A rebound in the global economy has led to an increase in demand for the industry
New York, NY (PRWEB) October 15, 2014
The Tugboat and Shipping Navigational Services industry has been subject to fluctuating conditions that affected many water-transportation industries in the past five years. The recession's effects trickled down to the industry, as decreased trade in 2009 led to fewer ships needing guidance in and out of ports. While the steep decline in waterborne freight that occurred in 2009 damaged demand for that year, the strong rebound in trade activity in 2010 allowed revenue to recover. In the five years to 2014, revenue is expected to increase at an annualized rate. In fact, after weathering the worst of the storm, trade value has accelerated consistently throughout the past four years, continuing to do so through 2014. As a result of this increase in demand, IBISWorld expects the industry to experience a increase in revenue over 2014.
While benefiting from rebounding trade, the industry's profitability has been adversely affected in recent years by rising oil prices. Oil prices increased significantly in 2010 and 2011, and have remained relatively high, forcing industry operators to use surcharges to pass additional fuel costs to customers. Additionally, these increases have proved detrimental to industry competitiveness because, compared with air and ground transportation, cost savings had traditionally drawn business to waterborne freight. According to IBISWorld Industry Analyst Omar Khedr, “To maintain competitiveness, operators were forced to absorb losses.” Since most operators are small operators, such a decrease in profit has hindered growth in the number of establishments operating in this industry. Over the five years to 2014, the number of establishments is expected to marginally increase at an average annual rate.
“After navigating this period of heightened volatility, the Tugboat and Shipping Navigational Services industry is looking to enter open water as the economy continues to accelerate over the five years to 2019,” says Khedr. On the heels of forecasted growth in economic activity, trade is expected to increase and waterborne freight is likewise expected to grow. As a result, industry revenue for tugboat services is expected to improve, growing over the next five years. However, oil prices will remain a threat for the industry, with this crucial input cost expected to keep profit growth in check.
For more information, visit IBISWorld’s Tugboat & Shipping Navigational Services in the US industry report page.
Follow IBISWorld on Twitter: https://twitter.com/#!/IBISWorld
Friend IBISWorld on Facebook: http://www.facebook.com/pages/IBISWorld/121347533189
IBISWorld industry Report Key Topics
Companies in this industry provide navigational services that ensure the safe passage of ships in and out of harbors. Such services mainly involve docking and piloting marine vessels. Marine salvage services, which involve the retrieval of cargo or vessels following marine accident, are also included in this industry.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.