Factors Affecting the Selection of Charter Party Contract Type in the Bulk Shipping Market

Abstract

Purpose: This study provides to charter companies, including shippers, implications for charter party decision-making by identifying factors that affect the selection of contract types in the dry bulk shipping market. Research design, data, and methodology: For empirical analysis, the dependent variable was set as a choice between time charter and voyage charter, and the independent variables were set as company and cargo characteristic factors, company internal environmental change factors, and company external environmental change factors. A hypothesis test was conducted using 111 questionnaires. Results: Variables such as cargo volume and ship size were found to have a significant impact on the choice of charter contract. Company characteristics, investment propensity, and risk management factors were significant as a company's internal environmental factors. All variables, including market outlook, volatility, and cost factors, were statistically significant as a company's external environmental factors. Conclusions: Investment decisions and the outlook for future shipping market conditions are important factors to consider in decision-making as to the type of charter contract. Therefore, it is important for shippers as charters to obtain quick and accurate information on the shipping market.