7 issues are likely to be more important.This means that decisions that are operational for an independent owner may be tactical for an oil company,and decisions that are tactical for an independent owner may be strategic for an oil company.As an example,an oil company may decide at the strategic level to use its ships only to carry its own oil,and not to offer them in the charter market.The fact that the function of an oil company's tanker division is mainly to satisfy the company's transport requirements(rather than make a profit in the market)means that the behavior of an oil company in the market will generally be quite different from that of an independent owner. Optimizing the utilization of an oil company's tanker fleet to transport its own oil is an area where important tactical decisions are made.These may include both the matching of vessels to specific shipping requests,and the routing and scheduling of these vessels. The situation in the drybulk market is similar with that in the tanker market.An additional type of decision however is important here,and involves the commodity,which the ship will carry.The drybulk market is less homogeneous than the tanker market in that it involves bulk cargo as diverse as coal,ores,grain,and others.With some exceptions,a ship may be used in many of these diverse trades,and exactly how this should be done becomes an important decision.This decision is more pronounced for OBO carriers (ore/bulk/oil),which can,in addition to the drybulk market,also trade in oil.Since this decision depends on the state of the various markets for the relevant commodities,it is a tactical type of decision and may also involve routing considerations. The second major component of the shipping market,the liner market,is organized along very different lines.It is natural therefore to expect different kinds of decisions.Indeed, one of the prime decisions facing a liner cartel(or conference)is how to set freight rates for the various commodities it carries.Traditional cartelization means that rates are set uniformly (ie are the same for all members of the cartel).The cartel then"charges what the traffic can bear".This means that on a $/ton basis there can be wide disparity among rates for commodities being carried on the same ship for the same trip.Liner market ratemaking is therefore a major type of decision,and a strategic one for that matter. Another strategic decision for each member of a shipping conference is the selection of routes that will be served,of the schedules that will be followed,and of the shipping capacity that will be placed on those routes.Service (as opposed to price)competition in the liner market means that decisions such as frequency of service and operating speed are very important. The advent of intermodal services (door-to-door or around-the-world)has introduced new kinds of services in the liner market.A detailed description of these services is beyond the scope of this report.However,it is obvious that important types of decisions are involved: these range from marine terminal management to intermodal network design,from intermodal rate-making to control of flow of empty containers,and from intermodal routing to schedule coordination across different modes(ship/rail or ship/road). As a general rule,in the liner market many more decisions are strategic in nature than in the charter market.This is due to the fact that many more costs in the liner market are fixed costs as opposed to variable.Of course,decisions on maintenance and replacement,management of stores and supplies etc.Are very similar in nature to their counterparts in the charter market.7 issues are likely to be more important. This means that decisions that are operational for an independent owner may be tactical for an oil company, and decisions that are tactical for an independent owner may be strategic for an oil company. As an example, an oil company may decide at the strategic level to use its ships only to carry its own oil, and not to offer them in the charter market. The fact that the function of an oil company's tanker division is mainly to satisfy the company's transport requirements (rather than make a profit in the market) means that the behavior of an oil company in the market will generally be quite different from that of an independent owner. Optimizing the utilization of an oil company's tanker fleet to transport its own oil is an area where important tactical decisions are made. These may include both the matching of vessels to specific shipping requests, and the routing and scheduling of these vessels. The situation in the drybulk market is similar with that in the tanker market. An additional type of decision however is important here, and involves the commodity, which the ship will carry. The drybulk market is less homogeneous than the tanker market in that it involves bulk cargo as diverse as coal, ores, grain, and others. With some exceptions, a ship may be used in many of these diverse trades, and exactly how this should be done becomes an important decision. This decision is more pronounced for OBO carriers (ore/bulk/oil), which can, in addition to the drybulk market, also trade in oil. Since this decision depends on the state of the various markets for the relevant commodities, it is a tactical type of decision and may also involve routing considerations. The second major component of the shipping market, the liner market, is organized along very different lines. It is natural therefore to expect different kinds of decisions. Indeed, one of the prime decisions facing a liner cartel (or conference) is how to set freight rates for the various commodities it carries. Traditional cartelization means that rates are set uniformly (ie are the same for all members of the cartel). The cartel then "charges what the traffic can bear". This means that on a $/ton basis there can be wide disparity among rates for commodities being carried on the same ship for the same trip. Liner market ratemaking is therefore a major type of decision, and a strategic one for that matter. Another strategic decision for each member of a shipping conference is the selection of routes that will be served, of the schedules that will be followed, and of the shipping capacity that will be placed on those routes. Service (as opposed to price) competition in the liner market means that decisions such as frequency of service and operating speed are very important. The advent of intermodal services (door-to-door or around-the-world) has introduced new kinds of services in the liner market. A detailed description of these services is beyond the scope of this report. However, it is obvious that important types of decisions are involved: these range from marine terminal management to intermodal network design, from intermodal rate-making to control of flow of empty containers, and from intermodal routing to schedule coordination across different modes (ship/rail or ship/road). As a general rule, in the liner market many more decisions are strategic in nature than in the charter market. This is due to the fact that many more costs in the liner market are fixed costs as opposed to variable. Of course, decisions on maintenance and replacement, management of stores and supplies etc. Are very similar in nature to their counterparts in the charter market