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Economics. Transport. 2 . Railway, sea transportin the World and Lithuania

 

RAILWAY TRANSPORT MAINTENANCE EXPENSES

    The plan for maintenance expenses is made on the basis of transportation plan, means of transportation work plan and other sections of railway maintenance. The plan foresees the supply of the necessary salary fund for the planned transportation volume, the expenses for materials, fuel, electricity and other expenses, based on the increase of work productivity and transportation costs reduction tasks.
The following expenditure elements make the railway maintenance expenses: work salary, social security deductions, fuel, electricity, material expenditures, amortization deduction and other expenses.
    The expenses are divided into main and joint, direct and indirect, dependant and non-dependant upon the traffic volume.
    Main expenses – expenses directly related to the process of transportation (production), joint expenses – expenses for serving the production and managing the economy.
    Main expenses fall into expenses that are specific for each economy branch and expenses that are common for all economy branches. E.g. specific main expenses for carriages park – expenditure for the current and depot passenger and load carriages repairs, etc.
The main expenses, common for all the branches of railway economy are also assigned to the following expenses: additional work salary of productive personnel, i.e. work salary for the time that has not been spent working, but is to be paid according to the law: vacation payment, leave allowance (in a case of dismissal), social security deduction for productivity personnel.
Main railway expenses make 91% at an average, joint expenses – 9%, (2% out of the joint expenses are meant for management maintenance) out of the total transportation expenses.
Direct expenses – expenses that are assigned to different kinds of production and distributed according to the kinds of production or work according to additional calculation. E.g. road economy expenses can not be assigned only to passenger or loads transportation due to the reason that road transport serves both – passenger and road traffic. The above-identified expenses are distributed between passengers and loads transportation in proportion to the corresponding indices.

RAILWAY TRANSPORT CIRCULATING MEANS


    The structure of circulating means depends upon the peculiarities of the productive process, nature of work, level of technical support, form of productivity organization. The part of circulating means in the roads productivity funds make less than 2%.
    The main part of the limited circulating means in railway transport (more than 97-98% of the total) are the means within production sphere.

WATER TRANSPORT ECONOMICS. SEA TRANSPORT EXPENSES ELEMENTS


    The owner of the loads needs a very exact calculation and estimation of the transport expenses elements and co-ordination of the transport service the way, which enables to achieve the best results.

TRANSPORTATION EXPENSES CONCEPTION

    The main expenses may be treated as production value factor, which requires service. These are port work, tugboats, containers, fuel, etc.
Loads owners need to draw attention at the expenses, they can control directly by themselves. They should also themselves estimate the importance of the expenses that are indicated by the ship owners. In case there’s no competition in linear transportation, it is more useful for the ship owner to increase the prices for the services in order to cover the expenses than to improve the effectiveness of the services.  

PRODUCTION AND TRANSPORTATION EXPENSES

    Load transportation expenses will have a direct impact on the end user product price, i.e. CIF (cost, insurance and freight, freight – transportation price, which is set at each moment of agreement before transportation between transportation provider and the customer.)
    When transporting the products, the capital will remain frozen for the period of transportation. It means, that transport creates part of the capital expenses, which are calculated as capital interest loss. Long transportation of expensive products will result in a considerable interest loss.
    In case CIF prices and production expenses remain stable, the transportation expenses have a direct impact on the load owner’s revenue. In case transportation expenses increase, CIF price will depend on the demand for the production and competition between the products of the same kind.

Summary of seas transport expenses

Seas transport uses the following equipment and structures: load control equipment, stores, ships, channels, ports and etc. The use of the above-described property depends on the specialization of production, but on the whole, there are common physical and periodical compensation requirements. In case there is a desire to provide navigation services, the owners of the load and fleet company does not need to own the above enumerated property. The owner of the load or ship, entering the port of sailing across the channel pays taxes, tug taxes and etc. which becomes circulating means; thus contributing to maintenance and repairs of the ports and channels property.
The creation of sea transport services provision base requires the supply of tug ships, trains, ships with fuel and other maintenance materials: spare parts, water reserve, etc. The same way certain working power should be employed: dock employees, agents, members of ship crew and navigation personnel members.
Owners of the ship rents or buys land with an intention to build the necessary sites for products loading and storage.
Use of the land frequently turns into circulating means for owners of the load and independent fleet companies, as they are forced to pay considerable sums in the form of security and port taxes. From the economical point of view this kind of expenses come from rent. Fleet companies pay taxes to the port according to the tariffs or another form, and work expenses are conformed according to the ship arrival to the port, staying in the port and departure from the port circumstances.
Ship owners have expenses of their own, which they are apt to transfer for the owners of the load, as they are users of their services. Expenses according to sea transportation services factors can be classified in the following way:
  • Capital expenses
  • Expenses for fuel and other maintenance materials
  • Work expenditure
  • Use of land

SEA TRANSPORT ORGANIZING AND LOAD OWNER’S EXPENSES

    Next to freight payment, load owner experiences additional expenses while transporting the products from the sending off point to the delivery point. This covers the following expenses:
 
  • Packaging expenses
  • Road transport and railway expenses
  • Port divisions expenses
  • Capital products expenses during the transportation
 
    Sea transport can be divided into two forms of activity according to the functional indications: charter navigation and linear navigation.
Charter – the agreement of ship freighting, which indicates both parties of the agreement, the sum of freight, the ship, the load, the loading port and the destination port. Charter services are applied for the following products: grain, coal, fertilizer, oil, concrete, metal, wood, sugar, etc. There are several kinds of charters:
  • Travel charter – freight valuations reflect the distance of the travel, type of the load, the planned transportation expenses, the suitability of certain ships, i.e. the conditions of the market. The sum of the freight is paid when the transport arrives at the port of destination.
  • Time charter   - freight valuations reflect the duration of the ship usage. Usually the freight sum is paid according to deadweight, e.g. the payment has to be performed during a month, or a fixed sum is paid on the agreed days. 
    Linear transportation services are offered by ships according to time schedule that has been formed in advance and the shortest period being that of a quarter. Every user pays valuation set according to the volume, weight or value of the load. Linear ships mostly carry valuable products: tea, coffee, cacao, tobacco, cotton, machinery and equipment also manufactured goods, etc. In case ships that belong to several countries are serving the line, such a line is called a conference line.
Linear transportation freight expenses include loading/unloading expenses of the cargo as well as storage expenses.
Owner of the load may suffer the following expenses:
  • Packaging
  • Loading of the products
  • Transportation to the terminal
  • Unloading the products from the local transport to the terminal
  • Moving the products to the hangar of the terminal and loading it there
  • Storage in the terminal
  • Expedition and making use of the intermediary agents services.
    All the above mentioned expenses should be included in the freight valuation.

MULTIMODAL TRANSPORTATION

Multimodal transportation is performed under a single load document, which means, that the carriers’ responsibility for the expenses begins as soon as the ship reaches the embankment of the port. Whereas traditionally transporting a load the ship owner only bears the responsibility for the transportation.  Multimodal transportation is superior to the rest of transportation in the case when ships loaded from the land and when the loads are connected transport loads. Containers prevail in the multimodal transportation.

SEA TRANSPORT PRODUCTIVITY

     All the chain parts of transportation are important for the total transportation expenses. Productivity may be described by comparing the total quantity of the produced products to a single piece of production.  Navigation production – material wealth factor, which is used for provision of the transportation work in the following forms: work by ship crew and port employees, investment capital for ships and ports, insurance, as well as land used for ports. Sea transport productivity in respect to the expenses may be measured in the following ways:
  • Expenses used for the transportation of a single ton for a given distance
  • Expenses of a single tone deadweight
  • Expenses for a single tone – mile
  • Expenses of a single working day of the ship
  • Expenses of a single ship travel
  • Door to door transportation expenses

REPAIRS AND TECHNICAL SERVICE

    Repairs and technical service expenses cover the repairs of the ship’s hull, machinery and equipment repairs, technical service including classified expenditure: spare parts, maintenance materials for the repairs, repairers’ salary, etc. Each ship must posses a certificate issued by an independent organization related to the quality of the ship’s design and construction as well as suitability to sail across seas and oceans. This certificate also serves as a permission to visit different ports and receive insurance.
    Ships must be presented for periodical inspection. It may be performed in the sea or in the dock each 24 months or more frequently. Special inspection must me performed each 4 years – all the above enumerated means allow to prolong the lifetime of the ship.
    The ship crew performs certain technical service, especially when the ship is in the sea, but the expenses of the crew are not included to the service expenses. Therefore, increasing the effectiveness of the ship and decreasing the number of the crewmembers may result in the decrease of TS expenses. In order to avoid this a technical team of workers is employed, which performs TS while the ship sails in the sea or stays in the port.

PORT DUTY

     Upon entering a port a ship experiences the following expenses: port taxes, maintenance and fuel expenses.
    The prevailing port tax types in the world market:
  • Anchoring, fastening the ship to the embankment, usage of the embankment equipment. The services are rated according to the registered tons, the length of the place the ship occupies, the quantity of loaded or unloaded products.
  • Security, fastening of the ships, unfastening of the ship. Rated at fixed prices
  • Port and tonnage taxes. Rated according to register tons.
  • Length tax. Rated according to the registered tons.
  • Towing tax. Rated according to the fixed prices, that is set according to the length of the ship and duration of towing.
  • Leadsman tax. Rated accordion the tonnage and ship size
  • Dock taxes, Rated according to the tonnage.
    Expenses related to the load
    Load expenses may be classified:
  • Loading, unloading expenses
  • Expenses of the right layout of the load in the ship
  • Expenses of the load transportation to the ship and from the ship
  • Load insurance expenses
  • Bonuses, fines
  • Container expenses

DISTINGUISHING FEATURES OF THE AIR TRANSPORT

Air transport, civil aviation is the youngest and rapidly developing transport branch. Lithuanian air transport carries: loads and passengers – 13,9 %, and 0.1% loads. Like the other kinds of transport, air transport have certain economical advantages, which make air transport irreplaceable in the working sphere of transport.
Below enumerated are the main advantages of air transport:
  • High technical and commercial speed. The speed appears to be much higher in comparison to any other kind of transport. Aircraft flight routes appear to be the most rapid ones.
  • Shortening of the way – certain economy of time appears not only due to the high technical speed of the aircraft, but also because of straight way, which shortens the distance in comparison to the other kinds of transport. 
  • Air transport is not dependent upon topographical conditions and rear infrastructure. Air transport can perform uninterrupted long distance flights, which makes it different from the other kinds of transport.   Flying 10 km and more above the sea level it is possible to get over all kinds of obstacles related to geographical conditions of the district, which may appear insuperable to the other kinds of transport. 
  • Rapid organization of air transport relations. Independence from the geographical conditions of the district grants the possibility to ensure a rapid organization of airlines. Besides, air transport can be distinguished because of its ability to maneuver and possibility to adopt to rapid changes of carrying volumes. Two more advantages of air transport may be singled out when carrying loads via air transport: the simplicity of packaging and comparatively small expenses for storage, as loads are transported at a higher speed and by a more safe kind of transport.
Certainly, air transport has disadvantages of its own:
  • Large transportation cost
  • Large tariffs
  • A possibility of delay due to bad weather
  • Limits for loads related to size and weight

AIR TRANSPORT EXPENSES AND REVENUE

 Revenue
  • Revenue for total transportation via regular trips: passengers, loads, pay luggage, post
  • Revenue for charter trips
Expenses (routes)
  • Fuel expenses
  • Navigation duty
  • Over-ground service duty in airports
  • Take off and landing duty
  • Stay in the airport duty
  • Other duties in foreign airports
  • Expenses for the air crew
  • Transportation expenses for special cars and service transport

MAINTENANCE EXPENSES

  • Aircraft insurance
  • Aircraft amortization
  • System of reservation
  • Civil security insurance
  • Commission sales
  • Expenses for technical service
  • Passenger service on the aircraft
  • Flying service expenses
Total expenses:
  • Other transportation expenses (cars and trucks)
  • Expenses for uniforms
  • Amortization of the main means
  • Training arranged by other aircraft companies and educational institutions
  • Labor security expenses 
  • Amortization of little value inventory
  • Maintenance and current repairs of aviation buildings
  • Advertising expenses
    Main aircraft companies’ income source is the revenue for the transported passengers, which make approximately 90 % of the total income. Revenue for passenger transpiration by regular trips makes 20% of the total income.
    Each passenger who buys a ticket pays a sum of money, which becomes the aircraft, company income.  The number of passengers and the price of the purchased tickets decide the amount of income. Tariffs and pricing policy is based on the pricing policy structure aims. The general aim of the pricing policy structure – to earn more money, thus ensuring the short and long term profitability of the aircraft.
    The following main factors that decide the pricing policy structure: behavior of the market, expenses, competition, and regulatory confirmation. 
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