Book Series
SHIPPING AND TRANSPORT LOGISTICS
VOLUME ONE
CONTAINER TRANSPORT MANAGEMENT

Chapter 1: The container shipping market

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1 - 15It is desirable to conduct empirical studies to better understand the international container shipping industry as the industry is an artery for economic development. With this objective, we aim to develop and empirically test a theoretical model that identifies the determinants of fleet size in container shipping. To pursue this research inquiry, we begin with the theoretical argument that ||the demand for container shipping services influences freight rate, which adjusts the supply of world fleets||. On this basis, we identify the different factors that affect shipping supply and use regression analyses to explain the relationships among these determinants and their effects on fleet size in container shipping. Our findings indicate that supply of container shipping service is related to changes in seaborne trade and freight rate, whereby shipping firms respond by ordering and delivering new ships, as well as adjusting the broken up age of ships. Seaborne trade, freight rate, new ship order, new ship delivery and broken up age of vessels are empirically validated as determinants of fleet size in container shipping.
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