Comparisons of Volatility in the Dry-Cargo Ship Sector: Spot versus Time Charters, and Smaller versus Larger Vessels

This paper compares volatility estimates between time-charter and spot rates between different sizes of dry bulk vessels. Time-charters are more volatile than spot rates, and small vessels are less risky than larger ones when spot rates are used. Ship owners who are risk averse should utilise the spot market in preference to time-charters, and invest in smaller vessels.