MEL Policy on the use of Artificial Intelligence

Over the past decade, the editors of Maritime Economics & Logistics (MEL) have acquired considerable experience in evaluating the originality, coherence and intellectual contribution of submitted manuscripts. Where there are strong indications that a manuscript has been produced predominantly by generative AI rather than by its listed authors, the corresponding author will first be contacted to discuss the matter and to eliminate the possibility of misunderstanding. If these concerns cannot be satisfactorily resolved, the manuscript will be rejected.

There is little doubt that generative AI is now capable of producing text of remarkable quality and, in many areas, writing that rivals or even surpasses that of human authors. This technological progress is undeniable and will continue to reshape academic research. However, the purpose of a scholarly journal is not merely to publish well-written papers. Equally important is the certification that the published work represents, the intellectual contribution, critical judgment and scientific responsibility of the named authors.

For this reason, MEL expects authors to only use specialized language software for linguistic improvement, if necessary, rather than AI agents. By maintaining this policy, MEL reaffirms that responsibility for research quality, originality and academic advancement rests with authors and with the institutions and committees responsible for evaluating and promoting them, rather than with artificial intelligence.

Professor HE Haralambides
MEL Editor-in-Chief

P.S. On a different matter, please be reminded that MEL reviews submissions only if the accompanying Cover Letter is drawn on our template, to be found on our website under ‘submissions’.

  

My Neil Kinnock years (1994-1998)

My four-year work (1994–1998) as a member of EU Transport Commissioner Neil Kinnock’s (Lord Kinnock today) ‘wise men group’ coincided with a formative period in European maritime policy. It was a time when the European Union was beginning to articulate, in earnest, a coherent vision for its ports and shipping industries, long before such issues would acquire the urgency they command today. From this work emerged two landmark documents: the Strategy Document Towards a New Maritime Strategy and, shortly thereafter, the Green Paper on Ports and Maritime Infrastructure (1996–1998). The latter was the kindle wood for all my subsequent writings on port pricing.

 The stories I could recount here are endless, but I remember and always quote this one: One day, while the committee was having a sumptuous lunch in Brussels, Kinnock walks in the (private) room quite unexpectedly. “so, you decided to spend your time on port pricing?”, he said with a big smile, before he even said hello. “Well, I promise you one thing: you will continue struggling with the same subject until your retirement”. And with hindside he was right (two of my unpublished submissions to the Commission on the Green Paper appear in my forthcoming book; in the meantime they can be found in my Google Scholar and ResearchGate profiles).

The Strategy Document was unveiled in 1996 at a high-level conference of the Commission in Barcelona. Serving as rapporteur there, and well before the advent of the euro, I delivered a statement that at the time struck many as both audacious and unsettling in its clarity: «a monetary union is inconceivable without harmonization and fiscal discipline». The remark, preserved in the official proceedings of the Commission, and widely reported in the press, captured in a single sentence a structural weakness that Europe would only fully confront more than a decade later, in the aftermath of the global financial crisis of 2008–2009. In retrospect, what appeared provocative was, in fact, prescient.

The intellectual momentum of this period extended beyond policy documents into scholarly work. It found expression in my book Quality Shipping: Market Mechanisms for Safer Shipping and Cleaner Oceans, first presented in London by Lord Kinnock together with the then UK transport minister, Glenda Jackson (yes, the same shining star of ‘Women in Love’ (1970) and ‘A Touch of Class’ (1973), both Academy Awards). The book marked a decisive shift in the discourse on maritime safety and environmental performance. Rather than treating “quality” as a technical or regulatory matter confined to shipowners, it framed it as an economic phenomenon embedded in incentives and market behavior. In this view, responsibility for substandard shipping could not be isolated. It diffused across the entire maritime ecosystem: to the charterer who opts for the lowest-cost vessel irrespective of its condition, to the financial institution willing to underwrite the acquisition of such a ship, to the insurer that assumes its risks, and to the classification society that certifies its seaworthiness. By extending accountability along this chain, the concept of “quality shipping” became both broader and more demanding, ultimately laying the intellectual foundation for the 'Quality Shipping Campaign' of the European Union that would later be embraced by major maritime nations, with Japan among the first to respond.

Yet perhaps my most enduring contribution during this period lies in my insistence on the role of fiscal harmonization in infrastructure investments --particularly investments in transshipment capacity-- among economically interdependent and geographically proximate states such as those of the European Union. This was not an abstract proposition. It spoke directly to the functioning of ports as nodes within integrated transport and logistics systems, where national policies on taxation, depreciation and the public financing of ports can distort cross-border competition.

These concerns found their way into the Commission’s Green Paper and continued to shape the trajectory of European port policy in the years that followed. Indeed, they remain strikingly relevant. The questions raised then still define the contours of today’s debate: Are port investments, especially in capital-intensive container terminals, to be regarded as public goods, or as commercial ventures subject to market discipline? Should pricing policies aim at recovering the full cost of infrastructure, or at maximizing throughput and connectivity? To what extent do divergent national rules on depreciation and state support distort competition between ports that, in economic terms, share the same hinterland?

Equally contentious is the issue of financing capacity aimed at attracting transshipment traffic; i.e., cargo that, by definition, is footloose and internationally contestable. Should public funds, whether national or regional, be deployed to capture such traffic from neighboring ports within the same economic space? Ιf so, under what conditions? And how about the practice of cross-subsidization? that is, charging higher tariffs to captive domestic cargo in order to subsidize transshipment flows? Is competition law applicable to such discrimination?

What emerges from this body of work is not merely a set of policy propositions, but a coherent analytical framework; one that situates ports within the broader political economy of Europe. It is a framework that recognizes the tension between national sovereignty and economic integration, between public interest and commercial logic, and between competition and coordination. In this sense, the debates initiated in the 1990s were not resolved; they were, rather, the opening chapter of a conversation that continues to this day.

HH
Anno Domini 2026, June: the cherry month
Dalian, "the pearl of the north"

 

 

INCOTERMS and the incidence of transport costs: He who pays the piper (does not always) call the tune

When we were talking about INCOTERMS last week, and how responsibilities and costs are shared between the exporter and the importer, one of my students asked who actually decides the terms of trade, given that both parties would also like to make money from arranging ocean transportation. Put simply, the exporter would prefer to sell on a CIF basis and deliver the goods to the other side, while the importer would prefer to buy on an FOB basis and arrange transportation themselves. The answer is not difficult, and there are many examples: It is the one with the strongest bargaining position.

A classic example of this is trade between the United States and China. Large American retailers such as Walmart and Home Depot often purchase goods on a free on board (FOB) basis from Chinese ports, such as Shanghai or Shenzhen. Their substantial buying power enables them to dictate terms to Chinese exporters. By buying FOB, American importers control ocean transport, negotiate directly with shipping lines, consolidate cargo volumes and enjoy economies of scale in logistics. However, the reverse may occur in sectors where Chinese exporters possess stronger bargaining power or specialised know-how, for example in certain machinery or turnkey equipment exports. In these cases, large Chinese state-owned importers such as Sinopec and CNOOC increasingly prefer FOB purchases, as this supports the expansion of Chinese tanker companies and maritime services.

Similarly, we observe CIF sales, particularly to smaller overseas buyers, in the case of Germany’s high-value industrial exports, such as capital goods, chemicals, and specialised engineering products. The technological superiority and strong brand position of German manufacturers gives them the leverage to organise transport themselves, often through long-standing relationships with freight forwarders, insurers, and shipping companies.

The oil trade perhaps offers the clearest example of how bargaining power determines Incoterms. Historically, major oil exporters such as Saudi Aramco and other Gulf national oil companies have preferred to sell crude oil on a free on board (FOB) basis at the loading terminal. Under this arrangement, the buyer  -often a large international oil company or refinery-  owns or charters the tanker, arranges insurance, and controls the maritime logistics chain. This suited both parties: exporters could focus on production, while buyers such as ExxonMobil, Shell and BP had enormous shipping expertise and controlled large tanker fleets or had long-term time charters with oil producers. Conversely, during periods of weak tanker markets, oil exporters preferred CIF sales because freight rates were low, allowing them to bundle transport competitively into the sales price. This was the case in the 1970s, when the cunning offer of a deluge of time charter contracts to shipping companies led to excessive newbuilding orders and an oversupply of tanker tonnage, resulting in low freight rates that suited oil producers well. It took 20 years for that oversupply to be absorbed.

Thus, INCOTERMS are not merely technical trade clauses. They often reveal the underlying balance of economic power between trading nations, multinational firms, and supply-chain actors.

The incidence of transport costs is a related concept. Here, the question is not who ‘pays the piper’ (i.e. the carrier), which is simply determined by the agreed INCOTERMS (FOB or CIF), but rather who ultimately bears the burden of transport costs. In the case of a CIF sale, for example, the exporter is responsible for arranging transportation of the goods to the buyer’s port or beyond. However, the CIF price that the buyer pays includes transport costs. Thus, although the exporter pays the carrier, they are compensated by the foreign importer, who therefore bears the actual cost of transport. As we will see in a future post, the burden of transport costs is shared between the two parties according to their respective price elasticity of demand and supply. The party bearing the brunt of transport costs is the one with the lowest elasticity: the exporter of fruit and the importer of oil, for example.

HH, June 2026, Dalian

 

Transition to alternative fuels

 

The transition of the shipping industry towards alternative fuels is a strategic decision, largely necessitated by international environmental regulations. However, the factors influencing a shipowner’s choice of fuel at the newbuilding stage are not fully understood. 

To this end, we introduce explainable artificial intelligence (XAI), which transcends traditional approaches, in an effort to reveal and explain the multitude of parameters that influence fuel decisions. Using a Light Gradient Boosting Machine (LightGBM) to analyze an extensive newbuilding dataset from Clarksons, we have identified four predictors of fuel choice: vessel size, vessel type, shipowner nationality and market cycle. 

The fourth predictor, market cycle, addresses unexpected counter-cyclical investment opportunities in next-generation fuels, such as ammonia. 

Our findings reconceptualize the fuel-choice dilemma as a multidimensional strategic decision framework rather than a mere technical issue. We provide shipowners with a data-driven perspective to inform their investment decisions, while offering policymakers empirical evidence with which to design more targeted regulations that account for the diverse realities of the global shipping industry.

23 Years of Maritime Logistics Research

Twenty-three years ago, in the March 2003 Editorial of MEL, I introduced the term maritime logistics, now household name in more than 100 universities around the world. Who could have imagined back then the impact that a simple term like this would have had today? An impact now ranging from professorial chairs to the canvas of trucks crisscrossing our motorways?

These were the years when, both in business and university, we were departing from a ‘modal’ perception of the ‘maritime domain’, and from such things as port management, shipping finance, or naval architecture, looking instead towards the ‘big picture’ of door-to-door transport and global logistics. The carriers themselves were beginning to realize that, due to cut-throat competition, there was little money to be made from port-to-port transport, and that survival meant designing their offering around the door-to-door concept. Carriers were thus transforming themselves into integrated logistics providers, in an effort to capture value from aviation, overland transport, warehousing, distribution and the door-to-door supply chain. Their affiliates, such as Maersk Logistics, Cosco Logistics, APL Logistics, CMA CGM Logistics and NYK Logistics could be seen everywhere.  During my NOL/APL years in Singapore, I remember advising on everything from the production of a silk shirt in Hanoi, Vietnam to its placement on the right shelve of an exclusive boutique on Fifth Avenue, New York. Maritime Logistics was emerging (photo).

(photo source: Haralambides 2026, forthcoming)

With my good colleagues @Dragan Čišić and @Saša Drezgić of the University of Rijeka, in ‘Dreamland Croatia’, we wondered what had actually happened since then on the research front, what has been the impact of those works on business and society, and where we are heading next (our next work on the impact of artificial intelligence on maritime logistics is to appear soon).

The results were truly astounding. A total of ten thousand papers were retrieved from the Scopus, Web of Science, IEEE, and OpenAlex databases and encoded using Large Language Model (LLM) embeddings.

Among many others, impactful areas of prolific output were ship-routing and arrival prediction; terminal efficiency benchmarking; short-sea-shipping and intermodal networks; ESG and environmental performance; network connectivity; maritime chokepoints, cushioning external shocks, and dual-purpose ships and port infrastructures.

And what about the future? New research avenues are opening up, most of which based on artificial intelligence applications in shipping and ports. They include digital integration; green and smart shipping and ports; autonomous shipping; dealing with the effects of climate change, blue corridors, nuclear propulsion; zero-carbon fuels, cyber-risk, blockchain applications, big data and predictive analytics, robotic engineering, and transition management and governance.

Nowaday’s, doing things better is everyone’s struggle; but doing a lot of things ‘together’ better is what we have called maritime logistics.   HH

(link: https://authors.elsevier.com/sd/article/S2092-5212(26)00023-4)

Tinbergen, Koopmans, Rotterdam, and Erasmus University

 

Jan Tinbergen, our illustrious colleague at Erasmus University, was the first economist to use Isaac Newton’s gravitational formula to explain trade between two nations. Simply, the gravitational force between two planets, in other words the force that keeps the earth rotating around the sun (or the Andromeda Galaxy approaching our Milky Way at a speed of 100 km/s), depends directly on the mass of the two planets (translated into the size of the two economies in trade models), and is inversely related to the distance between them.  Thirty years later, I showed that, in trade models, and due to competition and economies of scale in shipping, the ‘physical distance’ in Tinbergen’s model is not appropriate anymore and needs to be replaced with ‘economic distance’ as this is proxied by ocean freight rates.

 Most people know that Jan Tinbergen shared the first Nobel Prize in Economics (1969) with the Norwegian Ragnar Frisch. Not many maritime economists, however, know that Tinbergen’s favorite student, Tjalling Koopmans, also shared the 1975 Nobel Prize in Economics with Leonid Kantorovich, for their work on activity analysis; the precursor of operations research.

Before moving to the United States, at the beginning of WW2, to eventually take over the Cowles Commission, Koopmans was also teaching at Erasmus, filling in for the classes in Mathematical Economics of Jan Tinbergen who had (temporarily) moved to Geneva. Koopmans’ book «Tanker freight rates and tankship building» is standard reading in every advanced class in Maritime Economics.

But what I have always considered much more important is Koopmans’ 1947 paper « Measurement without Theory», sent to me by a very smart student of mine, Armando Veras Sepúlveda, who reminded me of the things I was teaching them back in 2006: «Data ought not create theory; data should only validate theory». I have since lovingly dedicated this to all my econometrician friends and colleagues (particularly time-series econometrics).

It was therefore the obvious thing to do to name our landmark campus building (photo) the ‘Tinbergen Building’.

When I moved to Rotterdam in 1992, the 17-storey Tinbergen Building was being renovated. Our offices were temporarily housed across the street, in Brainpark (something like the Silicon Valley of Rotterdam) but the classrooms could not of course move too. Thus, my first lectures, in the harsh winter of 1992-3, were given in a container! Probably, my future love for the ‘box’ since, was not totally unrelated to that winter… A lot of prominent ‘Rotterdammers’ came out of that box, however; and of course, a lot of colleagues too.

Eventually, the renovation finished and we moved back in. Rotterdam was very different then. From my room on the 12^th floor, I could muse over cows on the open fields of Capelle aan den Ijssel. On campus, whenever we heard a language other than Dutch we would turn our heads in surprise. In downtown Rotterdam, there was only one tourist information office in Coolsingel, and you would be lucky if you could find it manned. But look at Rotterdam today; look at the ‘Manhattan of Europe’! 

Rotterdam was granted its City Rights on 7 June 1340; almost seven  centuries ago. At that time, the city was a modest settlement of some 2,000 souls. How this little, muddy outpost of the River Rotte evolved into the “Manhattan” of Europe, and Europe’s largest port, is a compelling story. It is a story of relentless hard work, respect for one’s fellow citizen, adherence to the rule of law, and a deep sense of shared heritage and shared values.

HH

Digital competitiveness and logistics performance

 

Logistics and supply chain management have become a way of life in modern society. From my morning coffee which is brought to my doorstep in five minutes, to the reconfiguration of global transportation and trading networks, logistics has transformed the world we are living in. 

But to what extent does logistics performance depend on our digital prowess and our adoption of modern technological advances? And is digital competitiveness the only prerequisite for logistics and trade performance? One would tend to think that the answer is obvious; but it is not. 

We have met technologically advanced countries lagging in logistics performance, but also logistics champions falling short in digital applications. To further explore this, we use comparable data from 50 countries, from the World Digital Competitiveness Rankings (WDCR) and the Logistics Performance Index (LPI). By integrating objective weighting (CRITIC), efficiency measurement (DEA) and categorical pattern analysis (MCA), we show that stronger logistics performance reduces uncertainty and information asymmetry costs. 

Digital prowess, however, is a necessary but not a sufficient condition for logistical performance and trade efficiency. For digitalization to be effective, other things need to be present too. These include land infrastructure, city-port relations, customs facilitation, last-mile investments, data-governance frameworks, well trained human capital, cybersecurity infrastructure and knowhow, and more (see HE Haralambides (forthcoming), “Ports, shipping and trade: the 40 years odyssey of a story-teller”. Amazon publishing, 2026). 

Many thanks to my coauthors Emrah Akdamar and Ersin Firat Akgul for an excellent research cooperation.

(published Open Access)

THE DEMAND FOR SHIPPING

Unless properly explained, I have often observed, in undergrad classes, a certain difficulty in comprehending why we measure the demand for shipping services in ‘ton-miles’; in other words, what distance has to do with a million tons of iron ore that we want to import from Brazil. The question was raised again this morning by a smart young lady, when I was showing them this picture:

«prof, I am importing a million tons of coal; what difference does it make if I bring it from the US or Australia?»

At first sight, and for someone introduced for the first time to shipping economics, the question appears plausible and legitimate. But the question only arises if we do not explain, right at the outset of the class, that, opposite to the supply of tonnage which is a ‘stock’ variable, as we say in economics, i.e., so many ships in the world as of January 1st, demand for shipping is a ‘flow’ variable; i.e., I am importing so many tons per year.

Still, the concept wasn’t clear to all. But there comes a young chap from the end of the room, saying:

«hey prof; can I try to explain this with a very simplistic example?»

I nodded him to the blackboard. And here he goes: (the text below is mine; Michael just did the calculations).

Assume the annual demand for shipping capacity is 1.2 million deadweight tons for the transportation of iron ore from Australia to China: distance (approx.) 4,000 nm.  The voyage takes 15 days and the job could be done by a single bulk carrier of 100,000 dwt in twelve trips (15x2x12=1 year). Now assume China decides to stop buying from Australia and switches to Brazil which, however, is three times the distance to Australia; i.e., 12,000 nm. The voyage of our bulk carrier would now take 45 days and thus the ship could make only 4 trips in a year (45x2x4=1year) and transport just 400,000 tons of iron ore. To bring 1.2 million tons to China in a year (our annual imports), we need either a bulk carrier of 300,000 dwt, i.e., three times bigger, or three bulk carriers of 100,000 dwt, like ours. The demand for shipping capacity has tripled.

P.S.1: Needless to say Michael is exempted from next week’s exam and he proudly knows it. 😊

P.S.2: Brokers: please don’t shoot the pianist: as Michael said, the example is simplistic and for illustrative purposes only. As such, the example has done its job (or so I hope).

HH