Shipping in a world of geopolitical challenges

Global shipping currently has to navigate through waters more unpredictable than for decades. Despite the threats, challenges and uncertainties ahead, a long career in this industry has taught me to accept and handle its cyclicality. I can therefore be concerned about the recent trends, but still afford to stay rather optimistic.

Rightfully concerned because the very core foundations of global trade – predictability, openness, and clear international regulations – are under immense pressure. Optimistic because our industry has never been more innovative, more committed to sustainability, or more aware of its critical importance to society and driving the world economy forward.

Sweden and Scandinavia have long been pioneering maritime nations. From the early days of trans-Baltic trade to our modern world-class shipping clusters in Gothenburg, Malmö, Oslo, and Copenhagen, the region has punched well above its weight in shipping competence. Companies across Scandinavia – shipowners, logistics specialists, technology firms, and research institutions – have all helped to set global standards in efficiency, safety and also in decarbonisation. This heritage definitely shapes my own perspective. I wholeheartedly believe in open markets, international collaboration, and the free movement of goods. Yet seldom has my belief been more challenged.

The current geopolitical landscape has introduced a level of uncertainty that affects every vessel, every route, and every supply chain. Trade – normally the quiet enabler of economic prosperity – is now frequently at the frontline of political confrontation.

The United States, traditionally a champion of open markets, has over the past years adopted a significantly more protectionist posture. The latest round of tariffs, trade barriers, and politically targeted restrictions imposed by the current administration have implications far beyond bilateral relations. For European and Asian shipping companies, including NYK, these measures distort long-established trading patterns and massively complicate our strategic planning.

When tariffs are imposed suddenly, cargo flows shifts unexpectedly. Established shipping services become unviable overnight. Equipment imbalances increase. Costs rise. The ripple effects cascade across global networks. For export-oriented economies such as Sweden – with its strong automotive, industrial, and forestry sectors – the recent uncertainty in U.S. trade policy is particularly worrying. When the world’s largest importer suddenly becomes the most unpredictable partner, the consequences reverberate through quite literally every ocean.

Shipping is also facing the reality of geopolitical instability in critical maritime chokepoints. The ongoing tensions in Yemen and the wider Red Sea region have forced many lines, including NYK, to reconsider their Suez Canal transits. Drone attacks, missile threats, and insecurity in adjacent waters have turned what was once a predictable shortcut into quite a risky undertaking.

Re-routing around the Cape of Good Hope increases our sailing distances dramatically – by as much as 3,500–4,000 nautical miles on the Asia–Europe services. This means higher fuel consumption, increased emissions, longer lead times, and ultimately higher costs for our customers and global consumers. It also undermines schedule reliability, something the industry has fought hard to improve in the aftermath of the pandemic.

Scandinavian shippers, many of whom rely heavily on stable Asia–Europe supply chains, feel this impact acutely. Swedish exporters of machinery, paper products, pharmaceuticals, and consumer goods are all experiencing the downstream effects of these disruptions.

The Red Sea situation is a stark reminder that global trade still depends on a handful of narrow corridors. When these choke, the world immediately feels it.

Yet, possibly the most profound challenge we face right now is not geopolitical, but environmental. The International Maritime Organization’s (IMO) recent and much anticipated vote on the Net Zero Framework regulations was one of the most significant regulatory milestones for global shipping in decades. The proposal, aimed at setting binding targets and market-based measures to achieve zero greenhouse gas emissions by 2050, represented a long-awaited step toward tangible and ambitious climate action.

However, on October 17, 2025, it all came to an abrupt halt. The decision to delay implementation following tough pressure from the United States has suddenly left the industry in limbo. For companies like NYK – already deeply invested in sustainable technologies, alternative fuels, and fleet decarbonisation – the postponement creates an uncomfortable and problematic uncertainty.

On one hand, we understand the concerns of developing nations and smaller fleets. A rapid transition without adequate support risks creating inequities within global shipping. These voices deserve to be heard. On the other hand, the climate clock is relentlessly ticking. Every year of delay makes the future trajectory steeper, the necessary investments become larger, and the transition more complex.

NYK has long been at the forefront of environmental innovation. From LNG-fuelled car carriers to research into ammonia and hydrogen propulsion, from digital optimisation systems to shore-power initiatives, our company has made sustainability a core strategic priority. But without clear global rules, long-term capital planning becomes more difficult. Major decarbonisation investments require commitment and predictability – not just vision. 

Although IMO’s postponement does not materially change NYK’s overall sustainability ambitions, it does however mean we must now carefully navigate a transitional period where regulatory uncertainty coexists with urgent environmental responsibility.

As a true globalist, I remain convinced that open seas and open markets increase prosperity, strengthen international connections, and reduce geopolitical friction. Free trade has lifted more people out of poverty than any other force in modern history. Just to illustrate: in 1980, there were some four and a half billion people in the world, and forty percent lived in poverty. Since then, we’ve gained roughly four billion new consumers, all enjoying a similar standard of living as we had in Sweden back in 1978. Fewer than ten percent live below the poverty line today. This would just never have happened without ample supply of cheap and effective transportation.
  
The alternative – fragmented economic blocs and protectionist barriers – benefits no one, least of all maritime and foreign-trade dependent nations like Japan and Sweden.

But we must be honest: the world is clearly becoming more fragmented, not less. Recent trade wars, regional conflicts, and divergent regulatory regimes threaten the openness that global shipping relies upon. For the maritime sector – and for all who depend on it – our response must be twofold.

First, we must continue to advocate for international cooperation.  

Shipping has always been governed by global rules. IMO regulations, safety conventions, and open-registry principles have allowed the industry to function across borders. Defending this global system is absolutely essential. Sweden, with its long history of active participation in international maritime governance, has an important role to play.

Second, we must double down on innovation, efficiency, and environmental responsibility.  

Geopolitical uncertainty cannot be an excuse for inaction. The Scandinavian shipping cluster also here demonstrates that sustainability and competitiveness are not mutually exclusive – they are mutually reinforcing. The world’s most advanced vessel designs, digital optimisation tools, and green-fuel pilot projects frequently originate from our part of the world.

We, as NYK Group Europe closely collaborates with Scandinavian partners, and we see this spirit of innovation every day. It gives me confidence that, even in challenging times, the industry can jointly chart a responsible and forward-looking course.

Shipping is the most cyclical of industries and has many-a-time survived oil crises, wars, pandemics, and global recessions. It will survive today’s geopolitical turbulence as well. But survival is not enough. The task ahead is to steer the industry toward a future that remains open, sustainable, and prosperous.

For this, we need clear rules, stable trade frameworks, safe waterways, and a collective commitment to reducing emissions. We also need leaders – both political and industrial – who clearly understand that protectionism, fragmentation, and indecision ultimately impose far greater costs on society than openness and cooperation ever could.

Although our seas may seem more turbulent and troubled than before, with proper determination and collaboration, I do remain firmly convinced that globalisation will always prevail.