Freight Rates in Downside and Upside Markets: Pricing of Own and Spillover Risks from Other Shipping Segments

2020 ◽  
Author(s):  
Panayiotis Theodossiou ◽  
Dimitris A. Tsouknidis ◽  
Christos S. Savva
Keyword(s):  
Freight Rates

scholarly journals Railway Efficiency in its Relation to an Advance in Freight Rates

1915 ◽  
Vol 23 (2) ◽  
pp. 128-143 ◽  
Author(s):  
Samuel O. Dunn
Keyword(s):  
Freight Rates

Profitability of the Northern Sea Route for liquid bulk shipping under post 2020 sulphur regulations

2020 ◽  
Vol 31 (2) ◽  
pp. 313-332
Author(s):  
Tuomo Keltto ◽  
Su-Han Woo
Keyword(s):  
Spot Market ◽  
The Arctic ◽  
Future Research ◽  
Estimation Model ◽  
Content Type ◽  
Freight Rates ◽  
Northern Sea Route ◽  
Financial Perspective ◽  
The Baltic ◽  
Regulation Compliance

PurposeThe purpose of this study is to evaluate the profitability of the Northern Sea Route (NSR) as a shipping lane from the financial perspective of shipping companies under post 2020 sulphur regulations.Design/methodology/approachThis study develops profit estimation model, and the profitability of the NSR is assessed for a Handymax Medium Range (MR) tanker vessel using scenarios in combination with spot market earning levels, the regulation compliance method and destination ports. The required freight rates are calculated to justify the decision of shipowners to transit a tanker from the Baltic spot market to the NSR navigation.FindingsResults suggest that the required freight rates from the Arctic trade to justify the transit to the NSR are higher than the actual agreed rates in the past, which implies low viability of the NSR as a regular shipping lane. It was also found that the required freight rates are affected by the spot market earning levels, compliance method and duration of the voyage.Research limitations/implicationsThis study takes a new approach on assessing the NSR viability by comprehensively assessing the annual profitability and including the spot market trade as an opportunity cost for the NSR shipping. Despite various scenarios used in this study, a sensitivity analysis would be useful for future research.Practical implicationsThis study suggests how much freight rates a shipping company would need to charge if it were to offer tanker shipping services to four major Asian ports while simultaneously operating at the Baltic Sea during the remainder of the year.Originality/valueThis study adopts a market-oriented approach by incorporating both earnings and costs (including opportunity costs) in the profitability model rather than merely analyzing the total cost of shipping via the NSR. This study also analyzes impact of IMO 2020 Sulphur regulation on the NSR profitability.

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