The Norwegian live fish carrier fleet: Is there a mismatch between capacity, utilization & investments?
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- Master Thesis 
The Live Fish Carrier Industry is a specialized shipping segment in Norway, transporting and processing live salmon. The underlying driver for the segment is the production of salmon in aquaculture. With an absence of academic research on the topic, this thesis will try to fuse the attention from the academic society. By modeling the supply and demand of LFC operations, we observe a surplus on the demand side of the market. A turning point occurred in 2013 when the supply increased more than the demand. New, large and expensive vessels entered the market, and substantial capacity will enter in 2017. This will eliminate the demand surplus, and create a movement towards market balance. The operations of the vessels are managed by the salmon producers. Our positional tracking analysis indicates that the vessels are not utilized efficiently. The vessels are operating across a large range of regions, within a six-month period. The analysis provides grounds for an argument that large vessels, individually, are covering fewer regions than the smaller vessels. The smaller vessels are unlikely to capture long charter contracts, and consequently have to move more between regions. This operational pattern is a reason for concern, when the risk of spreading diseases is high. There are several reasons to operate in the LFC industry. From a salmon producer’s perspective, we believe that the supplied services can be looked upon as an insurance from random shocks of lice and diseases on the biomass. The value of an average cage has increased with 400% the last ten years, which consequently will increase the value of having excess LFC-capacity. From our analysis based on the Return on Shipping Investments model, the average financial return is 12.6%. We conducted a freight rate sensitivity analysis to assess the effect on NPV of a new LFC investments. The findings show that LFC owners are investing in a profitable asset, despite considerable changes in the market