Economies of scale has a vital role in keeping transport costs low in shipping. It makes possible to merchandise with far destinations. Economies of scale reduces the transportation costs per unit. Importing a commodity from a far country may cost less than importing it from neighboring country. The purpose of this study is to determine the extent to which this cost advantage is used in practice by industrial firms and to test the operative field validity of the theory. In this study, it is assumed theoretically that the larger vessels would have lower transport costs and the model is simplified by eliminating transport costs and coal prices. . In other words, as the distance increases, the size of the ship will also increase according to our basic hypothesis. ISDEMIR Port is selected as a sample for this study because of its geographical proper position and its high volume of coal import for its power plant that is placed to close position to the port. The data covers the years between 2008 and 2011. In these years totally 14.032.392 tons of coal imported by 313 bulk cargo ships. Correlation and regression analysis are implemented to determine the degree of the relationship. Volume is selected as a dependent variable and distance is selected as an independent variable. Results shows that there is a strong significant positive correlation between these variables. Also regression results show that change in distance explains big proportion of change in volume.
Economies of Scale in Seaborne Coal Transportation: A Case Study of İSDEMİR Port
2017
Article (Journal)
Electronic Resource
Unknown
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