Associate Professor Ziaul Haque Munim at the School of Business and Law at UiA is researching the predictive analytics of container shipping rates for international transport. He received the KLU Young Researcher Best Paper Award, for one of his latest research projects.
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"More than 80% of all international trade happens at sea, something which is easy to forget in everyday life. Sea transport is popular because of the low rates compared to road and rail, but it is hard to know the exact rate for shipping one container in a future date due to the complex market dynamics," Munim says. “For instance, the cost of shipping a container from China to Northern Europe on August 31 was USD 933, but a week later on September 7, it dropped to USD 885,” he adds.
More capacity than demand
He submitted his paper to the conference International Association of Maritime Economists which was held in Mombasa, Kenya 18-21 September. “Forecasting Container Shipping Freight Rates for the major trade routes: a comparison of artificial neural network and conventional models”, co-authored with Dr. Hans-Joachim Schramm from Vienna University of Economics and Business, Austria.
"Being able to forecast shipping freight rates is very useful for the shipping companies. Currently, there is more capacity than demand, so by knowing the expected rate, it is easier to schedule ship assignment on different routes," Munim says.
Might save millions
The forecasting methods he has investigated forecasts rates a week in advance, but long-term forecasting is also possible using the same methods.
"Long-term forecast of rates helps to make new shipbuilding decisions. However, the accuracy of forecasts becomes poor, the further ahead in time they are made, but still they have the potential of saving millions of dollars of shipping companies and shippers," Munim says. He further plans to develop new forecast modelling techniques using machine learning.