The war in Ukraine, Israel’s military operations in the Gaza Strip and the Houthi threat in the Red Sea marked the security of navigation in 2024.
The impact of these developments was not limited to shipping, but spread rapidly throughout the global economy as supply chains and prices were negatively affected.
In addition, trade fragmentation and the expansion of trade protectionism practices created significant risks to the demand for maritime transport services.
Rising geopolitical tensions caused turmoil in the sector and – according to analysts – the situation is not expected to change by the end of the year.
The Houthis and the Need for Contingency Plans
At the same time, the ongoing Houthi attacks and the war between Russia and Ukraine have disrupted traditional shipping routes and forced some carriers to change their operating methods, while incidents with tragic losses of seafarers have been recorded.
Of course, the conflicts in Ukraine have led to the lengthening of shipping distances, which has kept ton-mile prices at high levels, while – despite the Houthi aggression in the Red Sea – there has been a positive impact of sailing at longer distances to avoid dangerous points in this area.
However, there is always the risk that, if the situation changes again, the market could face a downward correction.
Overall, the complex and dynamic nature of geopolitical events underscores the need for constant vigilance and adaptation by the shipping and trading industry.
Indeed, if contingency plans are developed, security measures are implemented and alternative shipping routes are explored, the industry can mitigate the consequences and ensure the unimpeded flow of trade.
Developments
On the other hand, it should not be considered unlikely that developments will shift towards a substantive resolution, which some would consider ominous for the profitable course of shipping companies.
However, coins always have two sides. Thus, on the one hand, prolonged disruptions could offer upward prospects, while on the other hand, achieving peace in Ukraine and the Middle East could “generate” new opportunities, as the reconstruction of the devastated areas would require the assistance of the shipping industry to transport all necessary materials and goods.
