Port and Maritime Industry Finance

Port and Maritime Industry Finance

Source: Adapted from Stopford, M. (1997 & 2009) Maritime Economics, 2nd & 3rd edition, London: Routledge.

The financing of the port and shipping industries comes from several sources, but it is commonly the responsibility of specialized brokers with close relationships with the industry. The income is used to directly finance the operational and capital requirements of shipping companies and terminal operators as well as payback dividends to the institutions providing capital. In such a context, the maritime industry most shapes the allocation of investment capital, and the financial sector provides this capital based upon merit and expected levels of return. Those are strongly derived from existing trade volume and its growth potential. In recent decades globalization has expanded maritime trade substantially, which has attracted large capital sums. Containerization in particular increased the capital intensiveness of the industry, which again incited additional investments. Another important trend has also been the more direct involvement of investors, such as insurance companies and pension funds (sovereign wealth funds). The conventional link between brokers and the maritime industry is becoming more tenuous.