• Korea Trade Review
• /
• v.43 no.3
• /
• pp.125-145
• /
• 2018

The Baltic Shipping Exchange is reporting the Baltic Dry Index (BDI) which represents the average charter rate for bulk carriers transporting major cargoes such as iron ore, coal, grain, and so on. And the current BDI index is reflected in the proportion of capesize 40%, panamax 30% and spramax 30%. Like mentioned above, the capesize plays a major role among the various sizes of bulk carriers and this study is to analyze the influence of the factors influencing on charter rate of capesize carriers which transport iron ore and coal as the major cargoes. For this purpose, this study verified causality between variables using Vector Error Correction Model (VECM) and tried to derive a long-run equilibrium model between the dependent variable and independent variables. Regression analysis showed that every six independent variable has a significant effect on the capesize charter rate, even at the 1% level of significance. Charter rate decreases by 0.08% when capesize total fleet increases by 1%, charter rate increases by 0.04% when bunker oil price increases by 1%, and charter rate decreases by 0.01% when Yen/Dollar rate increases by 1%. And charter rate increases by 0.02% when global GDP increases by one unit (1%). In addition, the increase in cargo volume of iron ore and coal which are major transportation items of capesize carriers has also been shown to increase charter rates. Charter rate increases by 0.11% in case of 1% increase in iron ore cargo volume, and 0.09% in case of 1% increase in coal cargo volume. Although there have been some studies to analyze the influence of factors affecting the charterage of bulk carriers in the past, there have been few studies on the analysis of specific size vessels. At present moment when ship size is getting bigger, this study carried out research on capesize vessels, which are biggest among bulk carriers, and whose utilization is continuously increasing. This study is also expected to contribute to the establishment of trade policies for specific cargoes such as iron ore and coal.

• Korea Trade Review
• /
• v.48 no.3
• /
• pp.69-88
• /
• 2023

This study analyzes the dynamic characteristics of cargo volume (demand), ship fleet (supply), and freight rate (price) of container, dry bulk, and tanker shipping markets by using the VAR and VECM models. This analysis is expected to enhance the statistical understanding of market dynamics, which is perceived by the actual experiences of market participants. The common statistical patterns, which are all shown in the three shipping markets, are as follows: 1) The Granger-causality test reveals that the past increase of fleet variable induces the present decrease of freight rate variable. 2) The impulse-response analysis shows that cargo shock increases the freight rate but fleet shock decreases the freight rate. 3) Among the three cargo, fleet, and freight rate shocks, the freight rate shock is overwhelmingly largest. 4) The comparison of adjR² reveals that the fleet variable is most explained by the endogenous variables, i.e., cargo, fleet, and freight rate in each of shipping markets. 5) The estimation of co-integrating vectors shows that the increase of cargo increases the freight rate but the increase of fleet decreases the freight rate. 6) The estimation of adjustment speed demonstrates that the past-period positive deviation from the long-run equilibrium freight rate induces the decrease of present freight rate.