The frequency of extreme storms has increased, fueling demand for industry services
New York, NY (PRWEB) October 07, 2014
Performing an instrumental role within the overall water transportation sector, the Marine Salvage Services industry is involved in the salvaging, patching and the refloating of grounded vessels. In the past five years, the industry has been subject to a high degree of revenue volatility due to fluctuating demand conditions. Marine incidents may be the result of grounding, mechanical breakdown, fire and collision, as well as the weather. Weather across the United States, in particular, has been the main catalyst for growth and the elevated level of revenue volatility. In recent years, storms such as Hurricane Irene and Hurricane Sandy have resulted in a sharp spike in marine incidents. Consequently, federal and local governments dramatically increased spending during those storm-specific years. Unfortunately for the industry though, revenue contracts afterwards following extreme storms as illustrated by the expected decrease in 2014. Luckily for the industry, upwards movements in revenue have generously compensated for the downward contractions. In the five years to 2014, revenue is expected to increase at an annualized rate.
While they overall benefit from extreme storms, industry operators have been adversely affected in recent years by rising oil prices, which have kept industry profitability in check. According to IBISWorld Industry Analyst Omar Khedr, “Oil prices increased significantly in 2010 and 2011, and have remained relatively high, putting downward pressure on margins.” Increase in profitability has encouraged companies in the industry to expand their operations during the past five years. As a result, over the five years to 2014, the number of industry establishments is expected to increase at an annualized rate.
“While the industry will continue to be subjected to volatility, the industry is looking to enter calmer waters as total trade volumes continue to accelerate over the five years to 2019,” says Khedr. On the heels of this growth in trade activity, waterborne freight is expected to increase and the number of marine incidents is likewise expected to grow. As a result, industry revenue for salvage services is expected to widen, growing over the next five years. However, oil prices will remain a threat for the industry and is expected to profit growth in check.
For more information, visit IBISWorld’s Marine Salvage Services in the US industry report page.
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IBISWorld industry Report Key Topics
This industry provides retrieval and repair of vessels or cargo following a marine accident. Companies often work on a contract basis, whereby they are hired to conduct salvage operations on stricken 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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