Policy & Compliance
Has the golden age of trade come to an end? BIFA’s member policy & compliance director looks at issues affecting the maritime sector today and into the new year “ One of the biggest
As BIFA has warned many times, this will contribute to increasing shipping costs, which depending on the statistics used are anything up to 80% higher than in 2019. Continuing geopolitical instability remains a significant concern for 2025. The unresolved tensions in regions like the Red Sea and Persian Gulf could impact shipping operations well into the future. When announcing its services for 2025, MSC did indicate that at least some services would revert to using that route. However, given the increasing strength of the Houthis, most observers do not expect a resumption to full-scale operations until at least 2026, keeping carriers reliant on alternate routes around the Cape of Good Hope. This has become the ‘new normal’, adding perspective, this longer route restricts available shipping capacity, which keeps the pressure on rates. When researching this article, the writer discovered that this is not the first time that the Suez Canal has been subject to significant disruption. After the 1967 Six Day War, it was closed for eight years by the Egyptians – unlike the current situation where the canal to transit times, costs and emissions. From a wider
2 024 has been a troubled year for the deepsea container market, although many analysts believed that shipping lines would have suffered a poorer 2024 than has been the outcome. The Red Sea crisis, by forcing the re-routing of vessels via the lengthier Cape of Good Hope route, has saved shipping lines from having to deal with issues surrounding over-capacity as new vessels ordered during the pandemic were delivered during the year. Despite an increase in fleet capacity with newbuilds entering service, it is anticipated that further market disruptions could occur, offsetting the factors that could lead to a decrease in freight rates. The possibility of more US East Coast port strikes creates uncertainty; for instance Drewry has created scenarios both with
and without a strike in January. In both cases, it found that freight rates would continue to rise. Port strikes “will have significant inflationary impact on spot rates, not just on the US”. It has to be remembered that shipping acts on a global basis and impacts in one area will have knock-on effects in others, as vessels are redeployed and sailing schedules amended. Environmental legislation One of the biggest influences of recent years is the phasing-in of additional environmental legislation. As this is done piecemeal by jurisdiction, it adds complexity. The EU Emissions Trading Scheme (ETS) is being extended in 2025 when 70% of verified emissions will need to be covered by ETS allowances (up from 40%).
in fl uences of recent years is the phasing-in of additional environ - mental legislation. As this is done piecemeal by jurisdiction, it adds complexity
10 | December 2024
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