Evaluating the impact of COVID-19 on capesize and panamax sectors: the method of empirical mode decomposition

This paper assesses quantitatively the impact of COVID-19 on the Capesize as well as the Panamax sectors using the event analysis method based on the ensemble empirical mode decomposition (EEMD). Different components are decomposed from the freight rates time series. The decomposed dominant modes manage to capture the event of COVID-19, accounting for the major movements of the freight market. The event of 2008 financial crisis is utilized as a benchmark to analyze the impact of COVID-19. Compared to the 2008 financial crisis, the dominant modes during COVID-19 rebound in quite a short time. Factors contributing to the decline of freight rates during the COVID-19 pandemic are relatively simpler than during the 2008 financial crisis, indicating that the COVID-19 should not have a long-lasting impact on the dry bulk shipping market. The results not only prove that the method used in this paper is capable of evaluating the impact of future events on the freight market but also provide some practical implications to the maritime industry.