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Determinants of European freight rates: The role of market power and trade imbalance

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  • De Oliveira, Gabriel Figueiredo

Abstract

This paper investigates the determinants of freight rates between six European countries and 47 partners. We show that the inward freight rates are, on average, 23% higher than for outward ones, indicating that the cost of repositioning empty containers is mainly carried by European importers. Moreover, we have broken down the freight rates into basic ocean freight and surcharges in order to analyze the impact of each explanatory variable on these two components. It appears that basic ocean freight depends mainly on factors that define the structure of shipping lanes, while surcharges are more time sensitive.

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  • De Oliveira, Gabriel Figueiredo, 2014. "Determinants of European freight rates: The role of market power and trade imbalance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 62(C), pages 23-33.
    • Handle: RePEc:eee:transe:v:62:y:2014:i:c:p:23-33
    DOI: 10.1016/j.tre.2013.12.001
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    3. Ziaul Haque Munim & Hans-Joachim Schramm, 0. "Forecasting container freight rates for major trade routes: a comparison of artificial neural networks and conventional models," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 0, pages 1-18.
    4. Sun, Xiaolei & Liu, Chang & Wang, Jun & Li, Jianping, 2020. "Assessing the extreme risk spillovers of international commodities on maritime markets: A GARCH-Copula-CoVaR approach," International Review of Financial Analysis, Elsevier, vol. 68(C).
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    6. Lee, Jungho & Wei, Shang-Jin & Xu, Jianhuan, 2024. "Trade imbalance, heavy goods, and pollution," Journal of International Money and Finance, Elsevier, vol. 144(C).
    7. Dominik Boddin & Frank Stähler, 2018. "The Organization of International Trade," CESifo Working Paper Series 7378, CESifo.
    8. Jungho Lee & Shang-Jin Wei & Jianhuan Xu, 2020. "The Welfare Cost of a Current Account Imbalance: A "Clean" Effect," NBER Working Papers 27276, National Bureau of Economic Research, Inc.
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    10. Aldis Bulis & Sajal Kabiraj & Md Nur Alam Siddik, 2021. "Competitiveness Impedimental Factors of Latvian Manufacturing Companies in China," Global Business Review, International Management Institute, vol. 22(2), pages 290-310, April.
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    12. Ziaul Haque Munim & Hans-Joachim Schramm, 2021. "Forecasting container freight rates for major trade routes: a comparison of artificial neural networks and conventional models," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(2), pages 310-327, June.
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