Salvage industry struggles with shortage of income generating business
CONCERNS have been raised that the major corporates engaged in the salvage industry may exit the business amid an ongoing decline in revenue-generating activity, as shipping becomes progressively safer, with casualties tending to become more complex and more costly
08 December 2019 - 19:00
Speaking at KNect365's Salvage & Wreck Removal 2019 conference in London, senior lecturer in maritime business and law at Southampton Solent University Nicola Pryce-Roberts said standard academic models developed from observation of other industries suggest that salvage has entered a decline phase.
'On the basis of the research I have done, I can definitely say the salvage industry is definitely in the decline phase,' Ms Pryce-Roberts told attendees of the conference, reported London's Lloyd's List.
The salvage industry's decline phase is characterised by decreasing profits, lower outputs, inability to renew, competitive demise, lack of innovation, less efficiency, and a drop in the rate of employment growth.
The academic models would lead to predictions some companies will seek to exit salvage, while others look for defensive mergers and reduced investment through more leasing activity, and to diversify activities and income generation.
That doesn't mean all companies are simultaneously on a downwards trajectory, and even as some players head may quit the industry, others will most likely reinvent themselves, develop and grow, she said.
Bigger, more corporate companies often face parent company boards that tend to respond to shareholder pressure by cutting and running. In contrast, smaller family companies have the autonomy to choose to ride out the storm.
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