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Chartering practices in liner shipping

Author

Listed:
  • Pierre Cariou

    (Euromed Marseille - École de management - Association Euromed Management - Marseille)

  • François-Charles Wolff

    (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - IEMN-IAE Nantes - Institut d'Économie et de Management de Nantes - Institut d'Administration des Entreprises - Nantes - UN - Université de Nantes)

Abstract

Chartering rather than owning a vessel is a recurrent question for liner operators. This article aims at identifying the extent of such chartering practices, the characteristics of vessels chartered and if an impact on liner profitability can be found. To do so, an initial dataset collected in 2009 on 510 liner operators and 5,005 vessels is used. Results from random effect Probit models point out first that chartering rates are not different between small and large operators. Furthermore, findings suggest that chartering of small and young vessels is more common and that chartering rates have increased for companies subject to higher fleet growth from 2007 to 2009. An analysis using a fixed effect Logit model on intra-fleet management of 17 selected liner companies further stresses that larger companies have chartered more small vessels during the last 2 years, a result that may be explain by the need to allocate the financing to new larger vessels. We then study whether the chartering rate and the size of these 17 liner companies have had an influence on their observed profitability in 2007, 2008 and 2009. Our results suggest that those variables impact profitability, but in variable ways over time.

Suggested Citation

  • Pierre Cariou & François-Charles Wolff, 2012. "Chartering practices in liner shipping," Working Papers hal-00760989, HAL.
  • Handle: RePEc:hal:wpaper:hal-00760989
    Note: View the original document on HAL open archive server: https://hal.science/hal-00760989
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    References listed on IDEAS

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    Cited by:

    1. Peng, Wenhao & Bai, Xiwen, 2022. "Prospects for improving shipping companies’ profit margins by quantifying operational strategies and market focus approach through AIS data," Transport Policy, Elsevier, vol. 128(C), pages 138-152.
    2. Nowińska, Agnieszka & Schramm, Hans-Joachim, 2021. "Uncertainty, status-based homophily, versatility, repeat exchange and social exchange in the container shipping industry," Journal of Business Research, Elsevier, vol. 128(C), pages 524-536.

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    Keywords

    Liner shipping; chartering; profitability;
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