Geopolitical tensions and new tariffs shake the shipping industry

The shipping industry is currently facing significant volatility due to rising geopolitical tensions and disruptions from a wave of new tariffs, as highlighted in a recently published report by the UN Conference on Trade and Development. These challenges are leading to a more complex and uncertain global trade environment, where subdued industrial activities in major economies and weak Chinese demand for bulk goods have led to a downward revision of the maritime trade forecast for 2025. The report now forecasts an annual growth in total maritime trade volume of 0.5%, with containerized trade growing somewhat faster at 1.4%. In particular, changes in trade policy and new tariffs are significantly disrupting global supply chains. Navigation in the Black Sea has been complicated by the war in Ukraine, while conflicts in the Middle East have led to increased shipping costs as vessels have had to bypass disruptions in the Red Sea by taking the route around the Cape of Good Hope. The Strait of Hormuz, through which 34% of the world's seaborne oil shipments pass, has also faced disruption risks in recent months as tensions between Iran and Israel have escalated. Since the closure of the Suez Canal in 1967, the trade routes of the global economy have not been so sustainably disrupted, as Rebeca Grynspan, Secretary-General of UNCTAD, explained in her opening remarks to the report. She pointed out that maritime transport needs to fundamentally rethink its operations to manage fragile supply chains and increasing geopolitical uncertainties. Additionally, sea voyages have become increasingly longer—from an average length of 4,831 miles in 2018 to 5,245 miles in 2024—reflecting changes in trade routes and geopolitics. "Distance is no longer geography; it is geoeconomics," Grynspan said. For the period from 2026 to 2030, UNCTAD expects total seaborne traffic to increase at an average annual rate of 2%, with containerized trade growing by 2.3%.