Analysis And Forecast Of The Capesize Bulk Carriers Shipping Market Using Artificial Neural Networks

Investing in the bulk carrier market constitutes a rather risky investment due to the volatility of the bulk carrier freight rates. In this study it is attempted to uncover the benefits of using Artificial Neural Networks (ANNs) in forecasting the Capesize Ore Voyage Rates from Tubarao to Rotterdam with a 145,000 dwt Bulk carrier. Initially, market analysis allows the assessment of the relation of some parameters of the dry bulk market with the evolution of freight rates. Subsequently, ANNs with an appropriate architecture are constructed and sufficient data, in terms of quantity and quality, are collected and organized so as to establish both the training and the testing data sets. The use of ANNs along with genetic algorithms allows the prediction of bulk freight rates with considerable accuracy for as long as eighteen months ahead and this is quantified by calculating the relative and absolute errors. It is concluded that ANNs offer a promising approach to forecasting the bulk market when coupled with efficient market modeling.

This book models price behaviour and forecasts prices in the dry bulk shipping market, a major component of the world shipping industry. Recent uncertainties in the world economy, shipbuilding developments and fleet changes mean the dry bulk shipping market has become extremely volatile, highly speculative and more sensitive to external shocks. In response to these challenging circumstances, this book models price behaviour and forecasts prices in various markets including the freight market, the new build ship market and the second-hand ship market. The authors have carried out an extensive investigation of dry bulk shipping over a 60-year period in diverse sub-markets, trading routes, market conditions and dry bulk vessels. The authors also propose a framework for analysing and modelling the economic processes of numerous variables in the dry bulk shipping market, making use of modern econometric techniques and other economic approaches. This will be especially useful for the control and assessment of risk for ship owners and charterers in ship operation, ship chartering and ship trading activities. This book will be extremely useful for shipbuilders, owners and charterers, as well as shipping analysts and policymakers. It will also be of great interest to academics and researchers concerned with the economics of the shipping industry.

Structural failures of bulk carriers continue to account for the loss of many lives every year. Capes are particularly vulnerable to cracking because of their large length, their trade in high density cargos, and the high rates of cargo operations. Rapid loss often occurs allowing little reaction time which has alarmed the industry. The Cape market is extremely volatile with ship values appreciating in some cases by over 500% and then returning to original levels, all within a few years. Recent market changes have rendered conventional pricing methods inaccurate and often inapplicable, resulting in a pressing need for alternate valuation models. Very little research combines the closely interlinked technical and financial elements which are crucial for valuation and decision making by various parties in the shipping industry. The present research involves the collection and analysis of one of the largest ship cracking surveys. It is focused specifically on capes which lie at the core of the problem and is based on the records of ship owners, classification societies and shipyards. A location coding system was specifically designed to analyze the data and present the frequency, size and estimated crack growth rates with respect to location and ship age. The results were compared with existing knowledge based on surveys conducted over the past 50 years, the stress distribution based on an investigation of loading patterns, and theoretical fracture mechanics predictions. They were then combined with the frequency of crack failures, derived from an investigation of an extensive fleet sample, to develop a reliability model which yields the hazard function throughout the ship's life. Repair procedures and design modifications were also examined and a model was designed to assess their cost effectiveness based on the present value of projected crack costs. The crack repair costs were calculated as a function of ship age to be used in conjunction with the safety assessment for decision making by ship owners, insurance companies, classification societies and others. A new state of the art valuation model was developed combining both technical and financial aspects in a fundamental valuation based on risk-adjusted discounting of expected cash flows. A forward view of the main parameters was obtained from derivatives and financial securities that include shipping futures, FFAs, options, interest rate swaps and inflation protected bonds. The inherent risk of cracks is treated as a fictitious credit risk, derived from the reliability model, and is incorporated into the discount rate along with other risk premiums. Other inputs include repair costs and off-hire time, which were calculated with respect to ship age using a database of repairs, while the records of public and private companies were used along with surveys to estimate operating expenses. The resulting valuations were found to be in very close alignment with recent transaction prices across all ship ages. The model also estimates the volatility of the ship value and uses it to price optionalities that are often included in ship transactions. The combination of technical and financial analysis of this thesis is valuable to many involved in the shipping industry including brokers, accountants, analysts, shipping banks and investors interested in valuation; ship owners when making managerial or investment decisions; shipyards when designing ships, setting prices and deciding payment structures and options; insurance companies when covering total loss or emergency repairs; the IMO when setting regulations; and classification societies when scheduling inspections and deciding which areas to focus on.

(Cont.) The industry and its development is analyzed before focusing on the current market and its prospects. Extensive analysis is carried out on a wide range of factors contributing to the outcome of the market in terms of freight rates, time charter rates, ship values and newbuilding prices. Examples include Chinese steel production and iron ore imports, Australian port congestion and queue lengths, oil prices, newbuilding orders and delivery times, the orderbook and the scrapping pool, all of which are at record high levels. Other factors include exchange rates, GDP growth, policies and demolition rates. The analysis is carried out using databases of newbuilding orders, fixtures and S & P transactions as well as a wide range of numerical data from a variety of sources. The futures market is also investigated, as well as its relation to the physical market. A wide range of current investment opportunities are finally considered from a buyer's and a seller's perspective. These are analyzed and compared before making the relevant recommendations.

A detailed statistical analysis of the cost structures of tankers and bulk carriers operating under open and traditional shipping registries, exploring their relationships with freight rates. The objective is to provide empirical evidence as to whether or not savings made by high-cost traditional operators by transferring to open registries are passed on to consumers by way of lower frieght rates. Annotation copyrighted by Book News, Inc., Portland, OR

This 1996 book explains the statistical framework for pattern recognition and machine learning, now in paperback.