Despite the drastic difference in equipment, the maritime shipping industry is plagued by the same challenges as plenty of conventional small businesses. It is known as a “risky” industry, thanks to the increasing volatility of ocean freight rates. Changes in the global economy as well as the amount of ships being built can have a major effect on demand and earnings.
But despite the decrease in rates, orders have reportedly remained the same.
Having less cash makes it very difficult to repair equipment, which is very common in any shipping-related industry. Rough seas, reduced visibility, and unfamiliar ports can damage sea vessels and docks unexpectedly.
Maritime shipping businesses must be heavily capitalized all throughout the year in order to handle the large-scale cash flow that takes place on a constant basis. And since there’s already so much structural overcapacity, swift repairs are likely more beneficial to the industry than more equipment. This is just one of several elements that needs to become more efficient in order to reduce the impact of unstable rates and diminished returns.
For most businesses, increased efficiency means immediate access to working capital for maintaining operations and doing more business overall.
Fundture Capital has many years of experience providing Small Business Loans for Maritime Shipping Services. We can provide all types of business lending products. Contact us today for your FREE business funding consultation!
