Abstract:

Maintaining a tight operating ratio between the container and shipboard slot is vital to the success of ocean carriers. An operating ratio approaching 2:1 is generally viewed as achievable on major deep-sea trades, and is thought to be optimal in terms of efficiency without compromising service. By examining the liner industry’s data, this paper found that the rule of thumb can provide additional insights into the long-run capital structure adjustments in deploying container fleet. According to the existing empirical evidences, a linear production function and its related Leontief cost function are employed to explore the variation in capital structure of the world’s container fleet.