Jumping ship: Oversupply conditions have caused profit to decline, resulting in industry exits

The Water Freight Transport industry represents a key link between Australian companies and the global economy. Despite the industry's vital importance to international trade, water freight transport companies have faced severe challenges stemming from a global oversupply of shipping capacity. Ships commissioned to be built prior to the global financial crisis have recently reached completion, joining existing fleets around the world. The industry has endured overcapacity conditions as demand for shipping has declined, driving freight rates to record lows. Consequently, industry revenue is expected to fall at an annualised 3.1% over the five years through 2018-19, to $2.5 billion. This includes a forecast increase of 1.8% in the current year, reflecting improving demand conditions...read more.

Industry Statistics & Market Size
Annual Growth 14-19
Forecast Growth 19-24

Industry Threats & Opportunities

  • An oversupply of capacity has reduced freight rates over the past five years
  • Falling shipping rates have reduced profit margins over the past five years
  • The increasing popularity of online shopping will boost the value of merchandise trade imports
  • Industry Report - Starting a New Business Chapter

    The Water Freight Transport industry exhibits high barriers to entry, a trend which has increased over the past five years. The significant financial costs associated with acquiring vessels is the industry's primary barrier for new entrants. Equipment leasing can be a viable short-term solution, although this is more common for smaller vessels. The scale of existing industry operators also limits the ability of new operators to enter the industry. Many existing operators have significant economies of scale, especially when larger ships are used. Typically, smaller operators can find it harder to fill the capacity of the ship. As filling a ship to capacity minimises costs, industry operators seek to transport full loads to maximise profitability. Con...purchase to read more.

    Additional Insights for the Water Freight Transport Industry

    IBISWorld has determined the most important Key Success Factors for the Water Freight Transport are:

  • Market research and understanding
  • Output is sold under contract - incorporate long-term sales contracts
  • Effective cost controls
  • IBISWorld analysts also discuss how external factors such as Total mass of exports by sea and Value of merchandise trade imports in the Water Freight Transport industry impact industry performance..

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    What's in this report

    What is the Water Freight Transport Industry?

    Industry players operate vessels that transport freight by water. Primary activities include international sea freight transport services between domestic and international ports, coastal sea freight transport services between domestic ports, freight ferry services and harbour freight transport services. Other activities include river freight transport services, ship freight management services (operating ships on behalf of owners) and inland water freight transport services.

    Industry Products
  • Bulk carrier services
  • Container ship services
  • General cargo services
  • Industry Activities
  • Bulk cargo transport
  • Containerised freight transport
  • General cargo transport
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Total mass of exports by sea
  • Value of merchandise trade imports
  • Total value of world trade
  • World price of crude oil

  • Current Performance
  • Oversupply and participation
  • Freight demand
  • Profitability and competition
  • Coastal trade
  • Chart: Revenue Growth

  • Industry Outlook
  • Profit and employment
  • Growing vessel size
  • Freight demand
  • Table: Water Freight Transport Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Water Freight Transport Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Grain Growing
  • Black Coal Mining
  • Iron Ore Mining
  • Rail, Air and Sea Freight Forwarding

  • Key Selling Industries
  • Navigation, Towage and Services to Water Transport
  • Port and Water Transport Terminal Operations
  • Shipbuilding and Repair Services
  • Stevedoring Services
  • Transport Equipment and Large Vehicle Rental

  • Products & Services
  • Bulk carrier services
  • Container ship services
  • General cargo services
  • Chart: Water Freight Transport Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Mining sector
  • Manufacturing sector
  • Freight forwarders
  • Agriculture sector
  • Chart: Major Market Segmentation for the Water Freight Transport Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Chart: Cost Structure Benchmarking – Sector vs Water Freight Transport

  • Basis of Competition
  • Internal competition
  • External competition

  • Barriers to Entry
  • Table: Barrier to Entry Checklist for the Water Freight Transport Industry

  • Industry Globalization
    ANL Container Line Pty Ltd, ASP Pacific Holdings Pty Ltd,
  • Table: ANL Container Line Pty Ltd - financial performance
  • Table: ASP Pacific Holdings Pty Ltd - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Water Freight Transport Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Water Freight Transport Industry
  • Industry Revenue (2010-2024)
  • Industry Gross Product (2010-2024)
  • Establishments (2010-2024)
  • Businesses (2010-2024)
  • Employment (2010-2024)
  • Wages (2010-2024)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Break Bulk
  • Cargo that must be loaded and unloaded individually because it is not easy to containerise. Break bulk cargo includes motor vehicles, structural steel and agricultural equipment.
  • Conference
  • An unincorporated association of two or more ocean carriers carrying on two or more businesses, each of which includes, or is proposed to include, the provision of liner cargo shipping services.
  • Freeboard
  • The distance from the waterline to the upper deck level measured where water can enter the boat or ship.
  • Triangular Trade
  • Triangular trade occurs when a ship moves between multiple Australian ports as part of an international route, transporting cargo between them.
  • Wharfage
  • A fee charged for the use of a wharf.
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    Why buy this report?

    IBISWorld’s Water Freight Transport market research report provides the latest industry statistics and industry trends, allowing you to identify the products and customers driving revenue growth and profitability. The industry report identifies the leading companies and offers strategic industry analysis of the key factors influencing the market.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Water Freight Transport:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Water Freight Transport market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Water Freight Transport, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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