In this video, Matthew Spaniol (Aarhus University) presents the interim results from the Interreg vb North Sea PERISCOPE project, a foresight study that involved scanning the horizon from the bird’s nest to identify the innovations that will impact the blue economies in the future, and the accompanying forecasting results that timestamp when in the future the innovations are expected to become commercially available. The session was developed in collaboration with MARLOG.
This study presents a novel approach to forecast freight rates in container shipping by integrating soft facts in the form of measures originating from surveys among practitioners asked about their sentiment, confidence or perception about present and future market development. As a base case, an autoregressive integrated moving average (ARIMA) model was used and compared the results with multivariate modelling frameworks that could integrate exogenous variables, that is, ARIMAX and Vector Autoregressive (VAR). We find that incorporating the Logistics Confidence Index (LCI) provided by Transport Intelligence into the ARIMAX model improves forecast performance greatly. Hence, a sampling of sentiments, perceptions and/or confidence from a panel of practitioners active in the maritime shipping market contributes to an improved predictive power, even when compared to models that integrate hard facts in the sense of factual data collected by official statistical sources. While investigating the Far East to Northern Europe trade route only, we believe that the proposed approach of integrating such judgements by practitioners can improve forecast performance for other trade routes and shipping markets, too, and probably allows detection of market changes and/or economic development notably earlier than factual data available at that time.
This study introduces a state-of-the-art volatility forecasting method for container shipping freight rates. Over the last decade, the container shipping industry has become very unpredictable. The demolition of the shipping conferences system in 2008 for all trades calling a port in the European Union (EU) and the global financial crisis in 2009 have affected the container shipping freight market adversely towards a depressive and non-stable market environment with heavily fluctuating freight rate movements. At the same time, the approaches of forecasting container freight rates using econometric and time series modelling have been rather limited. Therefore, in this paper, we discuss contemporary container freight rate dynamics in an attempt to forecast for the Far East to Northern Europe trade lane. Methodology-wise, we employ autoregressive integrated moving average (ARIMA) as well as the combination of ARIMA and autoregressive conditional heteroscedasticity (ARCH) model, which we call ARIMARCH. We observe that ARIMARCH model provides comparatively better results than the existing freight rate forecasting models while performing short-term forecasts on a weekly as well as monthly level. We also observe remarkable influence of recurrent general rate increases on the container freight rate volatility.