Unraveling the political impacts of international shipping
As one of the main sources of international trade, shipping has quickly become a core component of politics across the globe. According to the ICS Maritime Barometer Report 2022-2023, the impact of political instability is a key concern for many seamen and shipping companies. This reaches beyond the impact of war and attacks such as those we’ve seen in the Red Sea recently, but also on areas like supply chain resilience, freight trading jobs and when and how greenhouse gas reductions need to take place. All of these things are significantly impacted by a lack of government decisions and political unrest. In this article, we’ll be breaking down the political impacts of international shipping and how the industry can be affected by politics.
Geopolitical tensions and trade routes
There are a number of ways that geopolitical tensions between nations can affect trade routes. For example, the Strait of Hormuz or the South China Sea are key trading routes that could be quickly closed to international shipping in light of conflicts between nations. There may be military conflicts or even disputes over territorial claims that can disrupt the flow of goods through these areas.
We are already seeing geopolitical tensions having a significant impact in the Red Sea in 2024. With tensions rising between the Houthi and any Israeli ally (including the US and UK) to the point of numerous civilian-operated cargo ships being seized, many shipping companies are aiming to find alternative routes or are at risk of being fired upon. The Red Sea is a strategic waterway as it avoids a long detour around Africa, making it geopolitically significant, particularly when there is a disruption in the area.
Maritime security and piracy
Political instability can also have an impact on maritime security, which has a larger scale impact on the shipping industry and poses challenges to the government.
This is particularly true in coastal regions, as this often creates conditions that allow for piracy and armed robbery at sea. In regions like Somalia and the Gulf of Guinea, political instability has been linked to a rise in piracy incidents.
This can also undermine the ability of states to enforce maritime laws and regulations. Political instability leads to limited resources and corruption, which can therefore weaken border control measures and surveillance efforts. This makes the country more vulnerable to illegal activities such as smuggling or human trafficking.
Regulatory frameworks and compliance
Political decisions can influence a lot around maritime regulations and compliance. In fact, it is government legislation that can help to ensure safety, security, environmental protection, and fair competition within the industry. Things like vessel standards, crew training, liability, and even environmental requirements to reduce pollution all come from politics.
In addition, international conventions and treaties that allow for the opening of new trade deals and shipping waterways are all influenced by political decision-making. When political instability comes into play, making these decisions or upholding them can take far longer, leaving the industry in a state of limbo in many cases, which can cause significant delays.
In conclusion
Navigating geopolitical conflicts and instability remains a challenge for the industry, while organisations such as the International Maritime Organization (IMO) continue to act as a platform for governments to keep the industry moving despite this.
As we reflect on the different elements that may impact international shipping across the globe, it truly highlights the importance of political stability and cooperation in ensuring the smooth functioning of global maritime trade.
