As I told Safety4Sea back in April of this year, it is interesting to think about the next five years in shipping when even the past five quarters have been so incredibly dynamic. Climate change and decarbonization are playing an ever-larger role in the maritime industry, while ongoing crises in Gaza and the Red Sea continue to disrupt global trade. Given everything going on, and the speed at which a singular event can change your operational capabilities, our priorities at Veson have focused on building processes and systems that allow our clients to respond with the help of data in context.  

For the past 15 years, Veson has been building a system of record at the core of maritime commerce. Alongside our sustained organic growth with the IMOS Platform, we have recently augmented our business through a series of strategic acquisitions. In 2021 Veson acquired Oceanbolt, an innovative maritime data intelligence platform for bulk commodities, and in 2022 acquired Q88, a leading data and software solution for the maritime industry. In 2023, we acquired VesselsValue, a leading provider of maritime vessel valuations and market insights, and Shipfix, the collaborative data platform for the maritime and trade sectors driven by advanced AI-enabled tools. This powerful portfolio gives us a unique perspective, and underscores to our clients our ability to add context behind the contract.  

It also gives us the tools and data to understand what’s shaping maritime trade on a deeper level. In this first part of a two-part series, I will share some key insights on how geopolitics and sustainability are shaping the future of maritime shipping and what strategies we can adopt to thrive in this dynamic environment. It’s essential to highlight that while planning for foreseeable events is critical, Veson excels as an insight and technology partner equipped to support your business during unforeseen and unexpected challenges, providing decision and workflow support across the commercial shipping value chain.  

Let me begin with two risk factors dominating the conversation today: geopolitics and climate change: 

The geopolitical landscape and its impact on maritime shipping 

Geopolitical factors have always played a significant role in the maritime industry. Ever-changing global dynamics directly influence trade routes, fuel costs, and regulatory requirements, which in turn affect our operational efficiency and profitability. Recent shifts in global trade policies, such as the US-China trade tensions and the Red Sea Crisis, have led to increased uncertainty and complexity in maritime logistics.  

It is essential for businesses to stay informed and agile to navigate these challenges effectively. For example, as we enter the ninth month of escalating conflict in Yemen, Veson analysts are sharing data showing a notable shift in bulk trade flow dynamics as many owners continue to avoid transiting the Suez Canal. Although longer voyage times and increased earnings are buoying markets in the short term, our analysts are pointing out that increased costs to the owner could soon outweigh any benefits looking further ahead.  It is also useful to note that longer voyage routes inflict an environmental cost and reduce global freight capacity, driving commodity and asset prices higher. 

Navigating geopolitical challenges 

Geopolitical conflict can erupt at any time and in any number of locations around the world. This has major implications for global supply chains, from economic shocks to crew safety. Risk posture and market pricing shifts dramatically in these events. Preparing for these massive, unexpected changes requires a different, more urgent level of preparation, investment, and response. Similarly, a major trade route being compromised as we recently have seen with the Baltimore bridge collapse requires a response capability augmented by robust systems that allow for dynamic decision-making. 

Having the ability to see, understand, and act on the right data is key to making the right calls at the right time. By being proactive and well-prepared, we can mitigate the risks associated with geopolitical instability and ensure the resilience of our operations. Veson’s integrated platform offers the necessary tools to manage these risks effectively, ensuring that our clients can navigate both expected and unforeseen geopolitical challenges confidently. 

Sustainability initiatives in maritime shipping 

Next to geopolitics is the zeitgeist of sustainability. This is a critical focus area for shipping, not only because the stakes are so high for the future health of the planet, but because it is a primary driver of regulatory pressure and because there is a strengthening link between sustainability, carbon reduction, and access to finance. Indeed, sustainability has transitioned from a regulatory point of interest to a core operational consideration which sends ripple effects across multiple phases of the business cycle. 

Today, sustainable practices are imperative. The International Maritime Organization (IMO) targets for reducing greenhouse gas emissions are pushing us towards cleaner technologies and more efficient operations. As I told Safety4Sea, Climate change has been coming for a long time and requires a multi-decade investment strategy involving assets with quarter-century lifecycles; it’s something you can plan out as part of your CapEx and OpEx over a multi-year budget. Shipping had time to plan for regulatory changes like EU ETS, and we know the likelihood that it will be augmented by other frameworks—potentially regional or global—that will require their own investments in the future. These are good examples of tectonic change. But, while sustainability-linked change happens over more protracted timescales than geopolitical threats, they still require a committed investment in technology and data to tackle and understand the degree of complexity involved. 

Overcoming sustainability challenges 

Implementing sustainable practices in maritime shipping is not without its challenges. We face high costs associated with innovative technologies, the need for regulatory alignment across different jurisdictions, and the technical challenges of retrofitting existing fleets. However, there is tremendous potential for innovation and collaboration. By forming partnerships and investing in research and development, we can overcome these obstacles and move towards a more sustainable — not to mention, profitable — future. It’ll be through collective effort and commitment that we can achieve meaningful progress in sustainability. Veson’s comprehensive tools and workflow support make it easier for our clients and their trade partners to realize threats and opportunities live, from pre-fixture to post-fixture. 

Looking ahead to digitalization and the future of maritime shipping

Shipping companies and their partners and stakeholders need to prepare for all eventualities, both the highs and the lows. Re-routes around the Red Sea factored almost immediately into global commodity prices and freight costs, so to frequently adjust and stay on top of these changes, you must either invest in digital solutions that will allow you to make fast decisions, such as early detection systems, or have an oversized manual capability to respond once something has erupted, otherwise, you’re taking all the risk because when something happens, it’s an all-hands-on-deck event. In this context, building redundancy isn’t equivalent to adding unnecessary cost when you’re building future-proofing options. For example, buying and running dual fuel vessels today can be a prudent contingency against the uncertainties of tomorrow, ensuring that whichever way the wind blows, your fleet will have relevant ships.  

At Veson, we help industry stakeholders make better decisions in real time as they deal with these challenging events. One way we’re focused on doing this is by solving market inefficiencies, particularly around the ability to use data in context. The IMOS Platform, for example, enables context-rich decision support for stakeholders by automatically considering contract requirements in chartering, operations, trading, and accounting decisions. With the contract in the system and the ability to augment contractual information with data such as port congestion, maritime stakeholders can dramatically enhance their maritime operations. 

In this blog, I’ve touched briefly on how geopolitics and sustainability are reshaping the landscape in shipping, which must navigate complex geopolitical challenges while committing to sustainable practices to thrive. In the next part of this two-part series, I will delve into the transformative role of digitalization in shipping and unpack Veson’s strategic vision for the future. Read part two, Data in Context: Navigating Digitalization and the Future of Maritime Shipping, to hear my thoughts on how technology is revolutionizing our industry and driving new levels of efficiency and innovation.