The determinants of shipping rates: A North Atlantic case study

Abstract

This paper explores factors influencing the rates charged by liner shipping firms on the North Atlantic and, in particular, the influence customers type plays. The study makes use of a disaggregate data base to examine the role of factors such as cargo weight and nautical distance as determinants of standard (dry van) container rates. The nature of the customer (freight forwarder, consignee or shipper) is examined to reflect the influences of requirement variations on pricing in addition to that of the commodity cost of provision. The study uses basic statistical procedures to consider variability of rates and to relate these to the set of explanatory factors. No previous studies of conference pricing have included a customer type variable.