ABSTRACT
This chapter provides general principles to aid in the understanding of the demand and supply sides in shipping. These principles may serve as the basic points of departure for detailed and specific studies that are necessary if the interest is on particular commodities or trade routes. The structure of the tramp market is commonly regarded as freely competitive with rates set by market forces, that is, the free interplay of demand and supply. Any change in either the volume or distance of transportation will affect the demand for tonnage. Political and natural factors also exert influence on demand. The total supply of world tonnage is usually expressed in terms of the number of ships of different types and their deadweight capacities. In the bulk trade, trade routes change often and markedly as shifts occur in both sources of supply and markets. The very nature of liner service—that is, scheduled service on fixed routes—makes this an oligopolistic market.
