Like options on stocks, options on commodities provide firms with protection against adverse price movements. Many firms procure commodity at an offshore location and transport it via ocean freight. Increased globalization and increased demand for ocean-based transportation has resulted in ocean...

We present, for the first time in the literature, empirical estimates of the supply and demand curves for the ocean-going dry bulk sector, using a three-stage least squares methodology. Furthermore, we augment these functions with sentiment, which appears to have a positive and significant...

This paper aims at contributing to the literature in three ways: First, we re-evaluate the performance of popular Value-at-Risk (VaR) estimation methods on freight rates amid the adverse economic consequences of the recent financial and sovereign debt crisis. Secondly we provide a detailed and...

The mean-reverting nature of freight rates is one of the important subjects in maritime economics. The classic understanding of maritime economics (and that of the shipping industry) suggests that freight rate processes are mean-reverting and approach the level decided by the demand/supply...

Future market risk has always been a critical question in decision support processes. FORESIM is a simulation technique that models shipping markets (developed recently). In this paper we present the application of this technique in order to obtain useful information regarding future values of...