With major wars, sanctions, tribal militias, and pirate gangs each disrupting the world’s waterways, global maritime trade is becoming more complicated, more expensive, and more dangerous. Many of these conflicts show signs of intensifying, raising important questions about the future of global maritime trade.
Straight Arrow News contributor Peter Zeihan says it is only a matter of time before a single catastrophe pushes the entire global shipping industry past the breaking point. Beyond that, Zeihan predicts, societies will need to invest more in regional trade as global trade becomes less and less viable.
Below is an excerpt from Peter’s Feb. 1 “Zeihan on Geopolitics” newsletter:
No matter how much bubble wrap and caution tape we slap onto global maritime shipping, the industry has found itself in quite a predicament.
Despite the Ukraine War, a drought impacting the Panama Canal, Houthi attacks in Yemen, widespread piracy, and mounting geopolitical tensions in the South China Sea (yes, that is a lot of disruptions), the maritime shipping system has not cracked yet. However, it is very, very, very fragile.
The main thing propping up shipping in these more problematic regions is the emergence of “ghost fleets” with alternative insurance policies. This insurance system is untested and unreliable, and as soon as one of the dominos falls, the entirety of the shipping system will follow.
The looming threat of a shipping collapse should terrify you. In case you need a supply chain refresher, manufacturing and global shipping is more interconnected than ever… so if the global shipping system fails, we’re in for a world of hurt.