A Pilot AHP Analysis of Lay-Up Decision Making in the Dry Bulk Market

Abstract

Deciding the lay-up of a vessel in an unfavorable market environment has drawn research attention over 2015-6 as the reaction of shipping companies to the freight crisis seemed drastically different compared to past ones. Focusing on the dry bulk market - where historical negative freight index records were set since 2015 - the paper approaches for the first time the lay-up decision-making process from a micro angle. The authors construct an AHP hierarchy of criteria and sub-criteria involved in the lay-up decision by shipping management. Through a short questionnaire addressing shipbrokers, we proceed to validate first the proposed set of criteria. Evaluation data are then sourced from a small number of AHP questionnaires completed by bulk carrier companies across three maritime countries in order to reveal criteria weights and the rating of alternatives in a shipping recession context. Capturing the relevance of criteria and sounding a number of bulk carrier owners and managers, through this original pilot attempt, is the first step towards a more extended survey and the creation of a robust multi-criteria tool for more informed lay-up decisions.