The Economics of Concentration in Shipping: Consequences for the VLCC Tanker Sector

This article focuses on the issue of market concentration in the Very Large Crude Carrier (VLCC) tanker sector and its significance for freight rates during 1993(1)-2010(12). It explores the nature of changes in freight rate volatility along business cycles and finds that freight rate volatility generally increases during both upswings and downswings of the market, but becomes evidently more intense during market upswings. Industrial concentration in the VLCC sector is measured via application of concentration measures that are well founded in the literature. The empirical results obtained reveal a significant increase in market concentration post-1993. Subsequently, the effect of changes in market structure upon the formation and volatility of VLCC spot and time charter freight rates is investigated. We substantiate a positive relationship between spot freight rates and market concentration over the period examined, concluding that expectations regarding the future course of concentration are critical for forecasting the direction of freight rates in the future.

• Record URL:
  • https://doi.org/10.1057/mel.2013.19
• Availability:
  • Find a library where document is available. Order URL: http://worldcat.org/issn/13881973
• Supplemental Notes:
  • Copyright © 2014 Macmillan Publishers Ltd. The contents of this paper reflect the views of the author[s] and do not necessarily reflect the official views or policies of the Transportation Research Board or the National Academy of Sciences.
• Authors:
  • Merikas, Andreas G
  • Merikas, Anna A
  • Polemis, Dionysis
  • Triantafyllou, Anna
• Publication Date: 2014-3

Language

• English

Media Info

• Media Type: Web
• Features: References;
• Pagination: pp 92-110
• Serial:
  • Maritime Economics & Logistics
  • Volume: 16
  • Issue Number: 1
  • Publisher: Palgrave Macmillan
  • ISSN: 1388-1973
  • EISSN: 1476-0592
  • Serial URL: http://link.springer.com/journal/41278

Subject/Index Terms

• TRT Terms: Business cycles; Economic analysis; Forecasting; Freight terminals; Market assessment; Shipping; Supertankers; Very large crude carriers
• Subject Areas: Economics; Marine Transportation; Terminals and Facilities;

Filing Info

• Accession Number: 01606003
• Record Type: Publication
• Files: TRIS
• Created Date: Jul 28 2016 10:03AM