Forecasting container freight rates: An econometric analysis

Leopold David Alonso Manzanero & Kristof Johannes Krupp

Student thesis: Master thesis

Abstract

The purpose of this study is to analyse the behaviour of container freight rate time series with econometric tools in order to attempt an accurate forecast, as well as to justifyi our numerical findings based on maritime economic theory . There is a gap when it comes to forecasting container freight rates, as existing literature mainly looks into the dry bulk sector or oil shipping. This is most likely attributable to the homogeneity of the cargo of the dry bulk and oil segments, which makes the economic reasoning for the models more substantial, as the industry segment in question trades a widely available commodity, or comparable good. This makes assumptions about perfectly competitive markets more convenient instead of looking at a shipping segment that transports many different kinds of goods, as is the case within container shipping\. However, as container shipping companies provide comparable services, this should not pose problems, especially when using macroeconomic modelling. This paper attempts to contribute to the development of a forecasting model for container freight rates by conducting an econometric analysis of average container freight rates which are easily accessible to professionals, in order to pave a path for further research within this field.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2009
Number of pages214