The impact of ship scrapping subsidies on fleet renewal decisions in dry bulk shipping

Zhongzhen Yang, Zhenfeng Jiang, Theo Notteboom and Hercules Haralambides

Transportation Research Part E: Logistics and Transportation Review, 2019, vol. 126, issue C, 177-189

Abstract: We introduce a novel dimension to the fleet renewal decisions of a shipping company, taking into account the effects of ship scrapping subsidies. The fleet renewal behavior of a company is analyzed with focus on early scrapping decisions prompted by the subsidy. We present a fleet renewal decision model which maximizes firm profit given market demand and the features of a scrapping subsidy. To assess the effects of a potential subsidy on corporate decisions, we compare the optimal fleet renewal schemes with and without the subsidy. We calculate the outcome of such a policy measure for China COSCO Shipping.

Keywords: Ship scrapping subsidies; Fleet renewal; Time-series forecasting; Dry bulk market; COSCO (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (5)

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DOI: 10.1016/j.tre.2019.04.008

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