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

• Journal of Korea Port Economic Association
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• v.36 no.4
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• pp.17-30
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• 2020

In the shipping industry, it is essential to engage in the preemptive prediction of freight rate volatility through market monitoring. Considering that freight rates have already started to fall, the loss of shipping companies will soon be uncontrollable. Therefore, in this study, factors affecting the freight rates of bulk carriers, which have relatively large freight rate volatility as compared to container freight rates, were quantified and analyzed. In doing so, we intended to contribute to future shipping market monitoring. We performed an analysis using a vector error correction model and estimated the influence of six independent variables on the charter rates of bulk carriers by Handy Size, Supramax, Panamax, and Cape Size. The six independent variables included the bulk carrier fleet volume, iron ore traffic volume, ribo interest rate, bunker oil price, and Euro-Dollar exchange rate. The dependent variables were handy size (32,000 DWT) spot charter rates, Supramax 6 T/C average charter rates, Pana Max (75,000 DWT) spot charter, and Cape Size (170,000 DWT) spot charter. The study examined charter rates by size of bulk carriers, which was different from studies on existing specific types of ships or fares in oil tankers and chemical carriers other than bulk carriers. Findings revealed that influencing factors differed for each ship size. The Libo interest rate had a significant effect on all four ship types, and the iron ore traffic volume had a significant effect on three ship types. The Ribo rate showed a negative (-) relationship with Handy Size, Supramax, Panamax, and Cape Size. Iron ore traffic influenced three types of linearity, except for Panamax. The size of shipping companies differed depending on their characteristics. These findings are expected to contribute to the establishment of a management strategy for shipping companies by analyzing the factors influencing changes in the freight rates of charterers, which have a profound effect on the management performance of shipping companies.