Comments on: Amazing innovation in cargo ship technology – WIND powered vessels!

By: stopit

stopit — Wed, 18 Nov 2009 12:49:47 +0000

Please stop this. I realize that academic discourse is the proper way, but look at what all this thinking has done already. Stop! Please! At the core, sailing ships are better than oil driven ships aesthetically, economically and environmentally. All this economic mumbo jumbo of price elasticity (=high school economics) is absurd.

Let's cave man it for you:

Sail good for boat….uhhh…uhhh….

If you want to pose a question, do a study on the correlation between cadmium levels in halobates in the north atalntic ocean and global bauxite prices or something. Sail good, oil bad, over consumption bad, leave it be.

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By: Christopher Francois

Christopher Francois — Sun, 25 Oct 2009 00:18:23 +0000

I think that what has to be true about the price elasticity of trans-oceanic shipping is that it as to be elastic because when the big cargo ships decide to take on this technology it will decrease their dependence on oil and therfore the price to ship by sea will decrease even less than it already is. This, however will attract new people to the market and more of these cargo ships may be demanded and then therefore built. The buidling however off these new massive ships will require other resources to be used in greater quantities therfore it could have a negative effect whilst the building of the ships takes place. After the building of the ships the polution could diminish because of all the "green" boats being used.

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By: Silvia Dieter

Silvia Dieter — Thu, 22 Oct 2009 06:21:48 +0000

The price elasticity of demand for trans-oceanic shipping would be inelastic for the greenhouse gas emission to become more damaging for the environment. A cargo ship pulled by this giant kite will travel more efficiently with less need of fuel. This will decrease the general costs of trans-oceanic shipping offering an incentive to more people to enter the market. When the demand for these cargo ships with kites increases, their supply will rise likewise. I believe that trans-ocean shipping is inelastic because it is the only/cheapest way to transport products in a certain amount of time. Increasing the use of cargo ships will be worse for the environment even though they reduce the emission of greenhouse gases by an average of 20%. When there are only a few ships with 80% use of oil the overall production of greenhouse gas emissions will greatly reduce. But once there are many vessels, the greenhouse gas emissions will be worse than it is now.

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By: Sarah Eble

Sarah Eble — Thu, 22 Oct 2009 02:01:34 +0000

The price elasticity of demand has to be elastic, meaning that people respond to the fall in price in the way that the quantity supplied increases by a high coeffcient of 20%.

The emission of greenhouse gases should also be reduced by an average of 20%. But this is very unlikely because now there is more supply that has to be shipped around the world. There are more ships needed than before which will in the end increase the emission of greenhouse gases.

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By: Wow are we going backwards in our technology?

Wow are we going backwards in our technology? — Sun, 24 May 2009 05:28:43 +0000

[...] [...]

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By: Dave Barbetta

Dave Barbetta — Sun, 07 Dec 2008 16:50:51 +0000

Great Question. The price elasticity of demand would need to be less than 1.25.

A price drop of 20% would increase the equilibrium demand from Q1 to Q2. If "E" is emission and "a" is the emission coefficient, then E1 = aQ1, and E2 = 0.8aQ2 (emissions are lowered by 20%). For E1 to be > E2, then aQ1 must be > 0.8aQ2… reduce to Q1 > 0.8Q2. If elasticity "X" is % change in quantity over % change in price, then X = | [(Q2-Q1)/Q1] / [(P2-P1)/P1] |. We know % change in price is 20%, and subbing in Q1 = 0.8Q2…

X = (0.2Q2/0.8Q2)/0.2 = 1.25. So the elasticity of demand must be less than 1.25.

In layman's terms, if emissions per unit are 80% what they used to be, the increase in quantity consumed must be less than 25%, otherwise the increase in quantity would more than offset the decrease in emmissions per unit (0.8 x 1.25 = 1).

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By: Simon Strong

Simon Strong — Mon, 01 Dec 2008 17:56:17 +0000

I don't think it will increase. If companies switch from air cargo shipping to shipping by sea then I would be surprised because it already costs more to ship by air than it does by sea. Also even if shipping costs go down it doesn't necessarily mean they will ship more because companies cost shipping on a unit basis. i.e if it costs $100 dollars to ship 100 items then shipping is $1. If shipping then drops to $50 dollars for the 100 items then the company sees an increase in profits because it costs them less on a unit based shipping cost. A shift in price of shipping doesn't change the quantity demanded for a good i.e. it would not make sense for a company to increase their shipping amounts. The only thing that would change shipping is if companies drop prices to increase demand but I would be surprised just because they can keep the extra profits made from a decrease in shipping costs. So no, shipping will NOT necessarily increase.

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By: Jonathan

Jonathan — Sun, 30 Nov 2008 04:18:51 +0000

Simon, if its cheaper to ship, companies who before didnt ship their products instead used aviation and plans might consider to switch, which would increase shipping.

Yes the products are at equalibium, but wait costs go down, so companies are more willing to supply more, which leads to decrease in cost then leads to a new equalibrium — So wait shipping WILL increase

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By: Simon Strong

Simon Strong — Wed, 26 Nov 2008 03:53:27 +0000

I would actually like to disagree with the ideas of Benji and Lisa in that although shipping will be cheaper for producers which decreases their costs they will not just increase their imports. Think of it from a business prospective. When you set the price for each good you include the amount it cost you to get the good there in the first place, but only so much of a good will sell in a certain period, and it would cost a company more to hold stock in storage after having it shipped than to just order the same equilibrium amount they had been which they know they will be able to sell. So no, just because the price of their shipping goes down it doesn't mean that businesses will increase their shipping orders – that would be bad business! They have already covered their costs of shipping when they wholesale to retailers, at that moment of transaction a business has covered it's shipping costs and if they ship more than they sell then they have to find storage for the goods which costs them the extra profits they would get from the price decrease in shipping.

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By: John the Pirate - ar

John the Pirate - ar — Tue, 25 Nov 2008 07:59:04 +0000

Good post, I like your writing style! I've added http://welkerswikinomics.com/blog/ to my feed reader, and will be reading your posts from now on. Just a quick question – did you design your header image yourself, or have it done professionally? If you had it done by a professional, who was it?

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By: Lisa G

Lisa G — Fri, 21 Nov 2008 22:52:07 +0000

I see what Bastien Vogt means; it would be nice I the world would work that way, however, as Benji said, as the price of the shipping of the cheaper, as less gasoline is used, this would mean that more ships would sail the oceans using this technology as price has gone down. Basic laws of demand and supply, as the price of the ships down, more people what to buy/transport their good by ship. This means the number of ship crossing the ocean increase. I think that the Co2 emissions would go up, even though less is emitted by the ships, the number of ships crossing the ocean increase (producing more Co2 in total then was initial produced). I agree with what benji and eithan said on the elasticity on the price of the shipping.

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By: Oliver

Oliver — Fri, 21 Nov 2008 22:25:30 +0000

I personally think that this would never really work, because it will be too expensive to create, as well as too mentain.

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By: Jonathan

Jonathan — Fri, 21 Nov 2008 07:26:29 +0000

My ship solar sails reduce fuel consumption by 40 percent lol, twice as much as the 1 in this article

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By: Marc Lemann

Marc Lemann — Fri, 21 Nov 2008 05:56:47 +0000

Yes Eithan, finally someone that understands. As I already posted before, both the demand for the shipping industry and the oil and steel industry is inelastic. If this parachute technology is an "add on" to already existing vessels, it really should decrease the CO2 emissions and lower costs. And since the demand is inelastic, lower costs would not mean more vessels would be added. If anything does increase the cost of shipping and greenhouse gas emissions, it will be because vessels need to be accompanied by security ships, to fend off Somali pirates…

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By: Eithan

Eithan — Fri, 21 Nov 2008 04:55:25 +0000

In the hypothetical situation that all cargo ships in the world incorporate the sail technology, the price of shipping would decrease by 20% and greenhouse gasses emissions would fall by an average of 20%. This would not be true if the price elasticity of still were elastic. If the price elasticity of steel were elastic, supply would shift out because the quantity demanded of steel would increase. However, this is not the case. The price elasticity of steel is quite inelastic. Hence, a decrease in price will not greatly affect quantity demanded, and steel producers will not increase supply. As a result, if all cargo ships in the world were to incorporate sail technology, both the environment and steel producers would benefit.

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