Open hatch bulk shipping joint ventures: Motives, opportunities and challenges
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This study presents the results of a single-case study on the possible motives, opportunities, and impediments for establishing joint ventures in bulk and open hatch bulk carriers shipping sector. The findings derive from the semi-structured interviews with executives from an established joint venture. The findings indicate that weak market conditions and bad financial results were factors that led the owners to discuss forming a strategic alliance. The primary driver, however, was the increased bargaining power of buyers, due to consolidation in the customer base. The main findings also show that in general, there are substantial benefits in terms of costs synergies when forming joint ventures, especially within the open-hatch bulk carriers’ segment. In addition to it, when there is complementarity between the businesses involved, their opportunities could be even more significant, such as the possibility of expanding to new markets without the need for investments in new ships. It was found that the process of establishing a joint venture between two private Norwegian shipowners can be challenging given the owners personalities and contrasting organizational cultures. Moreover, the study identifies the decision-making process around vessel keys as a factor impeding negotiations between shipowners.