Strategic Resilience, Industry Regulations, and Performance of Shipping Companies in Kenya

Abstract

Kenyan-based shipping companies face mounting performance inefficiencies due to stringent regulations, even as 80% of global trade by volume and over 70% by value moved by sea in 2023, highlighting an urgent need for enhanced strategic resilience. These challenges contribute to higher operating expenses and delays in acquiring permits to comply with regulations. This study assessed the effect of strategic resilience on the performance of shipping companies in Kenya, which was moderated by shipping industry regulations. The objectives of the study were: to establish the influence of risk management, resource diversification, collaborative relationships, and supply chain agility on the performance of shipping companies in Kenya, and to determine the moderating effect of shipping industry regulations on the relationship between strategic resilience and performance. Their performance is assessed from the financial, customer, business process, and organizational learning perspectives. The industry regulations addressed include the safety regulations in the Merchant Shipping Act (2012), maritime security provisions detailed in the Maritime Transport Policy (2024), and the environmental protection standards established by the Kenya Maritime Authority (KMA). The study was grounded in the Organizational Resilience Theory (ORT), Institutional Theory, and Supply Chain Risk Management (SCRM) theory. The study used a mixed-methods research approach, and the research philosophy was from a pragmatist perspective. The research design was an explanatory sequential design. The study’s population was 9,961, with a sample size of 172 respondents from Kenya’s shipping industry. The researcher used a census approach due to the relatively small sample and collected data through semi-structured questionnaires and interview guides. The researcher assessed content, construct, and criterion validity. Construct validity was verified through confirmatory factor analysis (CFA), content validity was assessed using the content validity index (CVI), and criterion validity was established by comparing instrument outcomes with external performance data to evaluate predictive accuracy. Reliability was assessed through internal consistency reliability, measured using Cronbach's alpha. Pretesting of the research instrument was done using 17 respondents from shipping companies at Nairobi’s Inland Container Depot. Data analysis was conducted on quantitative data using descriptive and inferential analysis and presented in tables and charts. Moderated multiple regression analysis was done to analyze relationships among the study variables. The primary assumptions of regression analysis, like linearity tests, independence of errors, homoscedasticity, normality of residuals, and absence of multicollinearity, were tested. Thematic analysis was used for qualitative data to identify patterns and insights after meeting the data saturation threshold. Findings revealed that supply chain agility had the strongest positive and statistically significant influence on performance (R² = 0.524, p < 0.05), followed by collaborative relationships (R² = 0.275, p < 0.05), resource diversification (R² = 0.077, p < 0.05), and risk management (R² = 0.053, p < 0.05). Industry regulations were found to significantly moderate the relationship between strategic resilience and performance (R² = 0.154, p<0.05). The study concludes that supply chain agility is the most influential strategic resilience capability. It recommends that shipping companies institutionalize adaptive resilience frameworks and that policymakers recalibrate regulatory environments to foster industry collaborations to enhance performance.