| dc.description.abstract | In 2008, Vale, the Brazilian mining giant signaled a significant transformation in the dry bulk shipping industry. The firm ordered the biggest vessels, ever constructed, called the Valemaxes (400,000 tons deadweight) to transport its iron ore from Brazil to China. The destination between these countries is far and in comparison with the company’s big Australian competitor costlier. Vale needed to cut its transportation cost and one solution was the economies of scale in ship size. Constructing bigger vessels with twice the transporting capacity of the traditionally chartered Capesize vessels can provide significant cost reduction. This strategy raised fears of monopolistic attempts over this route resulting in a ban by the Chinese authorities leading to Vale’s shipping cost increase. This paper, analyzes the operational and economic aspects of the fleet of Valemaxes and attempts to find out the formation of the transportation cost after the imposition of the unexpected ban. | nb_NO |
