Quotation Munim, Ziaul Haque, Schramm, Hans-Joachim. Forthcoming. Forecasting container shipping freight rates for the Far East - Northern Europe trade lane. Maritime Economics and Logistics. 19 (1), 106-125.


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Abstract

This study introduces a state-of-the-art volatility forecasting method for container shipping freight rates. Over the last decade, the container shipping industry has become very unpredictable. The demolition of the shipping conferences system in 2008 for all trades calling a port in the European Union (EU) and the global financial crisis in 2009 have affected the container shipping freight market adversely towards a depressive and non-stable market environment with heavily fluctuating freight rate movements. At the same time, the approaches of forecasting container freight rates using econometric and time series modelling have been rather limited. Therefore, in this paper, we discuss contemporary container freight rate dynamics in an attempt to forecast for the Far East to Northern Europe trade lane. Methodology-wise, we employ autoregressive integrated moving average (ARIMA) as well as the combination of ARIMA and autoregressive conditional heteroscedasticity (ARCH) model, which we call ARIMARCH. We observe that ARIMARCH model provides comparatively better results than the existing freight rate forecasting models while performing short-term forecasts on a weekly as well as monthly level. We also observe remarkable influence of recurrent general rate increases on the container freight rate volatility.

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Publication's profile

Affiliation WU
Type of publication Journal article
Journal Maritime Economics and Logistics
Language English
Title Forecasting container shipping freight rates for the Far East - Northern Europe trade lane
Volume 19
Number 1
Year 2017
Page from 106
Page to 125
Reviewed? Y
URL http://link.springer.com/article/10.1057/s41278-016-0051-7
DOI https://doi.org/10.1057/s41278-016-0051-7
JEL C53, C92, R40

Associations

People
Schramm, Hans-Joachim (Details)
External
Munim, Ziaul Haque (University of Agder, Norway)
Organization
Global Business and Trade DP (Details)
Research areas (Ă–STAT Classification 'Statistik Austria')
5300 Economics (Details)
5332 Transport economics (Details)
5336 Commodity science (Details)
5337 World trade science (Details)
5344 Foreign trade (Details)
5354 Business logistics (Details)
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