Does quality pay? The case of the dry bulk market

Following important changes in the safety regulation of tankers, the dry bu lk sector is coming under the spotlight in a safety and quality perspective . Nominal freight differentiation between 'quality' and 'other' tonnage has been observed occasionally and much lip service has been paid to promoting the need for younger and safer ships. Whether or not these signals actuall y manifest in a marker initiative for the enhancement of the standards of t he world bulk carrier fleet is debatable. This paper investigates the possi ble existence of a two-tier spot freight market for medium and large bulk c arriers of differing age. Known voyage fixtures are investigated for four r epresentative years since the end of the 1980s, during which contrasting fr eight market conditions prevailed. In all but very few cases, there was no statistically significant difference between rates paid to older and younge r tonnage. In those few cases where such differences were statistically sig nificant, they never exceeded 10%. (C) 2000 Elsevier Science Ltd. All right s reserved.