Time Charter or Trip Charter? An Assessment of Market Efficiency in Shipping Market Kasra Pourkermani
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- Category: Mercados - Fletes- Cotizaciones
- Published on Sunday, 30 August 2026 05:27
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Kasra Pourkermani
This paper explores the economic value of charter hire rate forecasts in the bulk shipping industry for ship operators by introducing a chartering strategy defined as a sequence of different types of contracts that maximises profit. Ship operators are assumed to divide ship use to trip charter and time charter market depending on the quarterly excess charter hire rate forecasts, i.e. the difference between time charter and trip charter (spot) rates. Ship operators use the recursive forecasting approach and switch the chartering strategy across the two positions. The decision is based on economic measurement rather than statistical significance. The economic benefits realized by ship operators who apply our forecasting rules exceed those derived from the fixed policy approach of using either alternative, and will be used to disprove the validity of the efficient market hypothesis. The paper applies the regression methodology and forecasts two steps ahead of quarterly spot.
KEY WORDS
~ Charter hire rate forecast
~ Efficient market
~ Decision-making process
~ Time charter
~ Trip charter