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Leggate, Heather K. (2000) The impact of exchange rate fluctuations on the shipping industry. Doctoral thesis, London Guildhall University.
The international shipping industry has certain characteristics, which make it particularly vulnerable to exchange rate risk. While the commercial world recognises such risk, neither the shipping industry nor academia have yet tried to quantify or evaluate the extent of the problem. This thesis attempts to fill this intellectual void.
These characteristics specific to the shipping industry are: first, its unique freight rate structure which, being fixed in US Dollars, necessitate subsequent conversions into a variety of other currencies, and second, its low profit margins, both at operating and net levels, which serve to exacerbate the impact of exchange rate volatility. Susceptibility is relative to the economic and commercial environment of the different shipping nations and, accordingly, this analysis takes account of this by examining two particular nations, namely Norway and Japan, which have been subject to different experiences. It sets out to examine their shipping industries and their differing response to exchange rate management in the light of these varying experiences, and to assess their companies, both from a corporate and market perspective, using the performance indicators of operating profit and share price returns. Principal instruments of evaluation are mainly quantitative, in the form of statistical analysis of unpublished data, but also qualitative, in terms of discussion with industry experts in situ.
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