Initial Strategic and Financial Advisory Insights to the Executive Team of Carnival Corporation
Question
You have just been asked to consult with the executive team of Carnival Corporation on trends for the national industry-specific occupational employment and wage estimates for ocean and coastal transportation in the United States regarding the implications of industry trends. Based on the Deloitte report Global Port Trends 2030 [PDF] and the report Ocean & Coastal Transportation in the US (NAICS 483110), what initial strategic and financial advisory insights can you provide? Limit your post to no more than 600 words.


Solution
Global Port Trends 2030
Initial Strategic and Financial Advisory Insights to the
Executive Team of Carnival Corporation
As port operations become more
complicated, land-use changes, necessitating new collaborations between the
port and the city. Due to the limited available space at urban ports, it is
necessary to boost a port's space productivity (Deloitte Global Port Advisory,
2020). By boosting berth and terminal occupancy, innovation and automation may
help improve efficiency. As a result, Delloite Global Port Advisory (2020)
projects that companies and ports will increasingly leverage technological
advancements to address limited space constraints.
Ports are sometimes forced to
relocate their operations away from the city's historic core because they lack
available space. Additionally, several old, smaller ports, frequently situated
close to or even in the city center, have lost their usefulness as conventional
port terminals due to technical improvements (containerization). Due to these
two changes, properties that had previously been used primarily for navigational
purposes may now be used for various purposes (Deloitte Global Port Advisory,
2020). Redevelopment of waterfronts will increasingly be utilized to construct
ecosystems that mix social and economic features, creating regional added value
and employment, benefiting both the city and port.
According to Brocker (2021),
port operators' labor expenditures accounted for 14.3 percent of overall
revenue in 2021, making them the second-largest expense. Most deep-sea commerce
ships include six or more crew members who are not licensed, such as the
captain, three deck officers or mates, a chief engineer, three deputy engineers,
a radio operator, and other skilled mariners. For bigger organizations, good
route management may considerably reduce labor costs (Brocker, 2021). However,
labor expenses provide a more significant challenge to ship owner-operators.
Owners can only raise revenue (and lower labor costs as a percentage of income)
by working overtime and charging more for their services. The wage share of
income has grown during the five years to 2021, particularly in the past two
years, as increasing demand for cargo ships amidst coronavirus-related supply
chains has put pressure on businesses to raise salaries.
References
Brocker, M. (2021).
Ocean & Coastal Transportation in the US. IBISWorld, US.
Deloitte Global Port Advisory. (2020). Global
Port Trends. Deloitte | The Netherlands. https://www2.deloitte.com/content/dam/Deloitte/nl/Documents/consumer-business/deloitte-nl-cb-global-port-trends-2030.pdf



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