This paper investigates the nature of seasonality (deterministic and/or sto
chastic) in dry bulk freight rates, and measures and compares it across fre
ight rates of different vessel sizes (Capesize, Panamax and Handysize), con
tract duration (spot., 1-year and 3-year time charters) and market conditio
ns (peaks and troughs). Although, there is no evidence of stochastic season
ality, deterministic seasonality in freight rates is found to be varying fr
om -18.2% to 15.3% in individual months within a year. Spot rates for large
r vessels exhibit higher seasonal fluctuations compared to smaller vessels,
although differences in seasonal fluctuations between sectors are eliminat
ed as the contract duration increases. Also, for each vessel size, the seas
onality declines as the contract duration rises. Asymmetries in seasonal fl
uctuations in freight rates over different market conditions are attributed
to the high and low elasticities of supply expected under the respective m
arket conditions. The results have implications for tactical shipping opera
tions such as timing of dry-docking, chartering strategies and switching be
tween freight markets. (C) 2001 Elsevier Science Ltd. All rights reserved.