Essays on the empirical analysis of ship chartering strategies
The freight market is one of the most important and vital ones in the shipping industry, since its behaviour and state affect the majority of the decisions made in the industry. Considering the important aspects of the freight rates and different types/sizes of ships in the dry bulk shipping market, this thesis attempts to increase the understanding of the dynamics of physical hedging instruments and provide robust chartering strategies that can be used to increase the profitability of these operations. The chartering strategies are defined as the best mix of contracts that need to be signed in order to optimise the revenues generated by operating in the freight market.The first empirical part (Chapter 2) assess a widely used approach (i.e. technical trading rules) and examines whether it can allow identifying optimal chartering strategies. Precisely, the study examines the types and aspects of strategies that can be formulated while also analysing their profitability. The results show that the revolution of the freight rates is the key factor when attempting to make an optimal decision. The fluctuations in freight values are usually due to changes in the demand and supply levels therefore a new macroeconomic dataset is constructed in Chapter 3 based on a high number of various demand and supply variables that can affect the level of freight rates. The empirical findings highlight important dynamic interactions between the macroeconomic variables and the freight rate curve while it is also observed that a significant percentage of the freight rate variation is attributed to fluctuations in the supply macroeconomic variables. Finally, in Chapter 4 the thesis analyses the relationship between risk and return in shipping investments from a financial and managerial perspective in order to understand the firms' competitive behaviour. The empirical results indicate that the nature of the risk and return relationship is affected by the risk measures, return measures, subsamples, market conditions and macroeconomic variables associated with the freight rate cycle. Overall, the empirical findings of this thesis have important implications on the freight market trading and risk management as well as chartering operations such as the type of contract that should be signed depending on different market conditions.
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