Investigating the cyclical behaviour of the dry bulk shipping market
Van Vuuren, Gary
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Cyclical behaviour in the shipping market was investigated, for the first time, using Fourier analysis to extract cycle frequency information from data which have been Hodrick–Prescott filtered; in this case, dry freight earnings data. An industry rule of thumb asserts that shipping cycles last 7 years, but using a sample of daily dry charter earnings over a 21-year period, a prominent 4-year shipping cycle in the dry bulk sector is found, with a longer 7-year cycle superimposed. A better understanding of the shipping cycle will facilitate investment, since timing has been identified as a principal decision-driver.