![]() And so far, none of the ships that have had problems anywhere have been under one of those policies. But Indian, Chinese and Russian state companies have stepped in to offer policies. And while with the ever-tightening sanctions on the Russians because of the Ukraine war, to this point, that system has not been broken. ![]() A big part of that is because of the insurance structure, where every vessel who’s sailing anywhere has to get some sort of policy to ensure both their hull and their cargo. It’s getting longer by the day.īut but but but but but to this point, there has not been a meaningful break in the old system. And we’ve got the Chinese making ever louder noises about wanting to change the security environment in their own neighborhood, even as the Russians are actively making roughly two thirds of the Black Sea a no-go zone. We’ve got fresh piracy in places like Somalia, they’ve really gone away in places like the Gulf of Guinea or the Strait of Malacca. We’ve got Houthis in Yemen, who are taking potshots at pretty much every other vessel that happens to go by them, which has reduced shipping through the Red Sea by about 10% for energy and cargo. Now, we’ve got a drought in Panama, which based on whose numbers you’re using, and whether you’re going by value or tonnage, has reduced the throughput of the Panama Canal by somewhere between 1/3 and 2/3. And they’re gearing up for an overseas kit. Just a quick recap of what’s gone down in just the last couple of months: We’ve got Ukraine taking accurate potshots at Russian energy facilities on the Baltic Sea at a place called Ust-Luga, and on the Black Sea at a place called Toapsa. Today we’re going to talk about what’s going on in the world of maritime shipping, and why we should be thankful that nothing’s gone horribly wrong yet, and why we shouldn’t count on that continuing. Hey everybody, Peter Zeihan here coming to you from a chilly day in Delray Beach, Florida. 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. The looming threat of a shipping collapse should terrify you. 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 main thing propping up shipping in these more problematic regions is the emergence of “ghost fleets” with alternative insurance policies. No matter how much bubble wrap and caution tape we slap onto global maritime shipping, the industry has found itself in quite a predicament.ĭespite 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. Beyond that, Zeihan predicts, societies will need to invest more in regional trade as global trade becomes less and less viable.īelow is an excerpt from Peter’s Feb. 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. ![]() Many of these conflicts show signs of intensifying, raising important questions about the future of global maritime trade. 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.
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