Volatility Of Freight Rate In VLCC Shipping Market

The crude oil is an important resources, which plays an important role in development of national economy. So oil trade influences the development of economy in any country. As a derivative demand of oil trade, tanker transportation is an important part of international shipping market, and the freight is influenced by some factors, such as global politics, economy, and oil price, which make the volatility and risk in the shipping market. More and more companies pay attention to the VLCC shipping market. It is necessary to investigate the volatility for risk management in the market.Firstly, the paper researches the references on oil shipping market at home and abroad, and VLCC shipping market situations are analyzed, including market demand, market supply, shipping routes, and the price, which lay the foundation for the next. Secondly, the paper introduces the modes researching the volatility, including ARCH model, GARCH model, and TGARCH model.Thirdly, the paper applies the GARCH model and TGARCH model to investigate the persistence and leverage effect on five routs (TD3、TD4、TD2、TD1、TD15).In the end, the paper get the conclusions, and puts forward some advises for VLCC shipping companies.The purpose of the paper is to offer theory and practice guidance for the development of these companies.