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Capacity retirement in the dry bulk market: A vessel based logit model

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  • Alizadeh, Amir H.
  • Strandenes, Siri Pettersen
  • Thanopoulou, Helen

Abstract

The paper investigates the effect of vessel specific and market variables on the probability of scrapping dry bulk ships. Using a dataset from 2012 to 2015, we find that the probability of scrapping increases with age, but that the relation between vessel size and scrapping probability varies across the different segments. In addition, while the relation between earnings and probability of scrapping ships is negative, bunker prices seem to affect only the scrapping rate of smaller tonnage. Scrapping probability also increases with an increase in interest rates, freight market volatility and scrap steel prices.

Suggested Citation

  • Alizadeh, Amir H. & Strandenes, Siri Pettersen & Thanopoulou, Helen, 2016. "Capacity retirement in the dry bulk market: A vessel based logit model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 92(C), pages 28-42.
    • Handle: RePEc:eee:transe:v:92:y:2016:i:c:p:28-42
    DOI: 10.1016/j.tre.2016.03.005
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    Cited by:

    1. Francesco Tola & Enrico Maria Mosconi & Marco Marconi & Mattia Gianvincenzi, 2023. "Perspectives for the Development of a Circular Economy Model to Promote Ship Recycling Practices in the European Context: A Systemic Literature Review," Sustainability, MDPI, vol. 15(7), pages 1-28, March.
    2. Maria I. Chondrokouki & Andrianos E. Tsekrekos, 2022. "Freight rate volatility and flag-switching decisions," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 24(2), pages 395-414, June.
    3. Haiying Jia & Roar Adland & Yuchen Wang, 2021. "Global Oil Export Destination Prediction: A Machine Learning Approach," The Energy Journal, , vol. 42(4), pages 111-130, July.
    4. 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.
    5. Bai, Xiwen & Lam, Jasmine Siu Lee, 2019. "A destination choice model for very large gas carriers (VLGC) loading from the US Gulf," Energy, Elsevier, vol. 174(C), pages 1267-1275.
    6. Papapostolou, Nikos C. & Pouliasis, Panos K. & Kyriakou, Ioannis, 2017. "Herd behavior in the drybulk market: an empirical analysis of the decision to invest in new and retire existing fleet capacity," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 104(C), pages 36-51.
    7. Orestis Schinas & Niklas Bergmann, 2021. "The Short-Term Cost of Greening the Global Fleet," Sustainability, MDPI, vol. 13(16), pages 1-32, August.
    8. Abdullah AÇIK & Hüseyin İshak Halil KESİKTAŞ & Sadık Özlen BAŞER, 2020. "Role Of Interest Rates On Fleet Capacity Adjustment Decisions Of Shipowners," Journal of Research in Economics, Politics & Finance, Ersan ERSOY, vol. 5(1), pages 66-80.
    9. Nikos Kagkarakis, 2017. "The Effect Of Vessel Supply On Ship-Demolition Prices," Eurasian Journal of Economics and Finance, Eurasian Publications, vol. 5(1), pages 78-94.
    10. Kei Kanamoto & Liwen Murong & Minato Nakashima & Ryuichi Shibasaki, 2021. "Can maritime big data be applied to shipping industry analysis? Focussing on commodities and vessel sizes of dry bulk carriers," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(2), pages 211-236, June.
    11. Yang, Jialin & Ge, Ying-En & Li, Kevin X., 2022. "Measuring volatility spillover effects in dry bulk shipping market," Transport Policy, Elsevier, vol. 125(C), pages 37-47.

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