DRY BULK FREIGHT MARKET RESEARCH BASEDON CORRELATIONANDREGRESSIONANALYSIS

Abstract

Thecorrelationandregressionanalysisappliedtothefreightratesdemonstrates a fairly good results which is confirmed by the relevant estimates of the models.However, the impact of each determinant on the freight rates is not the same in the different timeperiod. Moreover, it is important to focus on the certain segment of dry bulk freight market moreaccuratelytoobtainthemathematicalmodelreflectingsegmentspecific.The study is aimed to develop the methodological basic for applying the correlation andregressionanalysistothefreightratesontheexampleofBalticPanamaxIndex.Various linear regression model structures for freight rates have been proposed,withappropriate detailing of the underlying market determinants. It has been determined that eachfreightmarketsegment is characterized a certain specificityofdemand,as wellas competitionwith other segments, these should be taken into account when building regression models. Theideas suggested have been applied to Panamax segment. The Panamax bulk carriers serve mostlythe grain, coal and ore; thus, these three types of goods are included in the model as demanddeterminants. The correlation and regression analysis were used to establish and mathematicallydraw the dependence of freight indexes on the set of the major freight market determinants ontheexampleoftheBalticPanamaxIndex.The output shows the obtained regression model can be used to predict the Baltic PanamaxIndex. Based on the forecasting of considered factors -seaborn grain trade, seaborn ore trade,seaborn coal trade, Panamax bulk carriers’ sector of merchant fleet, Panamax bulk carriersshipbuilding,Panamaxbulkcarriersscrapping,thevaluesoftheBalticPanamaxIndexforfollowingtimepointscanbeestimated.Two approaches were considered –the regression analysis for original data and forlogarithmically transformed data. Whether the first approach with the original data or the secondonewiththe logarithmically transformed data is applied,theresultsapprove theregressionanalysis use to establish the relationship between freight indexes (freight rates) and the set of themajor freightmarketdeterminants.Keywords: freight rates, Panamax bulk carriers, model, market determinants, maritimetransportation,forecast.