Study on Volatilities of Freight by Different Operations in Panamax Dry Bulk Shipping Market

The paper aims to develop a methodology to compare different shipping operations, taking Panamax dry bulker as an example, which are of different features against risks incurred by the volatilities in shipping market. After basic statistical analysis on the volatilities, R/S (Rescaled Range) method and GPH (Geweke & Porter Hudak) method are employed to test the persistence of the volatilities. Moreover FIEGARCH (Fractionally Integrated Generalized Auto Regression Conditional Heteroskedastic) is furthered to model characteristics of the volatilities in the market, which demonstrates that different feedback against the volatilities lie in different shipping operational properties. Hereby decision makers can make an evaluation on different shipping operations and then implement the optimal one to smooth impacts of the fluctuations in shipping market.