Shipnet: The Challenges of Surviving as a Small Shipping Business in a Big Industry

In today’s shipping industry, we’re seeing multiple factors which are impacting smaller shipping companies making it challenging to remain independent, however smaller operators bring unique values to the industry and we must encourage their success.

Changes to environmental regulations such as sulphur cap, EEXI/CII, 2030/50 GHG targets and the ETS being introduced by the International Maritime Organization are all direct threats to the independence of smaller ship owners. These businesses simply do not have the capacity, including resources, finances and time, to seek out the advantages and typically only feel the costs of regulations. The need for data and analytics is crucial yet often outside the immediate capability of smaller operators but beyond compliance costs, the costs of improving performance against environmental regulations such as better hull coating, retrofit of energy saving devices for example, is capital-intensive and potentially challenging. This, of course, then may result in deferring other growth-encouraging investments so improving environmental performance, ultimately has a very sizable opportunity cost.

We can’t ignore there are many exciting, forward-thinking shipowners within all sizes of companies but high capital costs, rising operating costs teamed with cash flow contrast all present challenges for companies in their infancy. But for more established