Maritime financial instability and supply chain management effects

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The paper investigates the offshore crisis 2015–2017 and its impact on central international offshore oil and gas related maritime cluster, the Blue Maritime Cluster, located at the North-Western coast of Norway.
This complete maritime cluster, heavily involved in offshore petroleum operations, it experienced an almost devastating blow, as it lost almost one-third of its employees as its value added contracted by 39 percent.
When the crises is basically seen as a result of falling of oil prices and lower activity and squeezed profit margins, this paper investigates the crisis in the light of financial instability and reactions down the maritime supply chain.
By collecting data from the Blue Maritime Cluster and the Norwegian central company register one is able both to trace the fall in the activity due to the crisis and measures of financial strength. The study approaches the data by using a structural time series analysis in order to map cycles as deviations from polynomial trends.
The findings ascertain that financial instability was dominant within the Blue Maritime Cluster during its boom before the crisis. Debt ratios and thereby gearing (leverage) were high. Thus, the companies could not meet their obligations when the crisis hit.
The paper also finds that narrow focused supply chain management made the cluster fall deep into the abyss. Companies with a more diversified portfolio were able to meet the hard years better than others.

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    • Figure 1. Development of assets linked to the financial instability hypothesis
    • Figure 2. Supply chains related to offshore maritime operations
    • Figure 3. Supply chain related to BMC
    • Figure 4. BMC and its framework
    • Figure 5. Brent crude oil prices in US dollars per barrel (August 2009–August 2019)
    • Figure 6. Turnover (left) and value added (right) in the BMC 2004–2017 in billion NOK
    • Figure 7. Key financial accounts figures for ship owning companies (left) and shipyards (right) in the BMC (2001–2018)
    • Figure 8. Employment (left) and net operating margins in percent of turnover (right) in the BMC (2004–2017)
    • Figure 9. Turnover by markets 2017 as percentages for BMC
    • Table 1. Descriptive statistics BMC as of 2014
    • Table 2. Cycle components by industry for the BMC (1999–2018)