Geopolitical Conflict Increasing Threats to Global Shipping

Hilary Tuttle


June 20, 2024

Container ship on a world map

While large vessel losses hit a record low in 2023, geopolitical risks are rapidly increasing the threats to global shipping, according to Allianz’s Safety and Shipping Review 2024.

Attacks on ships in the Red Sea by Houthi militants have led to significant changes in global shipping routes, with traffic through the Suez Canal (the primary passage between Europe and Asia) down more than 40% at the beginning of 2024. Alternate routes require circumnavigating Africa, meaning increased delays and costs for companies with global supply chains, as 90% of international trade is transported by sea. Rerouting along the Cape of Good Hope adds over 3,000 nautical miles and at least 10 days of sailing time for any vessel, while also increasing exposure to storms and rough seas that are harder on smaller ships that usually stick to coastal waters.

As ships attempt to speed up to regain time, rerouting also has a significant environmental toll, with Red Sea diversions driving a 14% increase in emissions from the EU shipping industry alone last year.

With more shipping traffic around the Horn of Africa, Somali piracy has also reemerged as a threat. In December, pirates staged the first successful hijacking of a vessel off the coast of Somalia since 2017 and attacks have continued throughout 2024.

Hilary Tuttle is managing editor of Risk Management.