ASSESSMENTS

Why Geopolitics Matters to the Global Shipping Industry

May 23, 2018 | 09:00 GMT

A picture shows a sprawling docklands stacked with shipping containers.

A decade after the global financial crash precipitated a crippling overcapacity crisis, the global shipping sector has been struggling to recover. 

(JOHANNES EISELE/AFP/Getty Images)

Highlights

  • The shipping sector is poised to make progress toward financial recovery in 2018, but uncertainty over trade and security relationships will be compounded by a variety of other constraints.
  • Rising fuel costs, the introduction of larger vessels and new environmental regulation standards could result in slower growth.
  • Even as Washington and Beijing reach a preliminary agreement on trade, the rest of the world's response to U.S. trade policy — amid continued uncertainty surrounding Iran — will serve as a downward force on shipping growth.

Global shipping is a behemoth of an industry. It has a direct and indirect economic impact of more than $400 billion annually, and more than $4 trillion worth of goods move by sea freight each year. But it's also a delicate sector, closely tied to the health of major economies, prone to cyclic swings and vulnerable to the world's reaction or overreaction to any number of political events....

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