Do Tanker Pool Agreements Give a Comparative Advantage to their Members?

Pooling has been coming more and more in the limelight within the last few years as a response to both very challenging market conditions, increasing specialization of tonnage and as an alternative to corporate consolidations. This study provides an outline of the challenges shipowners nowadays face in the tanker sector; then explores and highlights the structure and other key issues of tanker pools; finally, it provides some statistical results of testing the simple hypothesis that the pool members have a comparative advantage against their competitors (those who operate their vessels independently). Moreover, Ordinary least-squares (OLS) regression has been used (it is a generalized linear modelling technique), which can apply to single or multiple explanatory variables and also categorical explanatory variables that have been appropriately coded. We proceed on the model building in which we introduced two explanatory variables: the time charter equivalent and the categorical variable which illustrates whether the company participates in a pool agreement or not in a specific period of time. By establishing this dummy variable we expect it will provide us with enough evidence to support our hypothesis or not. The key performance indicator which is going to be used in our model as dependent variable is the stock prices of eight listed tanker shipping companies because is a common method of valuating companies’ performance as well as an indicator about the health of the company. The analysis could not detect any significant relationship related to the operating results from participating in a pool agreement with the stock prices and thus we cannot argue that there is enough evidence for supporting our hypothesis.