Abstract
This study evaluates the 2000-2017 time frame and assesses the performance of the bulk/container shipping industry before and after the Great Financial Crisis (GFC) in relation to the Baltic Dry Index (BDI) and two other benchmarks in a variety of combinations. This study evaluates two different period portfolios of shipping companies based on their stock price total return performance. Five cases are presented that demonstrate portfolio improvement when comparing performance after the GFC with performance before the GFC in relation to the BDI and the other benchmarks. Included are discussions on shipping industry competition, vessel utilization and freight rates plus the BDI as an economic activity predictor.
Highlights
Maritime transport, known as shipping, is a well-established industry that utilizes routes where infrastructure along the routes is not normally needed
The research question is the following: Are Bulk/Container Shipping Companies improving compared to the Baltic Dry Index? The objective of this study is to evaluate the stock market returns between the two nine-year portfolios
The research question is: Are Bulk/Container Shipping Companies improving compared to the Baltic Dry Index? Using the methodology in this study and the significance of the measurements, the hypothesis is confirmed using the included case scenarios
Summary
Known as shipping, is a well-established industry that utilizes routes where infrastructure along the routes is not normally needed. Canals on most world routes are limited only to a very few locations. These features make “maritime transport highly economic” (Bistricic, 2007). The major investments are typically the ships themselves. The continuation of these investments leads to the overall development of the maritime business (Mrnjavac, 1998). Shipping activities “represent the cheapest transportation of large amounts of goods” and is the framework for the majority of the “international exchange of goods” in the world economy (Bistricic, 2007). “the shipping industry is inextricably linked with the world economy”, further “over 95% of world trade in volume terms moves by sea” (Kavussanos & Marcoulis, 2005)
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