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The impact of ship scrapping subsidies on fleet renewal decisions in dry bulk shipping

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  • Yang, Zhongzhen
  • Jiang, Zhenfeng
  • Notteboom, Theo
  • Haralambides, Hercules

Abstract

We introduce a novel dimension to the fleet renewal decisions of a shipping company, taking into account the effects of ship scrapping subsidies. The fleet renewal behavior of a company is analyzed with focus on early scrapping decisions prompted by the subsidy. We present a fleet renewal decision model which maximizes firm profit given market demand and the features of a scrapping subsidy. To assess the effects of a potential subsidy on corporate decisions, we compare the optimal fleet renewal schemes with and without the subsidy. We calculate the outcome of such a policy measure for China COSCO Shipping.

Suggested Citation

  • Yang, Zhongzhen & Jiang, Zhenfeng & Notteboom, Theo & Haralambides, Hercules, 2019. "The impact of ship scrapping subsidies on fleet renewal decisions in dry bulk shipping," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 126(C), pages 177-189.
    • Handle: RePEc:eee:transe:v:126:y:2019:i:c:p:177-189
    DOI: 10.1016/j.tre.2019.04.008
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    2. Mariarosaria Lombardi & Giuseppe Maffia & Caterina Tricase, 2019. "Sustainable Bulk-Packaging System for Sugar Shipping: Case Study of the Enterprise Leader in Europe," Administrative Sciences, MDPI, vol. 9(4), pages 1-16, November.
    3. Dan Zhuge & Shuaian Wang & Lu Zhen & Gilbert Laporte, 2021. "Subsidy design in a vessel speed reduction incentive program under government policies," Naval Research Logistics (NRL), John Wiley & Sons, vol. 68(3), pages 344-358, April.
    4. Orestis Schinas & Niklas Bergmann, 2021. "The Short-Term Cost of Greening the Global Fleet," Sustainability, MDPI, vol. 13(16), pages 1-32, August.
    5. Huang, Xingyu & Zheng, Pengjun & Liu, Guiyun, 2024. "Non-cooperative and Nash-bargaining game of a two-parallel maritime supply chain considering government subsidy and forwarder's CSR strategy: A dynamic perspective," Chaos, Solitons & Fractals, Elsevier, vol. 178(C).

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