Factors affecting the dynamics of yield premia on shipping seasoned high yield bonds

This paper investigates factors that can explain the dynamics of yield premia on seasoned high yield bonds of shipping companies. Our analysis utilises 40 seasoned high yield bonds offered by 32 shipping companies between April 1998 and December 2002 and a set of microeconomic, macroeconomic and, industry related factors. Our model suggests that the dynamics of credit premia of seasoned shipping high yield bonds can be explained by: credit rating; term-to-maturity; changes in earnings in the shipping market, as well as in the yield on 10-year Treasury bonds; and the yield on the Merrill Lynch single-B index.     

An stated preference analysis of Spanish freight forwarders modal choice on the south-west Europe Motorway of the Sea

This paper aims to contribute towards the design of effective freight transport policy by means of empirical analysis. In order to do so, a stated preference survey is undertaken to model the modal choice between door-to-door road transport and short sea shipping in the Motorway of the Sea of south-west Europe. The proposed analysis will provide policymakers with the necessary tool to identify the critical areas that should be addressed by future policy action in order to boost short sea shipping on Spain's Mediterranean coast. By applying the proposed method, we will be able to obtain estimates of the subjective values of transport attributes – value of time, value of reliability and value of frequency – in freight transport, values for which barely any empirical evidence on a national scale exists. Quantifying such values is a key part of the cost benefit analyses performed when evaluating transport projects.     

Determinants of spreads on new high yield bonds of shipping companies

This paper investigates determinants of pricing of new high yield bond offerings of shipping companies. New high yield bond offerings issued by shipping companies in the US market, during the period 1993–1998, are used in the investigation. The empirical results suggest that credit rating is the major determinant of the price spread of the bond offerings. Financial leverage and shipping market conditions also account for a significant part of the price variability.     

Dynamic volatility spillovers across shipping freight markets

This paper examines the existence of dynamic volatility spillovers within and between the dry-bulk and tanker freight markets by employing the multivariate DCC-GARCH model and the volatility spillover index developed by Diebold and Yilmaz (2012, 2009). This methodology is invariant to ordering the variables when estimating a VAR model and allows for the disaggregation of volatility spillovers in total, directional, net and net pairwise. Results reveal the existence of large time-varying volatility spillovers across shipping freight markets, which are more intense during and after the global financial crisis.     

An equilibrium price model of spot and forward shipping freight markets

We focus on non-storability, a characteristic of shipping freight that leads to an enormous gap between the widely-used no-arbitrage pricing theory and shipping freight derivative markets. Our main contribution is to modify and generalize the Bessembinder and Lemmon (2002) model. Equilibrium spot and forward price formulae are derived in a shipping freight market where shipowners, charterers, and speculators are non-homogeneous. From our formulae, we also obtain the properties of the forward risk premium and an optimal hedge ratio. In addition, we use the model to quantify the risk attitude of market participants.     

The determinants of credit spreads changes in global shipping bonds

This paper investigates whether bond, issuer, industry and macro-specific variables account for the observed variation of credit spreads’ changes of global shipping bond issues before and after the onset of the subprime financial crisis. Results show that conclusions as to the significant variables of spreads depend significantly on whether two-way cluster-adjusted standard errors are utilized, thus rendering results in the extant literature ambigious. The main determinants of global cargo-carrying companies’ shipping bond spreads are found in this paper to be: the liquidity of the bond issue, the stock market’s volatility, the bond market’s cyclicality, freight earnings and the credit rating of the bond issue.     

The dynamics between freight volatility and fleet size growth in dry bulk shipping markets

This paper studies the relationship between the time-varying volatility of dry bulk freight rates and the change of the supply of fleet trading in dry bulk markets. An abundance of research has been done to understand the time-varying characteristics of freight rate volatility, yet few have discussed the determinants of freight volatility. We therefore examine freight volatility against the changes in fleet size and other shipping market variables over January 1973–October 2010. The study employs a two-step model specification. The first step is the measurement of freight rate volatility through an AR-GARCH model; the second step is the analysis of the relationship between freight rate volatility and fleet size growth through a GMM regression. We confirm similar findings in the literature that freight rate volatility is time varying. Furthermore, the results reveal that the change in fleet size positively affects freight rate volatility, while the spot rate volatility of Capesize dry bulk exhibits a stronger reaction to the change in fleet size. The results of this study contribute in a general sense to understanding the systematic risk of shipping markets.     

全国煤炭交易中心运营模式研究

全国煤炭交易中心的设立对规范我国煤炭交易市场规则、实施能源宏观调控、提升我国煤炭国际定价话语权具有重要意义。在分析全国煤炭交易中心功能定位和业务的基础上,设计中长期合同邀约、现货挂牌、现货竞价、现货招投标4种交易模式及业务流程,提出依托国家重大战略争取政策支持、加强各方沟通完善综合物流体系、建立银企合作机制与信用体系、完善煤炭交易中心协调机制、增强信息服务与风险防控能力等对策建议。研究成果对优化煤炭供给结构、规范煤炭交易市场和保障国家煤炭能源安全提供了支撑。     

The effect of high fuel costs on liner service configuration in container shipping

For shipping activities, not least container shipping, bunker fuel is a considerable expense. In the last 5 years, bunker prices have risen considerably. An increasing bunker price in container shipping, especially in the short term, is only partially compensated through surcharges and will therefore affect earnings negatively. This paper deals with the impact of increasing bunker costs on the design of liner services on the Europe–Far East trade. The paper assesses how shipping lines have adapted their liner service schedules (in terms of commercial speed, number of vessels deployed per loop, etc.) to deal with increased bunker costs. The paper also includes a cost model to simulate the impact of bunker cost changes on the operational costs of liner services. The cost model demonstrates for a typical North Europe–East Asia loop that the current bunker prices have a significant impact on the costs per TEU even when using large post-panamax vessels. The model also shows shipping lines are reacting quite late to higher bunker costs. The reasons that explain the late adaptation of liner services relate to inertia, transit time concerns, increasing costs associated with fixing schedule integrity problems and fleet management issues.     

Capital structure decisions of globally-listed shipping companies

Debt capital has traditionally been the most important source of external finance in the shipping industry. The access that shipping companies nowadays have to the capital markets provides them with a broader range of financing instruments. As such, this study investigates the determinants of capital structure decisions using a sample of 115 exchange-listed shipping companies. We test whether listed shipping companies follow a target capital structure, and we analyze their adjustment dynamics after deviations from this target leverage ratio. When compared with industrial firms from the G7 countries, shipping companies exhibit higher leverage ratios and higher financial risk. Standard capital structure variables exert a significant impact on the cross-sectional variation of leverage ratios in the shipping industry. Asset tangibility is positively related to corporate leverage, and its economic impact is more pronounced than in other industries. Profitability, asset risk, and operating leverage are all inversely related to leverage. There is only weak evidence for market-timing behavior of shipping companies. Because demand and supply in the maritime industry are closely related to the macroeconomic environment, leverage behaves counter-cyclically. Using different dynamic panel estimators, we further document that the speed of adjustment after deviations from the target leverage ratio is lower during economic recessions. On average, however, the capital structure adjustment speed in the maritime industry is higher compared with the G7 benchmark sample. These findings indicate that there are substantial costs of deviation from the target leverage ratio due to high expected costs of financial distress. Our results have implications for shipping companies’ risk management activities.     

Shipping efficiency comparison between Northern Sea Route and the conventional Asia-Europe shipping route via Suez Canal

The continuous retreat of Arctic sea ice and seemingly appealing cost competitiveness of transarctic shipping routes are expected to boost shipping activities in the region. However, in reality, the number of Arctic transits remains meagre compared with major shipping routes. This study first develops a profit estimation model for containership sailing from an original port to a destination port with multiple port calls and a cost estimation model for oil tanker sailing from an origin port to a destination port. The authors then proceed to compare the shipping efficiency between the Northern Sea Route (NSR) and the Asia-Europe shipping route via Suez Canal by using the developed models and real shipping operational data. The results demonstrate that NSR shipping is not economically favored compared to traditional one in container shipping, but may be only appealing to small or medium-size tanker operators.     

A strategic network choice model for global container flows: specification, estimation and application

Container flows have been booming for decades. Expectations for the 21st century are less certain due to changes in climate and energy policy, increasing congestion and increased mobility of production factors. This paper presents a strategic model for the movement of containers on a global scale in order to analyse possible shifts in future container transport demand and the impacts of transport policies thereon. The model predicts yearly container flows over the world’s shipping routes and passing through 437 container ports around the world, based on trade information to and from all countries, taking into account more than 800 maritime container liner services. The model includes import, export and transhipment flows of containers at ports, as well as hinterland flows. The model was calibrated against observed data and is able to reproduce port throughput statistics rather accurately. The paper also introduces a scenario analysis to understand the impact of future, uncertain developments in container flows on port throughput. The scenarios include the effects of slow steaming, an increase in land based shipping costs and an increased use of large scale infrastructures such as the Trans-Siberian rail line and the opening of Arctic shipping routes. These scenarios provide an indication of the uncertainty on the expected port throughputs, with a particular focus on the port of Rotterdam in the Netherlands.     

铁路退票险费率计算模型构建研究

旅客在办理退票业务时铁路收取阶梯退票费,所退票额可能无法再次售出,对旅客和铁路双方都存在潜在风险。铁路退票险是一种较好的保险服务,能够分担旅客退票和铁路客运资源在合同约定履行期间内的违约风险,创新客运主营业务服务。借鉴交通运输行业的非寿险费率计算方法,构建铁路退票险费率计算模型。通过分析退票业务,识别退票险影响因素,计算退票险费率,进行退票险知识库闭环管理,研究结果表明依据广义线性模型方法计算的纯保费与传统法差别不大,但可以节省较多的时间,因而使用广义线性模型方法计算铁路退票险费率更为合理有效,有助于加快铁路退票险费率的出台。     

Systematic risk behavior in cyclical industries: The case of shipping

This study explores macroeconomic and industry-level effects on corporate systematic risk (or beta) for the international shipping industry. We document the extent to which stock market betas fluctuate over time in this asset-intensive and cyclical industry. Moreover, we analyze the fundamental determinants of systematic risk. We find evidence for high levels of systematic risk in shipping stocks, which match the fundamental risk characteristics of the industry (such as high financial and operating leverage). Shipping firms exhibit distinct industry-specific beta dynamics compared to firms from benchmark sectors or the average firm in the S&P 500 index. Changes in both economic conditions and industry-specific risk factors explain large proportions of beta variation in the cross-section of firms and over time.     

Hub-and-spoke network design for container shipping along the Yangtze River

Increasingly large, high-tonnage containerships are becoming a common sight on the Yangtze River, and the shipping network is being transformed accordingly. This paper reports the design of a hub-and-spoke network for a shipping company that is consistent with the characteristics of the Yangtze River. We first explore the economies of scale for container shipping by applying empirical data. Next, we propose a mixed-integer linear programming model, factoring in ship-operating and container-handling costs. We then conduct a numerical experiment and test the effectiveness of the model, and finally discuss the implications of hub-and-spoke shipping network design. The findings reported herein support the trends toward cargo concentration and port regionalization along the Yangtze River.     

Simultaneous optimization of schedule coordination and cargo allocation for liner container shipping networks

A liner container shipping carrier usually collects immediately-delivered goods that are produced by manufacturers in world factories, and transports the products to worldwide market destination by offering weekly shipping service. In practice, the carrier has to consider extra demurrage cost of containerized cargos incurred from waiting for weekly shipping service at ports. In this paper, we develop a mathematic programming model to maximize the carrier’s profitability by simultaneously optimizing the ship route scheduling and interrelated cargo allocation scheme. The nonlinear optimization model is transformed into an equivalent mixed-integer linear program, and its applicability is demonstrated by a case study.     

Cooperation through capacity sharing between competing forwarders

In this paper, we consider a shipping system consisting of one carrier and two shipping forwarders who compete on price for businesses from potential shippers. The carrier may quote different prices or a single price to the two shipping forwarders who will then order shipping capacity from the carrier and set the selling prices to the shippers before market uncertainties are revealed. Inspired by cooperation between competing parties in many industries including the maritime shipping industry, we propose a new model under which the shipping forwarders are allowed an opportunity to purchase shipping capacity from each other after they order capacity from the carrier but before they set the selling prices and satisfy demand, referred to as the capacity reservation model. We show analytically that capacity reservation between competing forwarders benefits both the carrier and the forwarders, leading to a win–win situation under various market conditions. Furthermore, capacity reservation can offset the negative effect of a carrier’s pricing power which enables the carrier to charge discriminatory shipping prices to squeeze more profits out of the forwarders.     

Sailing speed optimization for container ships in a liner shipping network

This paper first calibrates the bunker consumption - sailing speed relation for container ships using historical operating data from a global liner shipping company. It proceeds to investigate the optimal sailing speed of container ships on each leg of each ship route in a liner shipping network while considering transshipment and container routing. This problem is formulated as a mixed-integer nonlinear programming model. In view of the convexity, non-negativity, and univariate properties of the bunker consumption function, an efficient outer-approximation method is proposed to obtain an ε-optimal solution with a predetermined optimality tolerance level ε. The proposed model and algorithm is applied to a real case study for a global liner shipping company.     

Environmental governance mechanisms in shipping firms and their environmental performance

A growing number of shipping firms seek to improve their environmental performance in the hope of developing environmentally sustainable shipping operations. Although environmental governance plays an essential role in leading shipping firms to improve their environmental performance, there is scant knowledge on the relationship between environmental governance and environmental performance in the shipping literature. We propose and empirically validate an integrated model to study how various environmental governance mechanisms (i.e., contractual, relational, and organizational) are enacted by shipping firms and their influence on shipping firms’ environmental performance. Our study also examines the mediating roles of the relational and organizational mechanisms on shipping firms’ environmental performance.     

Liner hub-and-spoke shipping network design

This paper proposes a liner hub-and-spoke shipping network design problem by introducing the concept of a main port, as well as some container shipping constraints such as multi-type container shipment and transit time constraints, which are seldom considered in the previous studies. It develops a mixed-integer programming model with nonconvex multi-linear terms for the proposed problem. An efficient genetic algorithm embedded with a multi-stage decomposition approach is developed to solve the model. Numerical experiments are carried out to assess the effectiveness of the proposed model and the efficiency of the proposed algorithm.