Framework Development of Shipping Market Early-Warning System by Using Prosperity Index: A Case Study of Shanghai Dry Bulk Shipping Market

The shipping market is always in volatility according to complex impact factors. In order to better evaluate the conditions of the shipping market and to make proper market early warning (EW), the authors consider the volume, value level and other factors of shipping industry, simulate the structure Analytic Hierarchy Process (AHP) and establish the index system of shipping prosperity, apply the time difference correlation analysis and cluster analysis. Then, these indicators are classified into three categories of the leading, coincident and lagging indicators. In terms of theory of the economic cycle, diffusion indices and composite indices of global shipping prosperity are presented by using the method of factor analysis, which predicts composite indices and market situation with the prosperity index curve and signals, and collects the statistics of Shanghai and global maritime economy in recent three years as a case study. The very case illustrates Shanghai dry bulk shipping prosperity indices and the results, and comprehensively assesses the dynamic process of the global industry prosperity. The early warning methods could be introduced to solve shipping market monitoring problems. This study aims at developing an early warning system for shipping market and evaluating its performance. This system can provide early indications of market crisis by using the prosperity index and evaluating its performance.