Change strategy and management organization of Shipping Company as respond to severe market conditions

Introduction

Efficiency of management is a management of activity of the enterprise with the minimum costs and the maximum results. In management allocate economic and social efficiency.

Result of economic efficiency is the economic benefit reflected in growth of profit, decrease in costs, improvement of quality etc. Result of social efficiency is the social effect.

It consists in increase of satisfaction of workers from performed work, improvement of working conditions, increase of well-being of workers.

More than ever pressing question about management efficiency at shipping companies.

We live in a global society which is supported by economic, and this economy simply could not function, if there were no courts and navigable branch. Shipping is an economic link: without shipping, intercontinental trade, cargo transportations of crude materials and import / export of accessible products and the goods simply would not be possible.

Shipping — the branch which is engaged in transportation of the goods and passengers by waterways. Passenger operations were the greatest component of shipping; however airline traffic has considerably limited this sector of branch. Substantial growth, however, in some types of cargo, for example, oil, more than have compensated loss in passenger transportations. Though crude materials, such as mineral ores, coal, wood, grain and other foodstuff make a considerable and still growing share of cargo transportation by sea, transportation of the industrial goods has essentially grown since the Second World War.

Shipping is global branch, and its prospects are closely connected with economic activities level in the world. Higher level of economic growth usually conducts to more great demand on industrial materials which in turn stimulate import and export. The shipping market is cyclic by the nature, and charter rates usually fluctuate.

Charter rates and incomes of the shipping companies depend on a supply and demand in the market. Whereas demand factors depend on growth of trade and geographical balance of trade, offer factors depend on building and the order of new courts, and also write-off of the existing tonnage.

Barriers on an exit on the market are high price and necessity of sufficient monetary streams for financing of the working capital. Besides, specialised technical knowledge and experience are necessary. The competition in the market is based on the prices. However, the companies with younger fleet charge in the prices premium.

In pursuing the main research aim, I intend to analyze the following issues

• What external economical factors are affecting global transportation in general and shipping companies performance particularly

• How internal organizational structure should be modified in case of company’s

trading pattern change.