Shipping and investment incentives: a trilogy Part 3. The effectiveness of investment incentives for shipping—the UK experience 1950-1987

This paper concentrates on the determinants of investment and examines both theoretical and empirical work on the investment function. The major determinants are considered and a case study of the United Kingdom shipping industry in the period 1963-1987 is undertaken. The analysis is unable to find any real link between the value of the investment incentives packages available to the UK shipping industry and the size of the UK fleet during this period. The conclusion follows that while financial factors (e.g. favourable credit arrangements) or individual components (e.g. investment grants) of fiscal packages may influence the decision to invest, the total package has not affected the level of shipping investment in the manner expected.     

Global shipping IPOs performance

We analyze the short- and long-run price performance of 143 global shipping IPOs listed during the 1984–2007 period in major stock exchanges, computing Buy-and-Hold Abnormal Returns (BHARs) and Cumulative Average Returns (CARs). We find the average underpricing for shipping IPOs to be 17.69%. The light underpricing is positively related to the age of the firm, the reputation of the stock exchange the IPO is listed in and the market condition of the period in which the firm went public, and negatively related to the reputation of the underwriters. In the long run, shipping IPOs underperform after a five-month holding period. Specifically, using the BHARs as a benchmark for long-run performance, we reveal that investors who buy immediately after listing and hold shares for 3 years will make a loss of 15.72%. The conclusions suggested by this survey of the global shipping industry surprises us regarding the maturity in the behavior of its investors.     

International comparison of market risks across shipping-related industries

This paper compares the behaviour of shipping and shipping-related company stock returns to reveal whether systematic risk differs from the average in the market and across sub-sectors of the maritime industry. Following an extensive collection of information through a postal questionnaire survey, 108 publicly listed shipping and shipping-related companies, across stock exchanges of the world, are classified by sector according to their core business activity. The Capital Asset Pricing Model (CAPM) is employed for the period 1996-1999 to model stock returns and measure sector βs (systematic risk). Stock returns over the period are mostly negative. The systematic risks of the Drilling and Offshore sectors are significantly higher than those of all other sectors, but are not different from each other. There is no significant difference between the systematic risks of the Bulk, Tanker, Container and Ferry sectors. The systematic risk of the Cruise sector lies somewhere between these two groups. There is no difference in the systematic risk of companies that diversified within shipping or shipping-related industries when compared to companies that diversified in other areas. Over all companies in the sample, βis lower than the market average, and so are the βs of the Ferry, Tanker, Bulk, Container and Yard sectors. Only the βof the Drilling sector is statistically higher than one, while the Cruise, Diversified and Offshore sectors are statistically one.     

The relative efficiency and financial risk assessment of shipping companies

Since shipping companies are highly competitive, we ask whether financial risk assessment tools impact company performance and, therefore competitiveness and efficiency. Stochastic Frontier Analysis (SFA) is used in the evaluation. Based on distinct features of the risk-return relationship, three cargo segments in the shipping industry are studied—dry bulk, liquid bulk, and containerized cargo. The influence of the risk assessment indicators on market and operational efficiency is subsequently determined using a panel regression to determine whether different asset allocation and risk management techniques improve the performance of shipping companies. In this analysis, 79 international shipping companies listed in Bloomberg Shipping Indices are included in the data collected from Thomson One for the period of 2001–2010. Efficiency estimation from the SFA shows that containerized cargo firms have better performance in both market and operating efficiencies. Operating efficiency performance is achieved by lowering liquidity. Market efficiency is improved by well-managed leverage level.     

Investor herding behaviour in globally listed shipping stocks

ABSTRACT

This study undertakes one of the first empirical attempts to investigate and contribute a set of innovative findings to investor herding behavior and herding spillover effects in globally listed shipping company stock returns. Distinguishing between OECD and Non-OECD markets, herding behavior is tested on a diversified set of shipping companies traded in international equity markets, over different business cycle phases, financial crises, and external shocks. A set of dynamic models, well established in the relevant behavioral finance literature, is implemented. Empirical evidence indicates investor herding behavior in shipping stock returns and herding spillover effects between different shipping sectors, albeit not robust in all cases. These challenging findings can have a material impact on efficient investment and financing decisions of shipping market players.     

航运企业的最优资本结构及其确定

随着我国市场经济体制的建立与投、融资体制的改革，企业已成为投、融资的主体，其资本结构问题相应地成为了企业财务管理中的核心问题之一。本文从航运业的固有特性出发，论述了航运企业的资本结构及其与企业收益之间的关系，在这一基础上，提出了航运企业的最优资本结构及其确定方法，并对影响航运企业资本结构的因素进行了分析。     

Refrigerated container versus bulk: evidence from the banana cold chain

During the last 20 years, the reefer shipping sector has been characterised by a gradual changing process, leading from specialised vessels to reefer containers. In fact, the reefer bulk fleet has experienced an irreversible decline, while the reefer container fleet has shown a continuous growth. This article investigates the current major factors shaping the reefer shipping industry, in order to understand the economic drivers inducing competition between bulk and containers. Therefore, a twofold analysis has been performed. First, an overview of the reefer market, including the cold chain, the demand for refrigerated products and the supply of reefer capacity given both by containership fleet and by conventional reefer fleet. Second, a specific case of the banana trade has been carried out for evaluating the revenues of each player involved in the banana cold chain followed by a cost analysis. The results reveal the market tendencies, focusing on the main sources of competition for bulk versus container.     

Multi-criteria analysis of decision-making by international commercial banks for providing shipping loans

This research investigates the underwriting attitude of international commercial banks in lending shipping loans. By adopting the analytic hierarchical process methodology, the underwriting attitude is captured to understand how bankers would deal with shipping loans in response to the current lengthy recession. We find that bankers focus on the criteria of corporate recourse (CR) in their decision-makings. Of the CR factors, the financial strength of shipowner is the most important factor, followed by the shipowner’s business history and the bank–firm relationship. With the current underwriting attitude, the shipping sector may have limited access to shipping loans of international commercial banks due to low corporate ratings caused by the long recession and the nature of industry itself: volatility, fragmentation, capital intensity, high leverage, etc.     

Risk perception affecting the performance of shipping companies: the moderating effect of China and Korea

Risks in the shipping industry have been highlighted and have attracted significant attention, especially following the bankruptcy of Hanjin in 2017. Due to the decrease in container volume, the business environment for large shipping companies in China has deteriorated. Therefore, major large shipping companies have implemented mixed ownership reform, which provides more opportunities for large Korean shipping companies to enter the Chinese shipping industry. This study first identifies risk perception, specifically focusing on the moderating effect of Chinese and Korean shipping companies, and then demonstrates the impact of these risks on shipping company performance. The results show that market, operational, and technical risks have a negative influence on Chinese shipping companies, whereas market, policy, financial, operations, and technical risks have a negative influence on Korean shipping companies. This study contributes to the fundamental understanding of the effect of risk perception on performance among shipping companies in both countries and calls for further research on risk management plans based on the risk factors identified herein. On a practical level, this study provides an important reference for operators and investors who seek to enter strategic alliances or joint venture in Chinese shipping industry.     

'Government preference' and its influence on the shipping industry in Korea

The author suggests the existence of 'government preference', which has changed the structure of the Korean economy from that of a light-goods industry to one of a heavy and chemical goods industry; and which has affected the formation of an export-dependent economy. 'Government preference' has also affected the shipping sector which was favoured as a foreign-exchange earner, not as an income generator. Korean shipping expanded through market forces in its earlier developmental stage where tonnage of the Korean fleet grew moderately and profitability was reasonably good; and by 'government preference' towards shipping externalities (balance-of-payments effect and support for export industry) which became a prime concern of the government in later years where the fleet expanded rapidly in spite of negative profitability. It follows that under circumstances of 'government preference' which is strong enough to work and which prefers shipping's external effect to value added generated by shipping. Korean shipping might well record a poor performance in terms of profitability. This means that Korean shipping companies' prime concern lies in 'survival' not in 'profit'.     

抢占经济复苏后的产业制高点

已经30年的中国国际海事会展依然吸引全球嘉宾,即使在全球金融危机的影响下,也没有消褪来自全球各地的航运、造船业的热情。主办方统计数据显示,第十五届中国国际海事会展面积超过了55000平方米,比上届增长了约40％,共有30个国家和地区的1200多家单位参展。而以“危机、挑战与机遇”为主题的高级海事论坛,更是一场精英云集、宏论嘉言精彩迭出的业界盛宴。     

Risk and return of U.S. water transportation stocks over time and over bull and bear market conditions

The aim of this paper is to investigate the behaviour of water transportation company stock returns in the U.S. stock exchanges from 1985 to 1994 in order to determine whether the systematic risk of this industry is different from that of the 'average' company in the market, whether it has changed over the ten year period, over bull and bear market conditions, and whether there is a firm 'size' effect in the industry. In the context of the Capital Asset Pricing Model (Capm), we find that the systematic risk of the shipping industry return is not different from that of the 'average' company. It is also found that the covariance of water transportation companies with respect to the overall stock market return did not change over the ten year period although it appears that it has changed over normal upward/downward market movements. There is also reasonable evidence that the intercept of the equation might have changed over normal upward/downward market movements. Finally, we document contradictory evidence regarding the size effect; during the period 1985-1989 we find small companies to have significantly higher returns and risk while during the period 1990-1994 medium size companies tend to have higher risk than small and large firms, which is not however compensated by higher returns.     

Explaining variations in national fleet across shipping nations

Many studies on national shipping attribute the declines in national fleets of developed economies to the lack of comparative advantage, but little has been done so far to identify factors contributing to countries’ shipping comparative advantage using a systematic approach. Although shipping markets are highly international and competitive, it is not clear whether tonnage owned by countries is governed by country-specific factors. This paper seeks to explain variations in nationally owned fleet across shipping nations. The main variable of interest is national fleet tonnage owned by country of domicile as opposed to registered tonnage. The results of econometric analysis using data from 84 shipping nations indicate that various country-specific factors do indeed contribute to variations in fleet tonnage across shipping nations, albeit at different levels of significance. Financial market development, external trade, ship registration, shipbuilding and shipping history appear to have the most significant impact, followed by the level of development and technology and maritime policy. Based on the results of analysis, implications for policy and future research are also discussed.     

The empirical evidence of the leverage effect on volatility in international bulk shipping market

This paper mainly applies Nelson's EGARCH (Exponentially Generalized Autoregressive Conditional Heteroskedasticity) model to investigate the leverage effect in the presence of the international bulk shipping market. The daily return of three different types of bulk vessel in the sampling period selected has been examined. We find that all return series show a significantly negative relation in terms of return and volatility and the leverage effect on volatility is more significant in market downward movement than in market upward movement under the same magnitude of innovation, in addition, the larger vessels have much more leverage effect than smaller vessels contemporaneously. Therefore, it seems to be an inherent nature in the international bulk shipping market that the phenomenon of an asymmetric impact between past innovations and current volatility. This result from the investigation may provide investors with an insight into real characteristics of price return volatility, it is useful for investors to pre-arrange their portfolios of assets, risk management e.g. enabling them to achieve a reduction of investment risk and an increase of operation performance in profit gain.     

长三角造船业风险及其防范研究

造船业不仅是资金密集、技术密集、劳动力密集的产业，也是风险密集的产业。造船业是一个高投入、低利润、高风险的行业，受美国次贷危机、全球股市剧烈震荡等因素影响，世界经济宏观环境变数增多，造船市场也受到了重大影响。航运市场波动风险、产能过剩风险、利率上调风险、技术风险、船东风险、价格风险、汇率风险等各种风险正在逐渐逼近长三角造船业。     

Daily Maersk’s impacts on shipper’s supply chain inventories and implications for the liner shipping industry

The liner shipping industry has long been characterized by a weekly sailing frequency and schedule unreliability. This research is motivated by the launch of the revolutionary “Daily Maersk” service in late 2011, which introduced daily departures and “absolute reliability” in the Asia–North Europe trade lane. This article analyzes Daily Maersk’s impacts on a shipper’s supply chain inventories and profound implications for the liner shipping industry as a game changer. The quantitative analyses show that the impact of more frequent sailings is most significant on a shipper’s cycle stock, while improving schedule reliability substantially reduces safety stock and pipeline stock. Daily Maersk is most valuable for products that have high value density, high inventory holding cost ratio, low demand variability, and high service level (SL) requirement. These findings imply that the trend of liner alliance/merger/acquisition is likely to continue or even accelerate as shipping lines consolidate fleet capacity to offer more frequent sailings. Rival carriers may step up their involvement in terminal operations to improve schedule reliability. They also need to rethink about their SL targets and clearly define their preferred customer segments.     

Asset allocation and value at risk in shipping equity portfolios

This study employs alternative dynamic volatility models to investigate the risk and return characteristics of a carefully selected sample of shipping stocks, in order to enhance asset allocation opportunities. As private and institutional investors are in search of alternative style investments, the assessment of stock volatility is a critical issue for efficient asset allocation, dynamic portfolio management and firm valuation. The empirical findings indicate a highly volatile profile for shipping stock returns, in line with respective (tanker and dry bulk) earnings. Sectoral and company fundamentals may affect shipping stock volatility, which is found to be sensitive to asymmetric shocks. The results support high portfolio returns for shipping stock portfolios that appear to be superior to standard market benchmarks but are associated with higher risk level.     

船舶效率：后危机时期关注的焦点

经历了金融危机的冲击和煎熬，中外船东和船厂没有了往日航运和船市繁荣时的喧嚣和热闹。在刚刚走过一段短暂的旺季后，航运市场又复归低迷，波澜不惊的背后，全球集装箱船队运力闲置规模再创历史新高，法国著名班轮经纪公司Alphaliner最近数据显示为572艘集装箱船，     

集装箱船舶大型化对中国班轮运输的影响

通过竞争情报分析提供了各班轮公司未来船队结构和运力的变化趋势,由此观察到各班轮公司为了降低自身的营运成本,在最近几年大量订购超巴拿马型甚至更大型的集装箱船舶参与运输,但是却不能达到其预期的规模效应。原因就在于相当一部分成本随着船型的增大而线性增加,规模不经济。我们探讨了中国的班轮运输市场的几个重要特点:中外贸易的不平衡导致了货源的不平衡;未来贸易结构的调整会影响航线的布局和调派;贸易上的不稳定因素使班轮公司遇到外在的风险。这些特点会深远地影响集装箱船舶大型化的经济受益,相反的,集装箱船舶大型化的趋势也会加剧这些负面的影响,危及整个班轮运输市场。     

The adaptation of the Polish shipping companies to market conditions

At the end of the eighties, fundamental changes took place in Polish shipping. Implementation of the market economy system was at first demonstrated in the introduction of the principles of self-dependence, self-government and self-financing of the shipping companies. Privatization performed a key role in the program of transformation of the centrally planned system into market oriented financially independent shipping organizations. The previous principle of the necessary participation of the home fleet in transporting domestic sea-borne trade has been mostly replaced by cross-trade. Many shipping services have left its basic ports in the country for a West European basis, securing alimentation of home and transit cargoes by feeder-service systems. Joint stock companies in shipping with substantial shares of foreign capital are welcomed, and the previously obligatory system of administrative methods of the state monopoly has been abolished. The principles of shipping policy represented in the past by Poland and also by UNCTAD in the 1960s have lost their impact and must be change and adapted to the new demands of the shipping markets.