Navigating Uncertainty: Exploring Risk Management Strategies in the Maritime Sector

Abstract

This thesis entails a modern perspective on risk management and seeks to unravel the relationship between risk management strategies and financial performance. The thesis consists of mixed-methods, and the methods of this project are correlation matrices, regressions, and interviews. The correlation matrices were conducted to help with the pre- processing of the regressions, and they were conducted individually for three industries: Land transportation, air freight, and maritime transportation. The scope of the project is to analyze the various risk management strategies in the maritime transportation industry, however, as there is a strong interplay with the other two industries, the analysis was extended to them as well – To familiarize the tendencies and make qualified assumptions of what possible vertical integration strategies into these industries imply. The mixed-methods approach is supported by the project’s choice of philosophy of science, pragmatism. The quantitative analysis highlighted three statistically significant variables, in predicting financial performance, namely the Altman Z score, Liabilities/Assets, and Debt/Equity. Of the three variables, Liabilities/Assets had the biggest impact in predicting positive financial performance. From the interviews, three different stakeholder perspectives are brought to the project, and the points they agree on, as well as the ones they disagree on, are analyzed and discussed throughout the paper. Lastly, the project culminates in a scenario analysis, which presents recommended risk management strategies in an industry-wide sense.