In a business scene that has witnessed the explosion of e-commerce startups, have you considered getting involved in the underlying structure? The shipping industry is the backbone of global e-commerce, providing the bulk of transportation necessary to bring low cost manufactured goods to their intended markets.
It’s not easy to get into the shipping business, though – if it were, more people would be doing it. For every Onassis or Niarchos, there are countless young Greeks who have dreamt of making their fortune at sea only to see it wash away. Times have changed since the days of the Greek magnates; here are some significant challenges to be aware of as you test the waters.
The airline billionaire Richard Branson once said, “If you want to be a millionaire, start with a billion dollars and launch a new airline.” It’s a statement that can be applied to starting in the shipping business as well; there’s an excellent opportunity, but the barrier to entry can be prohibitive.
Starting a shipping enterprise is going to require the ability to raise significant capital. Few banks are also willing to lend money for the construction of new ships. You’ll need the personality and connections necessary to meet up with and convince, several backers, with the required funds. These could be venture capitalists or angel investors, for example.
To convince your financial backers of the viability of your shipping enterprise, you need a solid business plan. The best place to start is with insider knowledge of the industry. The majority of shipping business today is done by established companies drawing on a wealth of experience; tapping into that sort of expertise – in the form of retired employees and professional industry consultants – can help you narrow the gap.
The global shipping industry transports about 90% of cargo across the world, so there will be opportunities to succeed. You’ll probably want to narrow down the scope of your business, at least in the beginning. This will allow you to focus on something specific and become an industry leader in that area, opening the door for future expansion. For instance, you can specialise in containers and focus on quality, packaging, and security. You could also build up a presence in port areas with new developments, counting on future opportunities.
You’re also going to need a certain level of tolerance for risk to succeed in the shipping industry. This is especially true in today’s continually changing environment. As recent political events show – and continue to unfold – relations can quickly switch between countries, even world powers. The US-China trade war and Brexit are just two examples of how political situations can affect your shipping business.
Managing risks means being scrupulous and taking care of potential threats to your cargo. Trade disruption insurance for hull and machinery damage, or other events that result in loss of cargo, will protect you from severe losses. Beyond that, you can also take calculated risks with fuel efficiency, for example, and expand profit margins depending on fluctuations in oil prices.
Without a doubt, getting started in the shipping industry will be difficult, but a great entrepreneur is always up for navigating challenges. If you can find a foothold and work your way up from there, you’ll be able to operate in an industry of constant international demand and opportunity.