Business Models in the Product Tanker Market: A Case Study of the Business Models of Dampsskibsselskabet Norden A/S and Torm

Lene Boge & Tonje Holan Marstein

Student thesis: Master thesis


This paper analyzes the business models of Norden and Torm, operating in the shipping market, in particular the product tanker segment. The purpose is to understand how the two business models differ, and how they have performed financially after the implementation of IMO 2020. In order to assess this problem statement, there has been conducted interviews with each of the case companies to collect relevant data. There has also been created frameworks to analyze the respective business models and financial metrics have been applied to measure performance. To gain an understanding of the context in which the business models operate, there has been performed an analysis of the product tanker market during the first quarter of 2020.
The main findings were that the two business models differ in chartering strategy. Torm focuses its operations on employing owned vessels in the spot market. Whereas Norden emphasis leasing of vessels on both short-term and long-term contracts, in addition to managing its tanker fleet through the Norient pool. Norden’s rationale for choosing a more asset light business model was to reduce its exposure to the volatile shipping market. In contrast, Torm’s decision to apply an asset heavy model was grounded in its perception that customers prefer the simplicity of using an integrated shipping company. Hence, the company believes its “one-stop shop” will contribute to capture higher earnings.
Regarding performance, there was found evidence that both companies had a strong start to 2020 with TCE earnings exceeding levels of Q1 in 2018 and 2019. In sum, Torm performed better than Norden during the first quarter of 2020 which can be attributed to Torm’s asset heavy business model. Based on this research’s findings, an asset heavy business model is likely to financially outperform that of an asset light model in a strong market.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2020
Number of pages116
SupervisorsMartin Jes Iversen