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Important technical development EssayThe most important technical development was the chunking of the liner shipping barter. The shipping industry has been so successful at exploiting this technical development that the cost of sea conveyance has hardly increased. Coal and rock oil cost little more to transport in the mid 1990s than in 1940s. Those important private roads which be mostly affecting the request for sea transport are 8 The World Economy As it was discussed before that world economy with its output and trade is the most important single factor to drive demand for shipping and any crisis in the world economy reflects in the demand for shipping. In disconcert 01 its clear that ups and downs of shipping demand is also proportionable to world trade. There are 03 different aspects of the world economy that may bring about change in the demand for sea transport ,which are- The chore Cycle The business cycle lays the foundation for freight cycles. Fluctuation in the rate of economic growth work through in to the sea borne trade, creating a cycle pattern of demand for ships. For example, two major recession in shipping business in 1975 and 1981-1983 ,which co-incited with the recession of the world economy.This economic cycles arise from a combination of external and internal factors. The external factors include events such as wars or sudden changes in trade good prices such as crude oil, which cause a sudden change in demand. Internal factors refer to the dynamic structure of the world economy itself, which it is argued, leads naturally to a cyclical rather than elongate growth path. Five of the most common business cycles are- I. The Multiplier and accelerator The main internal mechanism which creates cycles is the interplay between consumption and investment.II. Time-lags The delays between economic finish and their implementation can make cyclical fluctuation more extreme. The shipping markets provides and excellent example for thi s. During a shipping market prosper, ship owners order ships that are not delivered until the market has gone into recession. When the arrival of the new ships at a time when there is already a surplus, further discourages new ordering barely at the time when shipbuilders are running out of work. The result of their time lags is to make booms and recession more extreme and cyclical. III.Stock construct It produces sudden conk out of demand as industries adjust their stocks during the business cycle. On several occasion shipping boom have been driven by short-term stock building by industry in anticipation of future shortage or price rises. Examples are the Korean war in 1952-53, the dry cargo boom of 1974-75, mini tankers boom in 1979 and summer 1986. Tanker booms were caused by temporary stock building by the world oil industry. IV. Mass psychology If tidy sum act in an imitative manner a particular trend will build up to a level where they can affect the exclusively econom ic system.Their periods of optimism and pessimism pop off self fulfilling through the medium of stock exchanges, financial booms and the behaviour of investment. V. Random shocks Random shocks such as wars, weather changes, new resources, commodity price changes, which upset the stability of economic system may contribute to the cyclical process. Its impact on the shipping market is often very punishing ,for example ,1930s depression which followed by the wall street crash of 1929. Other two aspects are The trade elasticity and The trade development cycle-which are fit to business cycle.Other factors which have very strong influence on shipping demand are Transport cost. Transport cost are an fixings in the costs of production and If transport Costs are low ,its possible for domestic commodities to be substituted for the cheaper goods supplied over great distances, which will create business opportunities for shipping. The globalisation of the world economy has reinforced the i nherent and unique internationalism and fluidity of the shipping industry, while over the same period the industry has become vastly more productive, with very much larger, faster ships and new techniques such as containerisation.By understanding and exploiting world economic activities and trade pattern along with all the other factors stated above, which are mostly controlling the shipping demand, ship owners and shipping management can achieve maximum business profit. From table one it is clear that the future growth of world trade and out put will definitely create more demand for shipping. Thus the derived demand nature of shipping demand creating huge opportunity for ship owners and shipping management to profit from the ups and downs of world trade.References1. whitepaper of DTLR on British Shipping Charting a sassy Course ,para-9,obtained from www. shipping. dtlr. gov. uk/cnc/index. html ,or menu-whitepaper, october2001. 2. Chrzanowski I, 1985, An Introduction To Shipping E conomics, Fairplay Publications. 3. Abrahamsson B J, 1980,International Ocean Shipping Current Concepts and Principal, WestView Press. 4. McConville J,1999,Economics of Maritime Tansport,p42,The Institute of Chartered Shipbrokers, Londonwww.isl.org