Navigational aid in competition given to a ship (7)
I believe the answer is:
compass
'navigational aid' is the definition.
(I've seen this before)
'competition given to a ship' is the wordplay.
'competition' becomes 'comp' (I've seen this in other clues).
'given to' means one lot of letters go next to another.
'ship' becomes 'SS' (prefix in ship names eg SS Great Britain).
'comp'+'a'+'ss'='COMPASS'
'in' acts as a link.
(Other definitions for compass that I've seen before include "Direction finding instrument - range" , "Range - vessel's navigating instrument" , "may be boxed" , "where all points considered?" , "Direction finder; scope" .)