According to a U.N. Trade and Development Agency report released on Wednesday, the shipping industry is experiencing significant volatility due to rising geopolitical tensions and disruptions brought about by a wave new tariffs.

UNCTAD's maritime trade growth projection for 2025 has been revised downward due to a complex and uncertain global trading environment, a subdued industrial sector in major economies, and weakened Chinese demand for bulk commodities.

The overall volume of maritime trade is expected to grow by 0.5% per year, while containerized trade will increase at a slightly faster rate (1.4%).

The report highlights the fact that new tariffs and changes in trade policies are disrupting global supply chain.

The Russian war in Ukraine has complicated maritime navigation in the Black Sea. UNCTAD reported that the conflict in the Middle East increased shipping costs because vessels had to reroute around Cape of Good Hope after the Red Sea was disrupted.

In recent months, tensions between Iran & Israel have escalated, posing a risk of disruptions to the Strait of Hormuz. This is where 34% of all oil exports are transported by sea.

In the report's opening remarks, UNCTAD Secretary General Rebeca Grynspan stated that "not since the closing of the Suez Canal 1967 have we seen such sustained disruption of the arteries for global commerce."

Grynspan stressed that maritime transport needs to fundamentally rethink their operations in order to navigate fragile supply chain and increasing geopolitical uncertainty.

UNCTAD reported that maritime trade journeys have become longer. They went from 4,831 miles on average in 2018 to 5,245 in 2024, reflecting changes in trade routes, and geopolitics.

Grynspan stated that distance is no longer geography, but geoeconomics.

UNCTAD projects that the total volume of seaborne trade will increase by an average annual rate of 2.3% and containerized trade, by 2.3% from 2026-2030. (Reporting and editing by Alex Richardson; Olivia Le Poidevin)

(source: Reuters)