ICS lunch talk: Economic Analysis of Bulk Shipping Market
ICS Canada held a lunch talk in Montreal on May 24th 2018. The topic was “Maritime Trade & the World Economy” and we were honoured to have Professor Theodore Papageorgiou from the Economics Department at McGill University as our speaker. The presentation was based on his recent academic paper “Geography, Search Frictions & Endogenous Trade Costs”. We were extremely happy to also have one of paper’s co-authors, Professor Myrto Kalouptsidis from the Department of Economics at Harvard University, on hand to provide additional insight and help answer questions.
In his presentation, Prof Papageorgiou gave a very clear and enjoyable explanation of some of his recent research on dry bulk shipping markets. He started by making observations of patterns in ship movement and ship contract data. He then built a theoretical economic model that captured the behaviour of both shipowners and charterers and in doing so, he incorporated both the geographic interdependence within the entire global network of countries as well as the challenges in the ship-cargo matching process in determining trade costs and trade flows. The model was then applied to show the impact of various events (improvements in ship efficiency, a slowdown in China’s economy, the opening of the Northwest Passage, reduced search frictions) on world trade patterns.
The presentation was well attended including major ship operators Fednav, Canfornav & Canada Steamship Lines, shipbrokers Summit Maritime and Gibsons and the Port of Montreal and the presentation gave rise to many questions and comments. In the end, it is believed that everyone who attended the talk came away with a much greater appreciation for the economic analysis of shipping markets, the complexities involved but also the insights it can provide!
A copy of the academic paper on which Prof Papageorgiou’s presentation was based is available here:
Reviews of some of the issues raised in the paper are available here:
– Quartz
– Fraser Forum
ICS Canada thanks the speakers and participants for making the event a success! As with all our lunch talks, we hope to provide an opportunity to network and learn over a enjoyable lunch. As always, we are grateful to the Shipping Federation of Canada for allowing us to use their boardroom and for their support.
