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      Panamax markets behaviour: explaining volatility and expectations

      review-article
      1 , , 2
      Journal of Shipping and Trade
      Springer Singapore
      Panamax Markets, Expectations, Time Lag, Volatility

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          Abstract

          It is widely accepted that the highly volatile Panamax market has many peculiarities; for example, Panamax vessels transport the major and the minor dry bulk cargoes worldwide. In contrast, the variety of cargoes and the flexibility in various trade routes, which the Panamax vessels follow, create a broad market with a relatively open structure. The importance of the Panamax market has also been highlighted by a recently upgraded contribution of the Baltic Panamax Index (BPI) to the Baltic Dry Index (BDI), affecting the progress of the BDI significantly. This paper investigates the behaviour of the Panamax market focusing on expectations and time lags. Expectations play a critical role in the freight market both for short-term and long-term decision making. In particular, we investigate the relationship between time lags and time-charter, trip and spot market rates, and the average earnings of the Panamax vessels of various ages. Time series analysis is used to reach our conclusions. The Hannan–Quinn criterion has been selected to identify the Panamax freight market’s significant lags for 1989–2020. An autoregressive model (AR) has been constructed to perform the statistical analysis. The findings indicate a strong correlation between time lags and the Panamax freight market, forecasting the behaviour of the market indeed. A better understanding of the Panamax market’s behaviour can improve shipowners and charterers’ planning decisions practically.

          Supplementary Information

          The online version contains supplementary material available at 10.1186/s41072-021-00096-0.

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          Shipping Markets in Turmoil: An analysis of the Covid-19 outbreak and its implications

          In the current study, we examine, for the first time in the literature, the impact of exogenous effects in the shipping industry by employing data from the recent Covid-19 pandemic outbreak and explore the reactions of freight rates for dry bulk, clean, and dirty tankers. Our results, using both GARCH (1,1) and VAR specifications, suggest that such events are directly affecting the dry bulk and the dirty tanker segments. In addition, the results also suggest that second round effects, mostly via the decline in oil prices and, in some cases, third round effects via the impact from the stock market, also exist. Finally, by employing daily port calls a proxy variable for the demand for transportation services, we show that both the dry bulk and clean tankers are highly affected by the demand side of the economy, while vessels which transport crude oil do not register such a relationship.
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            Forecasting spot and forward prices in the international freight market

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              Rational Expectations Equilibria, Learning, and Model Specification

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                Author and article information

                Contributors
                john_karaoulanis@yahoo.gr
                pelagidi@unipi.gr
                Journal
                J. shipp. trd.
                Journal of Shipping and Trade
                Springer Singapore (Singapore )
                2364-4575
                19 October 2021
                19 October 2021
                2021
                : 6
                : 1
                : 15
                Affiliations
                [1 ]GRID grid.4463.5, ISNI 0000 0001 0558 8585, University of Piraeus, ; 80, Karaoli & Dimitriou, 18534 Pireas, Greece
                [2 ]GRID grid.4463.5, ISNI 0000 0001 0558 8585, Deputy Governor of Bank of Greece, , University of Piraeus, ; Pireas, Greece
                Author information
                http://orcid.org/0000-0001-7762-9438
                Article
                96
                10.1186/s41072-021-00096-0
                8523285
                94d2f001-c965-4a4f-a7fd-0e7e2ebf25bc
                © The Author(s) 2021

                Open AccessThis article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.

                History
                : 26 February 2021
                : 27 September 2021
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                © The Author(s) 2021

                panamax markets,expectations,time lag,volatility
                panamax markets, expectations, time lag, volatility

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