Maritime Economics & Logistics, 2004, 6, (190–192)

r 2004 Palgrave Macmillan Ltd All rights reserved. 1479-2931/04 $30.00

www.palgrave-journals.com/mel

BOOK REVIEW

The Handbook of Maritime Economics and Business. C. Th. Grammenos ed.

LLP: London, 2002
Maritime Economics & Logistics (2004) 6, 190–192.
doi:10.1057/palgrave.mel.9100103

The International Association of Maritime Economists (IAME) celebrated its

10-year anniversary in 2002. During its 10-year of existence, it has developed
into a familiar institution among maritime economists. IAME was established to
help promote the discipline of maritime economics and to facilitate the
academic exchange of ideas and findings. This was done through the official
support for two journals, Maritime Policy and Management and Maritime
Economics and Logistics and an annual conference.
It was thus very appropriate for such an academic association to underline
the occasion of its anniversary with a book of collected papers. The book is
indeed a comprehensive volume, rightfully claiming the word ‘handbook’ in its
title.
The Handbook contains 39 chapters, by 51 authors, from 30 universities in
17 countries. Topics are grouped into 11 sections:

 Shipping economics and Maritime Nexus (on globalisation)

 International seaborne trade
 Economics of shipping markets and shipping cycles
 Economics of shipping sectors
 Issues in liner shipping
 Economics of maritime safety and seafaring labour markets
 National and international shipping policies
 Aspects of shipping management and operations
 Shipping investment and finance
 Port economics and management, and
 Aspects of international logistics
These topics cover virtually all the issues that currently engage maritime
economists. Most of these maritime economists are authors of individual
chapters. In that respect, the Handbook is a snapshot of the research agenda in
2002.
As a token of 10 years of research in the discipline of maritime economics,
however, a Handbook should be more than that; it should be a guideline
 Book Review
191

for future research. Whether the book is a ‘looking glass’ for the issues
maritime economists will be working on in the next 10 years, is more difficult to
evaluate.
Taken at face value, the Handbook seems to contain a number of chapters
that could be considered as the respective authors’ favourite topics. These
authors have been writing about these topics for years, and the chapters that
result from this are state of the art descriptions rather than frontiers of research.
There are some mitigating circumstances for this. The invitations to
contribute chapters to the book were sent out in the year 2001, when there was
also a very well-attended IAME conference in Hong Kong, as well as the tri-
annual World Conference on Transport Research in Seoul, Korea. It was
inevitable, therefore, that not all contributors to the Handbook were able to
come up with an original contribution in the frontiers of maritime economics.
When looking a bit closer, however, the Handbook does contain a number
of topics that I think are indeed frontiers of research. One such topic is
‘Maritime Industry and Globalisation’. The chapter by Shashi Kumar and Jan
Hoffmann, called ‘Globalisation: the Maritime Nexus’ is a good example of the
renewed interest in international maritime transport from the perspective of
international trade, and the impact of international trade on maritime business:
the position of shipping in global supply chains, specialisation of maritime
countries, safety at sea, the role of seafarers, and so on. This topic will only
increase in relevance in the coming years. Many maritime nations are worrying
about the control of their shipping industry when so many elements of a
shipping operation become international: technical management, labour force,
finance, shipbuilding, and clientele. This will eventually require a redefinition
of what a maritime nation or a national fleet is.
Another example is the application of modern finance tools to shipping as it
is investigated in Helen Bendall’s chapter on real options to evaluate maritime
investments. Ship finance analysis has moved on from net present value
analysis to much more sophisticated tools. Some of these tools and analyses,
such as the sophisticated ARCH and GARCH time-series models, were already
introduced into the maritime industry. In the finance industry, new tools are
developing quickly, and maritime economists have to work hard to keep up. On
the other hand, given that shipping is such a capital intensive and highly
uncertain environment, it is a very suitable alternative playing ground for
finance analysts who are bored with stocks and bonds. The increased interest
in, for instance, real options theory, was also very apparent at the recent IAME
2003 conference in Pusan, Korea, where a significant number of papers
addressed various applications of real options theory in shipping.
Finally, the Handbook contains a number of contributions on the
relationship between shipping and logistics. These chapters do not only
Maritime Economics & Logistics
 Book Review
192

emphasise the increasing importance of the area Maritime Economics and

Logistics, but also offer some interesting thoughts. The chapter by Trevor
Heaver on developments in supply chain management and the impact on liner
shipping provides exactly the right context to evaluate developments in liner
shipping, such as vertical and horizontal integration. The same holds for mode
choice, which is addressed in a chapter by Kunio Miyashita.
Ernst Frankel, in his chapter, elaborates on the topic of non-transport
logistics costs. He argues that these can be more than 50% of door-to-door
costs, and should therefore not be ignored. After estimating total logistics costs
in the transport chain, he continues to discuss modern e-logistics developments
that can help to reduce such costs. In this way, the chapter introduces the
justification for investigating modern information and communication technol-
ogy in shipping. This is a topic that is severely lacking in attention from
maritime economists. Lauri Ojala and David Menachof take Frankel’s
discussion further in the very last chapter in the Handbook. They discuss state
of the art information technology and the way it is applied in logistics and
maritime business. They also discuss the case of Port@Net, the Finnish port
community system. Such community systems are becoming more and more
common, and many international shipping companies will be making use of
such facilities in their ports of call.
With these chapters, the Handbook of Maritime Economics and Business
has presented some challenging developments that are in need of further study
from both maritime economists and academics in other disciplines. I would
even argue that many of these modern topics require the cooperation between
academics from different disciplines to attain real insight into how the maritime
business is changing and adapting to new circumstances. This would allow
maritime economists to work together with shipbuilding engineers on
innovative ship design, with psychologists and sociologists on the profiling of
seafarers, and so on. The results of these efforts may form the content of the
next Handbook.

Albert W Veenstra Center for Maritime Economics & Logistics (MEL), Erasmus
University Rotterdam, The Netherlands.

Maritime Economics & Logistics