshippingisderivedfromthedemandforthe commoditiescarried,whichisitselfaffectedbythecompetitionof substitutegoods.Shipsonanyparticularroutearecompeting againstothercarriersonthesameroute,vesselsservingalternative supplyareas,airtransportand,incoastalservices,inlandtransport. Animportantfactortodayinthepricingofashippingserviceisthe addedvalueitprovidestothecommoditycarried.Therationaleof linkingthelow-costlabourmarketsinthetigereconomiesofthe FarEastwiththehigh-costandverystrongbuyingpowerinEurope andNorthAmericaexemplifiesthesituation.Asiareceivesraw materialsandsemi-finishedgoodswhileitexportsfinisheddepartmentalstoregoodsofrelativelyhighervalueandrequiringhigher freightratesinthecontainermarket.
