New York, NY (PRWEB) May 02, 2014
The Ocean and Coastal Transportation industry encountered turbulent waters over the past five years as demand for industry services declined. Industry operators transport freight, bulk cargo and passengers along international and coastal shipping routes. During the recession, slowing disposable income growth and increasing unemployment led to a drop in retail and manufacturing activity, reducing the need for the transportation of freight and commodities, such as consumer goods and raw material for factories. Moreover, the global nature of the recession caused demand for Canadian dry-bulk exports, which account for the largest portion of the industry's cargo shipping revenue and includes grain, coal and iron ore, to plunge. Consequently, demand for Ocean and Coastal Transportation industry services declined, with revenue sinking 12.9% in 2009.
According to IBISWorld Industry Analyst Maksim Soshkin, “While operators still continued to lose revenue, demand for industry services stabilized in the years following the recession.” Rapid economic growth in emerging markets and the growing need for natural resources allowed Canadian shipping companies to benefit from the country's dry and liquid-bulk exports. Moreover, as incomes gradually increased, demand for cruises began to climb, as price-conscious consumers found these trips to be a lower-priced alternative to other forms of vacations.
However, while such conditions did bolster industry revenue, which grew in 2010, demand was not strong enough to prevent revenue deficits following this upturn. Below par domestic economic conditions, overcapacity in global shipping, tempering economic growth in emerging markets and crop production and the Euro crisis all weakened demand for cargo shipping. As a result, in the five years to 2014, industry revenue is expected to decline at an annualized 0.2% to reach $3.7 billion, with a 0.6% drop in 2014 alone.
Nevertheless, strong, but moderated, economic growth in emerging markets, an abating Euro crisis and improving domestic economic conditions are all projected to drive demand for the industry's cargo services. Consequently, in the five years to 2019, industry revenue is forecasted to climb. Moreover, increasing incomes in Canada and abroad will lead to more passengers taking Canadian cruises.
For more information, visit IBISWorld’s Ocean and Coastal Transportation in Canada industry report page.
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IBISWorld industry Report Key Topics
Operators in the Ocean and Coastal Transportation industry primarily transport freight and passengers using deep sea, coastal and Great Lakes water transportation. This industry also includes ocean-going cruise ships.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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