This article is written by Austin Garcia
Theglobal shipping industry is at a crossroads, facing a unique challenge in the form of the shadow fleet. This fleet, largely unregistered and unregulated, has seen an unprecedented growth of 17% this year, primarily due to the geopolitical situation involving Russia and Ukraine. The Grey Tanker Fleet, as it’s known, now boasts a staggering 787 units, accounting for 8.5% of the total tanker capacity. This isn’t the 1st time shipping and economics have faltered due to the Russia and Ukraine War. Russia had previously switched its shipments east to maintain high oil and gas revenues as well as combating sanctions.
The sheer size of the Grey Fleet makes it a Herculean task to regulate. With these tankers representing 13.7% of the global tonnage, their exclusion from the market could potentially trigger an economic shockwave. Brokerage firm BRS has issued a warning, advocating for a gradual and targeted approach to regulation to prevent undue market volatility.
Meanwhile, littoral states around the Baltic, spearheaded by new NATO member Sweden, are pushing for a more aggressive crackdown on Russia’s shadow fleet. Their concerns are not unfounded. The potential for an environmental disaster looms large, with several near-misses reported among the aging fleet of tankers over the past year.
The shadow fleet issue underscores the delicate balance between economic stability, environmental safety, and political considerations. It highlights the complexity of regulating the shadow fleet without causing undue economic disruption. As the situation continues to evolve, the global shipping industrywill need to navigate these challenges with care and precision. The future of global trade could very well depend on it.
The growth of the shadow fleet may increase the needs for friendshoring. Friendshoring is when theirs is a push for businesses to restructure supply chains, shifts production away from geopolitical rivals to friendly powers. Mexico is a great ally for friendshoring efforts as Mexico has no geopolitical rivals . Here at TradeFlex we are a leading platform for trade and made in Mexico insights, aiming to help individuals and businesses navigate the complexities of the global supply chain industry. Whether you’re a seasoned professional or just starting out, having the right resources and information can make a difference in tackling the challenges posed by the shadow fleet. Visit https://trade-flex.com/ to stay updated and contribute to the solution.
