How does your cargo move? (a) breakbulk

<b) dry containers (2D-foot or AD-foot?) (c) refregerated container

Cd) vessel deep tanks

(.e) others

CIO) Do you have any plans to increase your usage of container equipment in the future ?

If so, by how much and when ?

(11) Is C.S.C able to meet your present container requirements ?

If no please comment-

(12) What type of container equipment do you need ? (a) dry (20 foot or 40 foot ?)

(b) refrigerated (c) tank

(d) others

(13) Would your shipping decisions change if C.S.C were to:

(a) increase their container service ?

(b) offer specialised containers (e:q refer, open top, tank containers) ?

(14) Now I would like to get your impression on how reliable various aspects of the C.S.C.'s present container service are:

(a) Have you experienced any problems setting the equipment you need ? If so, what seem to be the major ones ?

(b) If they promise equipment do you always get it on time ?

(c) Have their schedules been dependable ?

(15) I would like to ask you a couple of questions about

your volume of traffic between the South East Asia/- Far East/continental.

(a) Can you give me some idea of your monthly volume between the South East Asia/Far East/continental

Cnumber of units/tons)?

<b> Do you anticipate that the volume will, under normal economic conditions, remain the same or decrease over the next five years ?

4 Ci> Increase

<ii) remain the same Ciii)decrease

Can you estimate the change in volume your firm expects over the next five years (per year of total) ?

(16) Is C.S.C the only carrier you use ?

If "no" what is your reason for distributing cargo among various carriers ?

(a) maintain carrier competitiveness (b) diversify risks

(c) capacity, service, or price considerations (d) other reasons

Which competing carrier(s) do you also utilize ? How does C.S.C compare to other carriers you use in terms of over all container service ?

(17) Are there any changes that C.S.C could make in their operations that might cause you to increase your use of their services ?

If so, what would be the single most important one ? Do you forsee any other developments that might cause you to change your size of the C.S.C.'s servi­ ce ?

(18) Are there any additional comment that you would like

to make ?

Thank you very much. I appreciate your taking the time to answer these questions.

Name of Firm Location

Name of Interviewee Date of Interview Appenddix B

Liner Operator Financial Planning Model Description & Documentation

Introduction

The financial planning model developed by Temple Barker & Sloane, Inc. Massachusetts to test alternative strategies for a liner companys strategic planning process is an extremely flexible tool which produces pro forma profit and loss statements, cash flow projections, capacity uti­ lisation levels, and market share positions that would occur under a variety of simulated environmental condi­ tions. In most cases, pro forma performance sensitive to change in the operating environment, such as a slower rate of escalation of freight rates, can be tested by altering only a few input lines to the model. Special features and capabilities of the model are described below.

Description

The model produces a P and L statement which displays revenues (outbound, inbound, intermediate and other ) vessel expenses, voyage expenses, operating profits, sub­ sidy, and net profit. The format in which these items are displayed is included as the Table 1, in addition, the model produces a cash flow statement (Table 2> capacity

utilization levels by cargo type (general or breakbulk cargo, dry container, reefer container, bulk cargo and reefer breakbulk) and direction (outbound and inbound), and total outbound and inbound market shares.

Inputs to the model are of two general types: market inputs(total market pay tons, market shares, freight rates and other market related items) and fleet inputs capacity by cargo type, voyage days, vessel expenses ter­ minal and equipment costs, and other vessel and voyage related items. Table 3 shows the items included in each input category, each of these items is a potential level which can be used to simulate a specific environmental or operating situation. For example a potential change in the commodity mix of the C.S.C carriage may be tested by increasing the rate of escalation of freight rates to reflect a richer cargo mix. An extensive shift in commo­ dity mix might require adjustment of the C.S.Cs market shares (by cargo type) and stowage factor as well as freight rates. ^

An extremely useful feature of the model is its division into input and calculated sections. The input reports (for both the market and the fleet) show base year inputs and escalation factors used to grow total market cargo tons and to increase freight rates and expenses. This structure allows growth rate assumptions to be shown explicitly in the model output. The calculated report shows the actual levels of these variables after the growth rates have been applied. The financial testing procedure is streamlined and simplified because the model applies the growth rates specified, saving the user from having to calculate the inputs himself.

Following in part A is a description of the model struc­ ture (model logic) which will allow the user to under­ stand the operations that are performed on the input items to arrive at the output informations shown as the financial report (ie. P and L cash flow, capacity utili­ sation and market share.

Part B describes procedures to be followed to perform some useful sensitivity tests; changes in freight rates market shares, and fleet deployment.

A Model Structure

The model description here refers to the version of the liner financial model used to test results for a number of services.

I Market Input Section Revenues

Revenue calculation requires that ten inputs be specified by the user.

I Total market annual cargo pay tons for the base year and annual growth rates

II Container penetration rates ( to separate the gene­ ral cargo market into breakbulk and container seg­ ments.^

The C.S.C.'s market shares in each cargo category IV The C.S.C.'s maximum annual potential container car-

rage in pay tons

V Stowage factors by cargo type

VI Per unit freight rates by cargo type and annual

escalation factors

VII Per unit freight rate surcharges VIII Other annual revenues (mail etc)

IX Annual capital expenditures for both vessel and equipment

X Annual corporate expenses (general administration, interest expenses, other expenses, tax rate, dis­ count rate)

II Market Input Section; Expense Calculation Expenses

Expense calculation requires that twelve inputs be spe­ cified by the user.

s

1 Per vessel capacity by five cargo types. Note that