Author(s)

Alexandros M. Goulielmos^1,2

¹Faculty of Maritime and Industrial Studies, Department of Maritime Studies, University of Piraeus, Piraeus, Greece.
²Emeritus of Shipping, Transport and Logistics Department, Business College of Athens, Athens, Greece.

Most of the past research dealt mainly with freight rates. Here we dealt mainly with shipping earnings. A general opinion is that shipping industry is a risky one, and thus we mentioned the failure of Economics to define risk properly, which we did. We investigated also why shipowners insisted in earning 7.2% return on investment, while S + P 500 provided 14.1% (1975-2001). We showed that Maritime economists are stuck in the belief that the bigger the ship- and more volatile- the more profit…she provides. But maritime literature proved that the more you risk, the less you get in shipping businesses! Our method is mainly statistical, and we showed that Stopford in 2009, proved that earnings from ships are leptokurtic in their distribution, with a fat RHS tail… Moreover, Stopford worked-out a model of a shipping company, which he called it “perfect”. We reviewed this, in 3 aspects, to see its perfection: investment, depreciation and dividend policy. We worked-out a comparison with “a hypothetical perfect Greek shipping company”. We also presented a new concept: “the customizable supply of ships” to indicate who gains the lot in shipping. Our main conclusion is that neither asset playing or chartering made certain shipowners millionaires like Onassis, but luck!

Shipping Earnings at 7.2% Return on Investment, A Proper Definition of Risk, Big Ships-High Volatility-High Profits? Shipping Monopolistic Competition? Leptokurtosis in Earnings, Perfect Shipping’s Investment-Dividend & Depreciation Policy versus a Perfect Greek Shipping Company

Goulielmos, A. (2022) Shipping: How a Low-Earnings Industry Has Created Very Rich Owners? The Stopford’s Paradox. Modern Economy, 13, 1409-1434. doi: 10.4236/me.2022.1310076.