Bulk Shipping Market

Abstract

There are four separate but interrelated markets in shipping, namely, the freight market, which trades sea transport, the second-hand market, which trades used ships, the new building market, which trades new ships, and the demolition market, which deals with scrap ships. These four shipping markets are closely interrelated. This chapter aims to provide insights into the four shipping markets and explain how these separate markets interact to affect one another. We discuss an empirical study which shows that seaborne trade significantly affects fleet size and the freight rate. On the other hand, fleet size is affected by the freight rate, and the latter has a significant impact on vessel prices.