All these services are specialised services and the industry will have to depend a lot on these suppliers. Therefore, the power of suppliers is quite substantial.
Threat of New Entrants: Container and shipping industry is capital intensive business and requires huge amount of investment to start the business. Safety and environmental concerns result in high levels of regulations for the industry. Therefore, it may be not as easy for any company to enter into this business, as in a retail business. The threat of new entrants is not substantial.
Bargaining Powers of Buyers/ customers: Customers of the services for the shipping and container industry include big corporate houses and manufacturers. In today's competitive environment what these companies require is timely delivery of goods. This would make these companies quite demanding at times, and the container industry would be on their toes to provide efficient services.
Threat of Substitutes: Substitutes for the container and shipping industry are mainly the road, rail and air routes. ...
ompetitive Rivalry: Though there are not many companies in the container and shipping industry, on account of the nature of the business, but there is intense competition amongst the established ones' like Braemar Shipping Services Plc from UK, Malaysia International Shipping Corporation Berhad, The Shipping Corporation of India Ltd., The National Shipping Company of Saudi Arabia etc. The factors like low level of product differentiation, high fixed costs and high exit barriers also give rise to good levels of competition.
SWOT Analysis of the Industry
i. Long term agreements with clients, resulting in a committed client base
ii. Specialised type of services, with an ability to carry huge quantities
iii. High entry barriers in the form of higher investments and skills
i. Huge capital investments coupled with high depreciation costs results in lesser profit levels for the companies, which in turn results in delayed breakeven point
ii. High exit barriers, imply that the company once in the business is compelled to remain in it for many more years irrespective of profit or loss being incurred
iii. More movement of goods and services due to the trend amongst the MNCs to manufacture products in countries like China and then transport it back to the western world or Europe
iv. Coordinated approach being adopted by leading players in the container and shipping industry
v. With technological advancements it has become easier for the companies to track the movement of their consignments with techniques like GPS, RFIDs etc, which promises to make the industry much more efficient in the coming years.
vi. Increasing threat of sea-pirates, particularly through the sea route via the Indian Ocean and Gulf of Aden, where Somali pirates