The global shipping industry is confronting heightened geopolitical risks, driven by escalating political and economic tensions, particularly between the United States and China. Ongoing trade disputes, state-based conflicts, and regulatory shifts are introducing new uncertainties for fleet operators and shipowners.
With China’s dominant position in global shipbuilding and proposed US policies targeting Chinese-built vessels, fleet owners face potential delays, cancellations, and supply chain disruptions. Operators are now examining their exposure and exploring strategies to manage risks tied to evolving political and economic conditions.
Adam Ashworth, senior marine broker at Lockton, highlighted the evolving risk landscape, particularly as it relates to shipbuilding, trade disruptions, and insurance solutions available to fleet owners and operators.
“The global shipping industry is increasingly vulnerable to geopolitical risks. Political and economic tensions have risen since the January inauguration of US President Donald Trump. Meanwhile, state-based armed conflicts rank as the risk most likely to present a material crisis on a global scale, according to the World Economic Forum’s Global Risk Report 2025,” Ashworth said.
Fleet owners are being advised to prepare for scenarios that could significantly impact operations, including vessel delivery delays and order cancellations stemming from these risks.
In February 2025, the Trump administration introduced a 10% tariff on Chinese imports into the United States, which prompted China to file a dispute complaint with the World Trade Organization and raise the possibility of further retaliatory measures.
Ashworth noted that these are the initial steps in what could develop into a broader trade war, where shipbuilding is likely to be directly affected.
“The new US Trade Representative has already proposed, among other measures, steep US port fees on Chinese-built ships, and on any ship operator that has even a single Chinese-built vessel in its fleet or a single new building on order at a Chinese yard,” Ashworth said.
Ashworth pointed out that if implemented, these measures could have significant consequences for the global shipbuilding industry, with ripple effects on ship operators.
“Today, China is the pre-eminent force in global shipbuilding. Chinese shipbuilders dominate the market with 53% of the shipyard output in 2024, according to shipping services provider Clarksons. China has quickly gained market share in the past decades to the detriment of other players such as South Korea and Japan,” he said.
In addition to potential trade restrictions, Ashworth cited escalating tensions between China and Taiwan as another factor that could disrupt fleet operators’ relationships with China-based shipbuilders.
“Fleet operators may face delays to the delivery of new ships, or even their cancellation. Growing conflict could also increase doubts over the security of already-ordered Chinese vessels.”
Ashworth noted that the industry is unlikely to receive much advance warning if these risks materialize.
“Any such event is likely to come at short notice for the industry. Owing to the long-tail nature of shipbuilding, fleet owners are unlikely to be able to recalibrate supply chains quickly enough to avoid the impact,” he said.
Despite the challenges, Ashworth said fleet owners can take steps to reduce their exposure to these risks.
“Such measures may include assessing business exposure to shipbuilding risks, including the reliance of future performance and growth projections on Chinese-built vessels, and the potential impact of delayed delivery.”
He also recommended exploring contingency measures in case of delays, confiscations, or other disruptions. “For example, businesses may wish to explore potential supplier relationships in countries with lower exposure to risk,” Ashworth said.
Increased attention to evolving regulatory and sanctions frameworks is another area Ashworth highlighted. “Staying abreast of country-specific sanctions and regulatory changes relevant to global shipping, as well as the cost of complying with any such sanctions,” is essential, he said.
Ashworth also suggested educating internal teams about these evolving risks. “Educating teams on potential threats, including supply chain issues and evolving import processes, denied parties, and sanctions,” he said.
On the insurance front, Ashworth noted that demand for Trade Disruption Insurance (TDI) products has risen in recent months.
“As a result of the growing threat to the industry, recent months have seen an uptick in interest for Trade Disruption Insurance (TDI) products worldwide, including from operators of Chinese-built vessels,” he said.
“TDI typically provides cover for whole or partial deprival of income following events that take place away from the operator’s asset,” Ashworth said. “This can include cover for lost income due to: failure to deliver, inability, or extra cost of, discharging, expropriation and confiscation, quarantine, arrest, or detainment, the introduction of new legislation, third party blockage / border closure (political risk).”
Some insurers have begun incorporating technology to enhance TDI offerings. “Certain insurers have expanded their TDI product offering in recent months, with products backed by artificial intelligence to analyse disruption risks across geographies and supply chains,” Ashworth said.
Ashworth also noted shifting insurer appetites for political risk coverage. “Appetite and scope for political risk, meanwhile, wavered in 2024, with many insurers already having increased their aggregate exposures in this region. However, there continues to be some strong security willing to offer effective coverage to help shipowners de-risk.”
Ashworth said that despite tightening market conditions, insurance remains an important tool for operators seeking to manage the complex and fast-changing geopolitical risk environment.
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