The rules governing global shipping are breaking down, according to 18 of the world’s leading maritime nations, which have warned that wars and the rapid expansion of a shadow fleet operating beyond western oversight are threatening the foundations of global trade.
The shipping industry has for decades relied on international laws guaranteeing free navigation and the neutrality of commercial vessels. But the erosion of those principles is creating serious risks for global commerce, according to the Consultative Shipping Group (CSG), whose members represent more than a fifth of global trade by tonnage.
“Without maritime trade, supply chains would fragment and the global economy as we know it would come to a sudden halt,” the group said in a statement published on Tuesday.
The CSG said the battle to control the Strait of Hormuz, the Covid-19 pandemic and the emergence of a shadow fleet following US, EU and UK sanctions should no longer be viewed as isolated disruptions. Instead, they are “signals of a structural shift in the operating environment of global trade”.
The statement marks the first public intervention by the CSG since it was established more than 60 years ago. Its members include Greece, Singapore, Denmark, Japan, Canada, the UK, the Netherlands and South Korea.
“Shipping routes are increasingly instruments of leverage and risk,” the CSG warned, saying recent events had demonstrated how “fragile” the system of maritime trade can be.
Brian Wessel, director-general of the Danish Maritime Authority, which chairs the CSG, said the rare intervention reflected growing concern over the fragmentation of the maritime sector and the weakening of standards established by the International Maritime Organization, the UN body responsible for regulating shipping.
“For decades, we have built global trade on the assumption that ships can move freely across borders. That assumption is now under pressure,” he said.
“The global level playing field [and] the global regulations that we’ve made for many, many years in the IMO have been taken for granted,” he added.
More than 80 per cent of world trade is transported by ships operating under rules established by the IMO. The organisation was formally created in 1948, although the principle of international governance of the oceans stretches back to the 17th century, when the concept of mare liberum, or “free seas”, was first established.
The strategic importance of shipping has also made commercial vessels increasingly vulnerable to geopolitical conflicts. Russia, Ukraine, the US and Iran have all hit civilian shipping targets during conflicts this year, while the vulnerability of major maritime chokepoints has been highlighted by Iran’s efforts to establish a fee-paying regime in the Strait of Hormuz.
Tehran said on Monday that a deal with Oman to manage shipping through the waterway was close to being agreed. About a fifth of the world’s oil and gas previously flowed through the strait, although it remains unclear whether a toll would be imposed.
Shipowners and maritime organisations have warned that charging a fee could create a dangerous precedent, potentially encouraging other countries bordering critical chokepoints to adopt similar measures.
Meanwhile, US, EU and UK sanctions on Russia and Iran have contributed to the rapid growth of a shadow fleet of oil tankers. According to TankerTrackers.com, the fleet now exceeds 1,500 vessels, almost a fifth of the global tanker fleet, with nearly all lacking traditional insurance policies.
The risks were illustrated this summer when the Caroline Bezengi, a shadow fleet vessel carrying roughly 800,000 barrels of Russian oil, struck a limpet mine off Oman. Without traditional protection and indemnity insurance, the incident potentially left the Omani government facing millions of dollars in clean-up costs.
