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Determinants of European freight rates: The role of market power and trade imbalance

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  • De Oliveira, Gabriel Figueiredo

Abstract

This paper investigates the determinants of freight rates between six European countries and 47 partners. We show that the inward freight rates are, on average, 23% higher than for outward ones, indicating that the cost of repositioning empty containers is mainly carried by European importers. Moreover, we have broken down the freight rates into basic ocean freight and surcharges in order to analyze the impact of each explanatory variable on these two components. It appears that basic ocean freight depends mainly on factors that define the structure of shipping lanes, while surcharges are more time sensitive.

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  • De Oliveira, Gabriel Figueiredo, 2014. "Determinants of European freight rates: The role of market power and trade imbalance," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 62(C), pages 23-33.
    • Handle: RePEc:eee:transe:v:62:y:2014:i:c:p:23-33
    DOI: 10.1016/j.tre.2013.12.001
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    1. Nikola Kutin & Zakaria Moussa & Thomas Vallée, 2018. "Factors behind the Freight Rates in the Liner Shipping Industry," Working Papers halshs-01828633, HAL.
    2. Ziaul Haque Munim & Hans-Joachim Schramm, 0. "Forecasting container freight rates for major trade routes: a comparison of artificial neural networks and conventional models," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 0, pages 1-18.
    3. Sun, Xiaolei & Liu, Chang & Wang, Jun & Li, Jianping, 2020. "Assessing the extreme risk spillovers of international commodities on maritime markets: A GARCH-Copula-CoVaR approach," International Review of Financial Analysis, Elsevier, vol. 68(C).
    4. Seyedvahid Vakili & Fabio Ballini & Alessandro Schönborn & Anastasia Christodoulou & Dimitrios Dalaklis & Aykut I. Ölçer, 2023. "Assessing the macroeconomic and social impacts of slow steaming in shipping: a literature review on small island developing states and least developed countries," Journal of Shipping and Trade, Springer, vol. 8(1), pages 1-25, December.
    5. Dominik Boddin & Frank Stähler, 2018. "The Organization of International Trade," CESifo Working Paper Series 7378, CESifo.
    6. Jungho Lee & Shang-Jin Wei & Jianhuan Xu, 2020. "The Welfare Cost of a Current Account Imbalance: A "Clean" Effect," NBER Working Papers 27276, National Bureau of Economic Research, Inc.
    7. Aldis Bulis & Sajal Kabiraj & Md Nur Alam Siddik, 2021. "Competitiveness Impedimental Factors of Latvian Manufacturing Companies in China," Global Business Review, International Management Institute, vol. 22(2), pages 290-310, April.
    8. Gabriel FIGUEIREDO DE OLIVEIRA & Nicolas PERIDY, 2015. "L’Impact Des Coûts A L’Échange Sur Le Commerce Des Pays Mena: Le Rôle Des Couts Directs Et Indirects Liés Au Transport Maritime," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 41, pages 125-147.
    9. Urciuoli, Luca, 2016. "What are the causes of transport insecurity? Results from a survey with transport operators," Transport Policy, Elsevier, vol. 47(C), pages 189-202.
    10. Wei, Shang-Jin & Lee, Jungho & Xu, Jianhuan, 2021. "The Welfare Cost of a Current Account Imbalance: A 'Clean' Channel," CEPR Discussion Papers 15805, C.E.P.R. Discussion Papers.
    11. Ziaul Haque Munim & Hans-Joachim Schramm, 2021. "Forecasting container freight rates for major trade routes: a comparison of artificial neural networks and conventional models," Maritime Economics & Logistics, Palgrave Macmillan;International Association of Maritime Economists (IAME), vol. 23(2), pages 310-327, June.

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