The Influence of Geo-Political Changes on Tanker Shipping Companies´ Competitiveness: The role of strategic commitment towards physical, capital resources

Louise Desirée Handberg

Student thesis: Master thesis

Abstract

External factors in terms of market demand and supply pose, from a shipping company’s perspective, a certain risk and result in a high volatility, as the value of internal investments in physical capital resources are influenced heavily by the cyclical trends of the world economy. In order to clarify the market trends before investing in new assets, it is recognized to be of great value to be able to forecast economic cycles of supply and demand. The uncertainty from geopolitical changes such as the U.S. shale oil boom and the repeal of the U.S crude oil export ban, which would affect the regional oil trade and thereby global economy, can cause disadvantages for tanker shipping companies, if committing strategically to a pool of resources, which is challenged negatively by the geopolitical changes. Therefore, analytical forecasting of geopolitical scenarios and their consequences on strategic resource investment is useful for shipping companies that aim to stay competitive. How geopolitical changes affect the shipping cycles and tanker shipping market, as well as the competitiveness of tanker companies’ strategic resource commitment, is what this thesis aims to uncover. Methodology: Data collected from Clarksons Research Limited and Danish listed, tanker shipping case companies, generate a broader understanding and explain geopolitical influence on tanker shipping companies’ strategy and resource commitment in terms competitiveness. The purpose: This research aims to explore and explain how geopolitical changes influence tanker shipping companies’ competitiveness of resources in order to provide an academic approach to the field. Empirical finding: Findings led to the clarification of the geopolitical dimensions of the U.S. shale oil boom and its impact on shipping cycles and shipping markets. Moreover, findings on strategic commitment of tanker companies showed that geopolitical changes can affect the companies’ competitiveness negatively if the following criteria are not met in terms of the companies’ resources: Strategic efficiency, scarcity and flexibility of resources. Furthermore, the findings show that the following criterion benefits tanker companies by increasing competitiveness: Scenario planning and cyclical forecasting. Practical implications: Management in Danish listed tanker shipping companies can consider applying the results provided in this thesis when planning the future commitment of resources, in order to create competitive advantages. An understanding of the cyclical trends and shipping markets together with the theoretical argument of strategic flexibility, scarcity and effectiveness of resources can further help the management of strategic commitment when seeking to invest in the most competitive resources. Keywords: Geopolitical change, maritime transportation, shipping cycles, trade pattern, world economy, evolution, resources, strategy, commitment, resource-based theory, competitiveness.

EducationsMSocSc in Service Management, (Graduate Programme) Final Thesis
LanguageEnglish
Publication date2016
Number of pages143