Shipping will do well if the rich stay rich and the poor grow richer
 Shipowners today face a dilemma familiar to any industry caught between regulation and innovation. They are reluctant to see their hard-earned profits siphoned off into wasteful government spending, preferring instead to reinvest in new vessels.
This reinvestment is not merely about expansion but about adaptation: modern newbuilds promise lower crew costs through automation, offsetting the burden of eco-friendly fuels mandated by regulators. These countervailing forces -higher fuel costs but lower labour expenses - converge in the hope of sustaining profitability. The expectation is that more cargo will flow through the vast container networks if all goes well. Yet, as history reminds us, even the best-laid plans can be overturned by unforeseen events, rendering predictions fragile.
Shipping does not operate in a vacuum. It is buffeted by the winds of geopolitics. Today those winds are particularly turbulent. The rise of populist movements across the West, epitomised by Donald Trump’s MAGA campaign in the United States, has inspired similar counter-revolutions from Melbourne to Munich. Polls show their growing popularity, reflecting a deep divide between elites and ordinary citizens. In Europe, this divide is cast as “the elite versus the street” or “the mob versus the blob.” In North America, it is small ‘c’ conservatives against the “deep state.” Australia, Canada, and the UK mirror these tensions, with entrenched bureaucracies facing populist opposition.
Legacy media, largely aligned with establishment interests, has acted as the mouthpiece of the administrative state. Yet its monopoly has been broken by social media, which has allowed dissenting voices to spread globally and repeatedly. This shift has denied the establishment the total dominance it once enjoyed.
For shipping, the immediate disruption may be limited, but the long-term implications are profound. If the climate crisis narrative - long defended by regulators - is increasingly challenged, then the mandates, bans and bureaucracies built upon it, may crumble. Properly qualified scientists, once marginalised, argue that the Net Zero agenda is a costly illusion. If their views gain traction, shipping could be freed from burdensome regulations, reshaping the industry’s trajectory.
The erosion of trust in official narratives extends beyond climate policy. Social media has exposed the fragility of establishment claims, from the myth of gender equality to the Y2K scare, from manipulated Covid casualty figures to the coercive vaccine mandates. Each episode has chipped away at public confidence.
The climate change agenda, promoted by the deep state and sanctified by the World Economic Forum, is seen by many as a tax farm and job creation scheme rather than a genuine environmental crusade. While the WEF’s ends may align with certain democratic aspirations, its methods - regulation that forbids alternative lifestyles - remain objectionable. It is important to assess such concepts critically, keeping what is useful while rejecting authoritarian impositions.
Against this backdrop, shipping faces persistent war risks. The Houthis in Yemen, backed by Iranian money, continue to threaten vessels in the Arabian Gulf. This has boosted the Cape route’s share of Asia-Europe traffic, with potential benefits for sub-Saharan Africa. Ukraine’s drone strikes on Russia’s Black Sea port of Novorossyisk have prompted Moscow to declare Greek and Turkish shipping fair game, further destabilising the region. These conflicts ensure that war risk insurance remains high, shaping trade routes and costs.
Meanwhile, shipbuilding orders are swelling, driven partly by tax avoidance strategies. Eastern yards are producing both large vessels of 8,000 TEU and above, and smaller feeders under 4,500 TEU. This reflects the evolving trade landscape: the EU and US are decoupling from China, diversifying sourcing to Vietnam, Thailand, Indonesia, and the Philippines. Large ships will handle long-haul routes, while feeders will manage regional traffic, linking ASEAN ports to hubs like Hong Kong and Singapore. India, too, is asserting its maritime ambitions, with Tuticorin and Colombo poised to play larger roles in Asia-Europe trade. Intra-Asian trade, already growing, is likely to continue its upward trajectory.
The decoupling trend is reinforced by surveys of Western chambers of commerce in China, which show companies shifting operations elsewhere. America is leading in reshoring and homeshoring, with Europe following at a slower pace. This dispersal of sourcing points to a hub-and-spoke model of global shipping, where feeders consolidate cargo at major ports for onward carriage to Europe and the Americas. India’s rise as a major player will further diversify flows, adding resilience to the system.
The Middle East remains volatile. Unless Israel decisively eliminates Hamas, a stalemate will persist, emboldening Houthis and other rejectionist groups to menace shipping in the Gulf and Red Sea. Europe’s reluctance to absorb the flood of tonnage from the shipbuilding boom makes the longer Cape route more attractive, conveniently soaking up excess capacity. Black Sea shipping, by contrast, remains marginal. Russia appears content with its current territorial gains, while the US, focused on rearming against China, has lost interest in prolonging the Ukraine war beyond a minimal casualty resolution.
The broader picture is one of adaptation. The shipbuilding rush, combined with decoupling and reshoring, points to a reorganisation of global shipping into hub-and-spoke networks. ASEAN ports will feed cargo into major hubs, while India expands its role. War risks will continue to shape routes, but the industry has always thrived on resilience.
Underlying all this is the trajectory of global poverty. The UN once projected extreme poverty would be eliminated by 2020. In reality, capitalist development in the third world achieved this milestone by 2012, except in war zones. If this trend continues, shipping volumes will rise or at least hold steady, even amid decoupling and homeshoring. As the more numerous poor grow richer, and their consumption of low-end consumables increases, this will drive demand for container shipping. Meanwhile, the rich remain rich, sustaining luxury and high-value trade. Together, these dynamics ensure that shipping will not only endure but prosper.
In conclusion, world shipping is poised to hold its own despite geopolitical upheaval, regulatory burdens, and shifting trade patterns. Automation and newbuilds will offset eco-fuel costs. Social media will continue to undermine establishment narratives, possibly freeing shipping from unnecessary constraints. War risks will reshape routes but also create opportunities. Decoupling from China will diversify sourcing, strengthening hub-and-spoke networks. And most importantly, the steady rise of wealth among the poor will sustain demand. If the rich stay rich and the poor grow richer, shipping will remain the backbone of global commerce, resilient and indispensable in the decades ahead. |
