Shipping Companies Chartering Business Financial Decision-making Research

Besides the transportation by owned ships, shipping companies should actively develop affreightment businesses, so as to adapt various transportation demands of different cargo and trade contracts, and to rationally utilize ocean ships' transportation capacity for the maximal economic profits. Affreightment is one of the main businesses in international shipping market from the beginning. It is the base and the concrete way to develop tramp-shipping services, and is also the way of assigning ships for ship runners. At present, voyage charter, time charter, dimise charter are the familiar affreightment businesses, and now finance lease is springing up. This paper is mostly researching the financial decision-making of these affreightment businesses.At first, the paper is defining these affreightment businesses and dividing them into two types: hire-transportation and property leasing. The type of hire-transportation includes voyage charter and time charter. The type of property leasing include dimise charter and finance lease. This paper firstly discusses those four affreightment businesses' concepts and characteristics, and emphasizes the question of apportionment of expenses so as to convenience the research later.Afterwards this paper explains some financial elements relation to affreightment businesses, concretely dividing into shipping income and shipping cost. Shipping income is analyzed according to various affreightment businesses. Shipping cost includes of capital cost, dealing cost and voyage variable cost.Then the paper comes to its main point: the theory and method of financial decision-making of shipping company's affreightment businesses. This part is also analyzed according to the two types: hire-transportation and property leasing. It is put forward to the models of financial decision-making of each affreightment businesses and between the same types. Further more, it is given examples to each model. In addition, some influencing factors are put forward when making decision.Chen Chen (Accounting) Directed by Pr. Shao Ruiqing...