The shipping industry appears to be headed for a prosperous period, driven by geopolitical conflicts and a limited supply of new ships, according to industry executives. This outlook comes despite the average cost of hiring ships being a third higher than the ten-year average so far in 2024.
The article cites rising tensions between Russia and Ukraine as a key factor. Disruptions caused by the war have forced oil tankers to take longer routes, pushing up shipping costs. Similarly, attacks on vessels in the Red Sea are prompting companies to avoid the region altogether, leading to longer journeys and higher freight rates.
Executives are optimistic about a prolonged period of high earnings due to these factors, coupled with the relatively low number of new ships being built. This limited supply combined with the increased demand is expected to keep shipping prices elevated for the foreseeable future. The article suggests that this boom period may be overshadowed by the underlying geopolitical issues causing the disruptions.
Source: Economic Times