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We introduce a novel dimension to the fleet renewal decisions of a shipping company, taking into account the effects of ship scrapping subsidies. The fleet renewal behavior of a company… Click to show full abstract
We introduce a novel dimension to the fleet renewal decisions of a shipping company, taking into account the effects of ship scrapping subsidies. The fleet renewal behavior of a company is analyzed with focus on early scrapping decisions prompted by the subsidy. We present a fleet renewal decision model which maximizes firm profit given market demand and the features of a scrapping subsidy. To assess the effects of a potential subsidy on corporate decisions, we compare the optimal fleet renewal schemes with and without the subsidy. We calculate the outcome of such a policy measure for China COSCO Shipping.
Journal Title: Transportation Research Part E: Logistics and Transportation Review
Year Published: 2019
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