The shipping industry is one of the most competitive sectors of the global economy, where success depends on understanding market forces and the strategic adaptation to the constantly changing conditions of the external environment.
Of course, the critical factors that determine the performance of shipping companies differ significantly, depending on the type of market in which they operate. In this context, the distinction between the basic and the specialized markets is essential, as each requires a different operational approach and strategy.
Basic markets are those that cover a wide range of services and are characterized by intense competition and standardized services. In these markets, low cost is a critical factor, while the importance of financing (to have the lowest possible cost of capital) is constantly increasing. It is also important to understand the way basic markets function, in order to make the right decisions for “/exit” and for “/short-term” periods of operation in them.
In contrast, specialized markets focus on specific customer segments or unique services. Therefore, since these markets are structured around the customer, success depends on understanding their particular needs.
Overall, then, the success of a shipping company depends on the degree to which it can recognize the nature of the market in which it operates and align its strategy accordingly.
*The information for the above article was drawn from the book “Organization and Management of Shipping Companies”, by Prof. Ioannis Theotokas (Alexandria Publications, 3rd edition, September 2019), pp. 267.
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