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Multi-Criteria Decision Making in Maritime Studies and Logistics pp 219–247Cite as

Financial Performance Evaluation of Shipping Companies Using Entropy and Grey Relation Analysis

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Part of the book series: International Series in Operations Research & Management Science ((ISOR,volume 260))

Abstract

The international trade of Korea and Taiwan has been heavily dependent upon international sea transportation owing to geo-political aspects. Therefore, the two countries have promoted ocean-going shipping industry in order to support their export-oriented economies. Recent financial crisis in together with the economic slowdown has reduced seaborne trade cargoes, which resulted in remarkably deteriorated revenues of the container shipping sector. Major container shipping companies of both countries such as Evergreen, Yang Ming, Hyundai, and Hanjin under our study are no exception. This chapter aims to achieve two-fold aims. The first applies Entropy to find the relative weights of financial ratios of the four companies each year. In so doing, we can find the weights variance for the period of 1999–2009 based on the financial performance of the above companies. The second aim is to evaluate financial performance of the companies in the period by grey relation analysis. The findings in this chapter help shipping managers to mitigate impacts of the financial crisis on their companies.

This chapter is a reprint of Lee TW, Lin CW, Shin SH (2012) A Comparative Study on Financial Positions of Shipping Companies in Taiwan and Korea Using Entropy and Grey Relation Analysis. Expert Systems with Application, 39(5): 5649–5657. The authors have slightly revised it. They would like to express their sincere thanks to the Elsevier Publisher for giving them its copyright permission for this book chapter.

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Notes

  1. 1.

    For example, as of November, 2009, prices were falling throughout the industry. In the spring, large commercial shipping companies like Maersk and Hapag-Lloyd were still charging about $2,000 (€1,600) to ship a container from Asia to Europe. Some companies collected only $500 (€400) for the same service. In the spring in 2008, it cost $30,000 (€24,000) a day to charter a ship containing 2,500 standard containers (TEU). As of 5th December 2008, that price dropped to less than $12,000 (€9,600). Alexander Jung, Thomas Schulz and Wieland Wagner (2009), “Shipping industry drowning in financial woes”, Der Spiegel, August 14 2009.

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Author information

Authors and Affiliations

  1. Ocean College, Zhejiang University, Zhoushan, 316021, Zhejiang Province, China

    Paul Tae-Woo Lee

  2. Department of Logistics and Shipping Management, Kainan University, Taoyuan City, Taiwan

    Cheng-Wei Lin

  3. Department of Logistics and Maritime Studies, The Hong Kong Polytechnic University, Kowloon, Hong Kong, SAR, China

    Sung-Ho Shin

Authors
  1. Paul Tae-Woo Lee
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  2. Cheng-Wei Lin
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  3. Sung-Ho Shin
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Corresponding author

Correspondence to Paul Tae-Woo Lee .

Editor information

Editors and Affiliations

  1. Institute of Maritime Logistics, Ocean College, Zhejiang University, Zhoushan, Zhejiang Province, China

    Paul Tae-Woo Lee

  2. School of Maritime and Mechanical Engineering, Liverpool John Moores University, Liverpool, United Kingdom

    Zaili Yang

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Lee, P.TW., Lin, CW., Shin, SH. (2018). Financial Performance Evaluation of Shipping Companies Using Entropy and Grey Relation Analysis. In: Lee, PW., Yang, Z. (eds) Multi-Criteria Decision Making in Maritime Studies and Logistics. International Series in Operations Research & Management Science, vol 260. Springer, Cham. https://doi.org/10.1007/978-3-319-62338-2_9

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