Business Research Impact of the Research Paper

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This comes as a dramatic turnaround from Chang's statements to the Economist only six months ago, in which he indicated that the company was preparing to scrap part of its large fleet in addition to halting orders for new ships (2009, pp. 57). The reason for this turnaround, according to Shen, is the rather rapid return to profitability that the company has seen in its Asia-European shipping routes, and an expected similar return to profits in the Asia-American routs in the coming quarters (2010). As trade once again increases, the new ships will lead to a more modern and more environmentally sound and economically efficient fleet for the Evergreen Group.

The Future of Shipping

The internal analyses of the Evergreen Group are not the only reasons for the company -- and the shipping industry as a whole -- to take heart about future prospects. Current plans underway in the United States to transfer an increasing amount of both domestic and international freight to the nation's waterways, as reported by Roxana Tiron in the recent issue of Sea Power, will not only ease congestion on the country's road- and railways and reduce carbon emissions from shipping, but will also provide new opportunities for growth in the sea-shipping industry that will likely be emulated by other countries (2010, pp. 42-4).

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In addition to the increase in trade and the return to profitability for many shipping routes noted by Shen (2010), this indicates that the Evergreen Group's decision to expand capabilities and capacity by adding new ships to their fleet could not come at a more opportune time. Especially with the price of raw materials and manufacturing still low due to the global recession (and the cost of capital still fairly low around the globe as well), increasing future profit potentials through current expenditure is highly recommended. Profitability for shipping companies is, however, also intimately tied to oil prices according to a long-term statistical analysis recently published in Maritime Policy and Management, and continued volatility in this area as well as likely increases in price as consumption picks up are causes for some concern for the company (Drobetz et al. 2010). Measured and careful growth, then, are suggested as means for capitalizing on the current economic situation; with the recession nearing an end the Evergreen Group must resume its growth strategy, but if it again outstrips true demand or its own ability to generate profits, the company could face serious financial consequences......

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