Predictive modelling in the shipping industry: analysis from supply and demand sides

Abstract

Purpose

Maritime transportation plays an important role in facilitating both the global and regional merchandise trade, where accurate trend prediction is crucial in assisting decision-making in the industry. This paper aims to conduct a macro-level study to predict world vessel supply and demand.

Design/methodology/approach

The automatic autoregressive integrated moving average (ARIMA) is used for the univariate vessel supply and demand time-series forecasting based on the data records from 1980 to 2021.

Findings

For the future projection of the demand side, the predicted outcomes for total vessel demand and world dry cargo vessel demand until 2030 indicate upward trends. For the supply side, the predominant upward trends for world total vessel supply, oil tanker vessel supply, container vessel supply and other types of vessel supply are captured. The world bulk carrier vessel supply prediction results indicate an initial upward trend, followed by a slight decline, while the forecasted world general cargo vessel supply values remain relatively stable. By comparing the predicted percentage change rates, there is a gradual convergence between demand and supply change rates in the near future. We also find that the impact of the COVID-19 pandemic on the time-series prediction results is not statistically significant.

Originality/value

The results can provide policy implications in strategic planning and operation to various stakeholders in the shipping industry for vessel building, scrapping and deployment.