Shippers react to continued upheaval

Owners and operators are prioritising risk assessment and regulatory compliance and considering diversifying routes to help them navigate global trade in the coming year, according to trading platform, Container xChange.

The biggest ‘headache’ is the associated costs that they will have to bear on top of the rising operating costs that they have to already face, says Container xChange.

““There are still many geopolitical risks that have the potential to significantly impact shipping trade in 2024,” said Container xChange co-founder and chief executive, Christian Roeloffs.

“We have the Israel – Hamas war, the related situation in the Red Sea, the Russia Ukraine war with no end in sight, tensions between China and Taiwan and an increasing enlargement of the BRICS block.”

Of the current situation in the Red Sea where ships have come under attack by Houthi rebels, Roeloffs is more sanguine. “The Red Sea is a vital artery for global trade which is currently blocked,” he said.

“Thankfully, there are ways to circumvent that artery and keep the global trade moving and therefore, the trade is not stopped. Therefore, the red sea situation is acute but not chronic in the long term for the shipping industry.”

Container xChange’s December 2023 survey of shipping professional threw up the following key highlights:

• Shippers are prioritising ‘risk assessment and scenario planning,’ ‘diversification of routes and suppliers,’ and ‘regulatory compliance’ in 2024.
• The biggest concern arising from geopolitical upheaval is the associated costs.
• The inclusion of new economies in the BRICS bloc, including Saudi Arabia, Iran, UAE, Egypt and Ethiopia, sets the stage for potential polarisation of global trade.
• Technological tools such as predictive analysis and forecasting will take centre stage.
• Sanctions compliance will be critical to ensure robust supply chains.
• Fluctuating freight rates are a concern.