IDEAS home Printed from https://ideas.repec.org/a/gam/jlogis/v1y2017i1p3-d91008.html
   My bibliography  Save this article

The Origin and Consistency of the Ton–Mile Metric in the Shipping Economics

Author

Listed:
  • Okan Duru

    (Department of Maritime Administration, Texas A&M University at Galveston, Galveston, TX 77553, USA)

Abstract

The aim of this paper is to investigate an underpinning of the conventional maritime economics, supply-demand framework, and measurement of shipping services in particular. The ton–mile metric is frequently employed as a measure of demand in both academia and professional readings. On the other hand, the ton–mile measurement approach has various drawbacks and inconsistencies that are thought to be negligible or simply ignored. The incompleteness of the ton–mile metric approach, which is usually taken as granted, is discussed in terms of its origin and historical presence in the literature. Assumptions behind the approach are investigated, and practical limitations are revisited.

Suggested Citation

  • Okan Duru, 2017. "The Origin and Consistency of the Ton–Mile Metric in the Shipping Economics," Logistics, MDPI, vol. 1(1), pages 1-8, February.
    • Handle: RePEc:gam:jlogis:v:1:y:2017:i:1:p:3-:d:91008
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2305-6290/1/1/3/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2305-6290/1/1/3/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Steen Koekebakker & Roar Adland & Sigbjørn Sødal, 2006. "Are Spot Freight Rates Stationary?," Journal of Transport Economics and Policy, University of Bath, vol. 40(3), pages 449-472, September.
    2. Jostein Tvedt, 2003. "Shipping market models and the specification of freight rate processes," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 5(4), pages 327-346, December.
    3. Sys, Christa, 2009. "Is the container liner shipping industry an oligopoly?," Transport Policy, Elsevier, vol. 16(5), pages 259-270, September.
    4. Roar Adland & Siri Strandenes, 2006. "Market efficiency in the bulk freight market revisited," Maritime Policy & Management, Taylor & Francis Journals, vol. 33(2), pages 107-117, May.
    5. Steen Koekebakker * & Roar Os Ådland, 2004. "Modelling forward freight rate dynamics—empirical evidence from time charter rates," Maritime Policy & Management, Taylor & Francis Journals, vol. 31(4), pages 319-335, October.
    6. Jean-Philippe Bouchaud, 2008. "Economics needs a scientific revolution," Nature, Nature, vol. 455(7217), pages 1181-1181, October.
    7. Stanley, H.E. & Amaral, L.A.N. & Gabaix, X. & Gopikrishnan, P. & Plerou, V., 2001. "Similarities and differences between physics and economics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 299(1), pages 1-15.
    8. Albert W. Veenstra, 1999. "The term structure of ocean freight rates," Maritime Policy & Management, Taylor & Francis Journals, vol. 26(3), pages 279-293.
    9. Roar Adland & Kevin Cullinane, 2005. "A Time-Varying Risk Premium in the Term Structure of Bulk Shipping Freight Rates," Journal of Transport Economics and Policy, University of Bath, vol. 39(2), pages 191-208, May.
    10. Aror O S Adland & Steen Koekebakar, 2004. "Market Efficiency in the Second-hand Market for Bulk Ships," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 6(2), pages 197-197, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Amir H. Alizadeh & Roar Os Ådland & Steen Koekebakker, 2007. "Predictive power and unbiasedness of implied forward charter rates," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 26(6), pages 385-403.
    2. Tezuka, Koichiro & Ishii, Masahiro & Ishizaka, Motokazu, 2012. "An equilibrium price model of spot and forward shipping freight markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 48(4), pages 730-742.
    3. Spyros Makridakis & Andreas Merikas & Anna Merika & Mike G. Tsionas & Marwan Izzeldin, 2020. "A novel forecasting model for the Baltic dry index utilizing optimal squeezing," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(1), pages 56-68, January.
    4. Kou, Ying & Luo, Meifeng, 2018. "Market driven ship investment decision using the real option approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 118(C), pages 714-729.
    5. Sødal, Sigbjørn & Koekebakker, Steen & Aadland, Roar, 2008. "Market switching in shipping -- A real option model applied to the valuation of combination carriers," Review of Financial Economics, Elsevier, vol. 17(3), pages 183-203, August.
    6. Sigbjørn Sødal & Steen Koekebakker & Roar Aadland, 2008. "Market switching in shipping — A real option model applied to the valuation of combination carriers," Review of Financial Economics, John Wiley & Sons, vol. 17(3), pages 183-203, August.
    7. Adland, Roar & Jia, Haiying & Lu, Jing, 2008. "Price dynamics in the market for Liquid Petroleum Gas transport," Energy Economics, Elsevier, vol. 30(3), pages 818-828, May.
    8. Koekebakker, Steen & Adland, Roar & Sødal, Sigbjørn, 2007. "Pricing freight rate options," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 43(5), pages 535-548, September.
    9. Photis M. Panayides, 2006. "Maritime policy, management and research: role and potential," Maritime Policy & Management, Taylor & Francis Journals, vol. 33(2), pages 95-105, May.
    10. Adland, Roar & Alizadeh, Amir H., 2018. "Explaining price differences between physical and derivative freight contracts," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 118(C), pages 20-33.
    11. Goulas, Lambros & Skiadopoulos, George, 2012. "Are freight futures markets efficient? Evidence from IMAREX," International Journal of Forecasting, Elsevier, vol. 28(3), pages 644-659.
    12. Alizadeh, Amir H. & Huang, Chih-Yueh & van Dellen, Stefan, 2015. "A regime switching approach for hedging tanker shipping freight rates," Energy Economics, Elsevier, vol. 49(C), pages 44-59.
    13. Javier Población & Gregorio Serna, 2018. "A common long-term trend for bulk shipping prices," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 20(3), pages 421-432, September.
    14. Sercan Erol, 2017. "Calculation of the freight revenues in Turkey-focused maritime transportation," Maritime Policy & Management, Taylor & Francis Journals, vol. 44(7), pages 815-824, October.
    15. Tvedt, Jostein & Hovi, Inger Beate, 2024. "Container shipping: A market equilibrium perspective on freight rates formation post-Covid-19," Transportation Research Part A: Policy and Practice, Elsevier, vol. 179(C).
    16. Adland, Roar & Prochazka, Vit, 2021. "The value of timecharter optionality in the drybulk market," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 145(C).
    17. Javier Población, 2017. "Are recent tanker freight rates stationary?," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 19(4), pages 650-666, December.
    18. Magirou, Evangelos F. & Psaraftis, Harilaos N. & Bouritas, Theodore, 2015. "The economic speed of an oceangoing vessel in a dynamic setting," Transportation Research Part B: Methodological, Elsevier, vol. 76(C), pages 48-67.
    19. Wang, Xiao-Tian & Li, Zhe & Zhuang, Le, 2017. "European option pricing under the Student’s t noise with jumps," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 469(C), pages 848-858.
    20. Chen, Gang & Rytter, Niels G.M. & Jiang, Liping & Nielsen, Peter & Jensen, Lars, 2017. "Pre-announcements of price increase intentions in liner shipping spot markets," Transportation Research Part A: Policy and Practice, Elsevier, vol. 95(C), pages 109-125.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jlogis:v:1:y:2017:i:1:p:3-:d:91008. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.