A Dynamic Feedback System Analysis on the Mechanism of Shipping Freight

This study aims to investigate how congestions at ports affect the shipping freight market using a System Dynamics model, particularly in the liquified petroleum gas (LPG) maritime transportation market. We utilize maritime big data derived from the Automatic Identification System (AIS) for vessel tracking in the analysis. Our model captures the positive impact of port congestion, at its high level, on freight rate volatility when the shipping market is relatively in a tight condition. The proposed model provides insights into the shipping freight market development by innovatively considering port congestion level. The findings provide practical guidance for industrial practitioners to anticipate future freight rates based on the current congestion level and for port authorities to plan for infrastructure upgrades accordingly.