Quotation Munim, Ziaul Haque, Schramm, Hans-Joachim. 2016. Forecasting container shipping freight rates for the Far East – Northern Europe trade lane. 21st IAME 2016 Conference, Hamburg, Germany, 23.08.-26.08.


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Abstract

This study introduces state-of-the-art volatility forecasting method and its implementation on forecasting container shipping freight rates. Over the last decade, the container shipping industry has become very volatile. The demolition of the shipping conference system in 2008 for all trades calling a port in the European Union (EU) as well as the global financial crisis in 2009 have impacted the container shipping industry tremendously. However, the approaches of forecasting the container freight rates using econometric and time series modelling have been rather limited. Therefore, in this paper, we discussed the container freight rate dynamics and attempted to forecast freight rates for the Far East to Northern Europe trade lane. While forecasting the container freight rates, we employed Autoregres-sive Integrated Moving Average (ARIMA) as well as the combination of ARIMA and Au-toregressive Conditional Heteroscedasticity (ARCH) model, which we call ARIMARCH. We observed that the ARIMARCH model provides comparatively better forecast results than the existing freight rate forecasting models while performing short-term forecast on the weekly as well as monthly level. We also observed remarkable influence of general rate increases (GRIs) on the container freight rate volatility.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Paper presented at an academic conference or symposium
Language English
Title Forecasting container shipping freight rates for the Far East ¿ Northern Europe trade lane
Event 21st IAME 2016 Conference
Year 2016
Date 23.08.-26.08.
Country Germany
Location Hamburg
URL http://www.iame2016.org/
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 (ÖSTAT 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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