"The Bulk Shipping Business: Market Cycles and Shipowners’ Biases"

Despite a strong linkage with the macro-economic course, the bulk shipping market, in the short period, follows a typical cyclic pattern, where continuous freight adjustments balance demand and supply movements. In this context—widely unstable but quite regular in its general scheme—the shipowners may have enough competencies and information to take logical and consistent decisions about ship purchasing and chartering. Yet, why do they periodically make mistakes? The analysis of shipowners’ behaviour provides a reasonable answer: mistakes incur when they ignore or undervalue the market trends, following their personal intuition or even unwisely imitating their competitors. The analysis of the Handysize segment among the bulk shipping business offers a significant example of the lack of timeliness in shipowners’ behaviour: after a long period of disregard, operators began to notice the opportunities of this market niche and they are now heavily investing in minor units. Maybe it’s not too late, but the market has already changed and only a few brave—or lucky—shipowners took advantage of the magic moment.