MC Shipping Competition
Now Viewing MC Shipping's competition in: Deep Sea Shipping (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's main customers? - Deep sea shipping customers include energy, chemical, industrial, automobile, retail, and consumer products companies. Some carriers work directly with the US government to transport military goods and international mail.
Does the company work with intermediaries to build sales? -
Does the company have key port or shipper partnerships? - Carriers often partner with container companies and develop relationships with US and foreign ports, particularly efficiently run ports with limited congestion.
Are carrier rates publicly posted? - Carriers aren't obligated to post rates. By law, ocean transportation intermediaries (OTI) must publish price quotes.
What is the company's average charter rate? - A six-month charter rate for a 4,000, 20-foot equivalent unit (TEU) container ship is around $20,000 a day.
Does the company charge different liner service rates depending on the direction of the ship? - An average liner service rate for a Trans-Pacific voyage is around $2,000 per TEU (westbound) and $1,000 per TEU (eastbound).
How does the company determine additional rate charges? - Rates can increase if bunker fuel costs rise or if the company transports hazardous cargo, less than full containers, or unusual sizes.
Competitive Landscape
Demand is driven by macroeconomic trends in global imports and exports. The profitability of individual companies depends on efficient operations and a good safety record. Large companies have advantages in fleet size and port access. Small companies can compete effectively by chartering services out of smaller ports and transporting unusual cargo. Average annual revenue per worker for a typical company is nearly $500,000.
Business Challenges
CRITICAL ISSUES
Dependence on International Trade Policies - Cabotage laws, disputes over American protectionist policies, and trade boycotts significantly shape the health and outlook of the US deep sea shipping industry. Major modifications or a repeal of international trade polices could have major impact on a carrier's profitability. Changes to international flags of convenience standards could increase labor costs. A repeal of the Jones Act would allow foreign-flag vessel operators to transport goods between US ports and compete directly against US ships. The shipping industry actively promotes the retention of current trade policies through coalitions like the Marine Cabotage Task Force; INTERTANKO (a tanker trade association); and INTERCARGO (a cargo shipowner association).
Vulnerability to Fuel Costs - Bunker fuel represents up to 60 percent of total vessel operating expenses, or about 15 percent of revenues. A dollar increase in the price of bunker fuel can add several million in additional operating expenses for a large shipping company. Carriers can offset fuel price increases through a Bunker Adjustment Factor (BAF), a surcharge passed to shippers that covers price fluctuations in bunker fuel. However, BAF hikes may not coincide with fuel price increases or may be difficult to collect, increasing the risk of cash flow shortages.
Industries Where MC Shipping Competes
- Transportation Services
- Marine Shipping
- Deep Sea Shipping(primary)
- Marine Shipping
