Quotation Schramm, Hans-Joachim, Haque Munim, Ziaul. 2021. Container freight rate forecasting with improved accuracy by integrating soft facts from practitioners. Research in Transportation Business & Management.


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Abstract

This study presents a novel approach to forecast freight rates in container shipping by integrating soft facts in the form of measures originating from surveys among practitioners asked about their sentiment, confidence or perception about present and future market development. As a base case, an autoregressive integrated moving average (ARIMA) model was used and compared the results with multivariate modelling frameworks that could integrate exogenous variables, that is, ARIMAX and Vector Autoregressive (VAR). We find that incorporating the Logistics Confidence Index (LCI) provided by Transport Intelligence into the ARIMAX model improves forecast performance greatly. Hence, a sampling of sentiments, perceptions and/or confidence from a panel of practitioners active in the maritime shipping market contributes to an improved predictive power, even when compared to models that integrate hard facts in the sense of factual data collected by official statistical sources. While investigating the Far East to Northern Europe trade route only, we believe that the proposed approach of integrating such judgements by practitioners can improve forecast performance for other trade routes and shipping markets, too, and probably allows detection of market changes and/or economic development notably earlier than factual data available at that time.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Research in Transportation Business & Management
Citation Index SSCI
Language English
Title Container freight rate forecasting with improved accuracy by integrating soft facts from practitioners
Year 2021
Reviewed? Y
URL https://www.sciencedirect.com/science/article/pii/S2210539521000456?via%3Dihub
DOI https://doi.org/10.1016/j.rtbm.2021.100662
Open Access Y
Open Access Link https://doi.org/10.1016/j.rtbm.2021.100662

Associations

People
Schramm, Hans-Joachim (Details)
External
Haque Munim, Ziaul (University of South-Eastern Norway, Norway)
Organization
Department of 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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