Carbon regulation and Trump 2.0 are the obvious factors everyone is focused on in 2025 — but don't overlook the impact of transparency, Africa, asset prices, and AI next year

1. Be transparent about carbon

The International Maritime Organization won’t wave a magic wand by 2025, but the consequences of regulatory decisions on how to decarbonize the shipping industry by 2050 will be huge.

The specifics of these policy measures will shape the shape of international shipping, capital flows across the maritime value chain, and have a major impact on many countries’ economies and global trade.

They will determine whether investment decisions are finally made to kick-start the delivery of carbon-free fuels and the infrastructure needed.

They will determine whether the early movers who have collectively invested billions of dollars in decarbonization projects and created voluntary schemes – promoting everything from transparent green finance to climate-smart ship chartering – are joined by a group of fast followers or left with stranded assets.

Otherwise, the IMO will be unable to agree on a compelling plan. In that case, the global shipping industry would be forced to comply with a costly, regionalized mishmash of regulatory regimes that undermines the very concept of global regulation for a global industry.

Either way, clarity on shipping carbon emissions will be the defining factor of 2025 — and perhaps the decades to come.

2. Shaped by Trump 2.0

Even before he takes office on January 20, 2025, trade routes are adjusting to the unpredictable disruptions expected from a second wave of Trumpenomics.

Yes, the rhetoric of his campaign speeches is quite different from the reality of his administration—and no, he won’t do everything he says. But Donald Trump will be a decisive force shaping the shipping industry in the coming year.

The expected shift in US climate policy won’t be enough to derail the shipping industry’s major carbon decisions (Trump has limited influence in the halls of the IMO). The momentum behind domestic clean energy in the US and global climate action is strong enough to withstand four more years of Trump.

But a climate-skeptical America will change the timelines for many green investments that are made. For example, the United States under Trump will be cemented as the world’s leading producer of green hydrogen—but its green hydrogen market will shrink significantly.

The more immediate impacts, however, will be focused on trade, tariffs, and any US foreign policy response to a growing array of global conflicts, from Russia to the Middle East.

Increased use of tariffs will disrupt trade routes in the near term, potentially leading to demand destruction in the medium term and a less favorable global trade environment.

The big issue to watch will be the US-China relationship. To the extent that this causes trade diversion, it will have a significant impact on shipping rates.

Much of Trump’s sanctions strategy, meanwhile, remains unclear—and, given past experience, unpredictable.

Sanctions were a key tool in the Trump administration’s first foreign policy strategy, which focused on a campaign of maximum economic pressure on Iran.

It’s reasonable to expect that sanctions will feature prominently on Trump’s foreign policy agenda in his second term.

In short: prepare for impact—2025 promises to be a bumpy ride!

3. Fuel pragmatism applies

The outcome of the debate over carbon emissions regulation will determine future choices about which ships to order and when.

But both the IMO’s optimists and sceptics recognise that the immediate options are commercially limited in the near term. The surge in fuel pragmatism that has seen a shift back to conventional fuels and liquefied natural gas this year will continue into 2025.

When Lloyd’s List readers were asked in December which fuel they would choose if forced to order next year, 32% said LNG and 24% chose conventional.

Part of that is due to technological resistance—ammonia engines are coming, but testing is taking longer than originally expected, and no one is cutting corners on the dangerous fuel because it’s too expensive to use any time soon.

Furthermore, it is increasingly accepted that ammonia may not be used as a ship fuel until around 2030 due to technological and infrastructure challenges.

However, the key question that remains unanswered is whether regulatory clarity next year will be enough to spur investment in fuel supply and close the cost gap with conventional fuels.

A decision by 2025 seems overly optimistic, so brace yourself for another year of delay and owners making the least bad decisions possible.

4. New shipbuilding prices may fall

Among the winners of 2024, shipbuilders, especially Chinese shipyards, can be seen.

China’s success in attracting new orders is so great that it now accounts for 71% of all new cargo ship orders, up from 65% in 2023.

But high asset values ​​remain the main barrier to higher deal flows. In addition, shipyards are full, newbuilding prices are stable and delivery dates are several years away, limiting options.

However, consider this scenario: increased capacity and reduced ship orders will lead to increased shipyard capacity and lower prices, led by Chinese shipyards.

Yes, it could be…

Despite the growing orders, the changing freight market and the potential slowdown in the industry’s green transition are certainly raising the risk of overcapacity, while potential geopolitical shocks are increasing with Trump’s rise.

However, those yard slots are still extremely tight, so even if prices do fall, it’s likely to be a slow process. But the fall in prices is itself a very important signal.

And the CNY exchange rate could see a significant devaluation next year to counter US tariffs, which would also give Chinese shipyards room to lower prices.

Watch this space.

5. Transport needs more transparency

Lloyd’s List’s previous outlook confidently asserted that the shipping industry would continue to improve transparency through a combination of carbon accounting, financial compliance, and supply chain digitization.

We were half right, and continue to emphasize that aspect of the forecast for 2025.

It is clear that a significant portion of the global fleet is not meeting our transparency projections — and it looks like the dark fleet will likely get even darker by 2025.

We may have been a little premature in our previous predictions of industry-wide openness, but we believe the first signs of greater transparency and collaboration across the value chain are now emerging.

To date, shipping has been the opaque element of the end-to-end supply chain, but the “triple scope” requirements of customers and customers’ customers suggest a one-way street when it comes to expansion.

Such changes may seem more unpalatable when others are making huge profits with untouchable ownership and imaginary insurance, but the level of transparency that situation imposes on others is undeniable.

We have never asked for more from legitimate shipping, and not knowing who is behind a ship, company or entity, is often a barrier to trade.

So while a worrying part of the world’s shipping fleet may be the most opaque it has ever been, the more opaque the opaque fleet becomes, the more open the rest of the industry must become.

6. Issues related to Russia

The political effectiveness of sanctions was initially measured by the severity of the financial damage they could inflict on Moscow — but this year, politicians finally woke up to the damage they could do to themselves.

European governments are increasingly concerned that the uninsured dark fleet poses a clear and present danger to their shores. But they may have calculated this risk too late.

Accidents have already begun to happen, and it is now inevitable that one of these uninsured perils will cause a major disaster. At that point, questions will be asked about why action was not taken sooner.

There will be calls to continue to restrict freedom of navigation, and friendly ports will no longer allow these ships to dock, further alienating the fleet and making it no longer subject to mainstream shipping and safety standards.

There is a similar air of inevitability when it comes to cyber risk.

Everyone knows the threat, has heard the doomsday scenarios from nervous CIOs, and understands how costly it would be to have to reboot an entire global company.

If the past few years have taught us anything, it’s that global supply chains are incredibly vulnerable.

The energy value chain is under siege, digitally speaking, against attacks on a daily basis. Their spending on cyber defenses is commensurate with the threat they face. In shipping, that’s not the case.

At some point, it will be easier for bad guys to attack the weak points in this value chain, and shipping is looking particularly vulnerable right now.

In both the case of the shadow fleet and the cyberattack, the response may be too late.

7. Artificial Intelligence Al Fever

The AI ​​craze is starting to get a little suspicious, but by 2025, the industry will start to push for more practical and reliable applications of this new technology (rather than seeing it as a panacea).

Agentic AI, a new generation of systems and models that can work autonomously to achieve goals without constant human guidance, has practical and valuable applications — but it needs to be focused.

Another acronym you’ll hear a lot more about in 2025 is ERP — enterprise resource planning. This is a software system that helps businesses manage their day-to-day operations.

Currently, the ERP landscape in shipping isn’t really fit for purpose, but that’s changing rapidly.

The industry has always been risk averse, so most will wait and follow through when they think they’re losing money. But next year, we will see some pioneering companies talking openly about transforming their operations through more advanced technologies.

It may be a far-fetched prediction, but 2025 could be the year when the rhetoric about digitization starts to become a reality.

8. Africa's voice will be louder by 2025

African countries will play a key role in the future fuel supply for the shipping industry. By 2025, Namibia is expected to be very much in the conversation.

With climate talks focusing on a “just and equitable transition”, much of the attention of high finance is now focused on Africa.

Namibia’s abundant renewable energy resources and strategic location make it ideal for the production of green hydrogen, and with early testing phases of projects underway, if the political climate is favourable under the governing agreement at the IMO and the United Nations Framework Convention on Climate Change, 2025 could be the year production accelerates.

9. Older, safer, more efficient ships

The flip side of the pragmatic argument when it comes to future fuels is the need to focus more heavily on the efficiency of existing fleets.

While much of the low-hanging fruit has been reaped over the years, fundamental trade barriers remain that prevent significant gains in everything from supply chain efficiency to the incredibly unsexy subject of paints and coatings.

But alongside the focus on operational efficiency measures is the question of how long quality older ships can be kept in service – assuming they are efficient enough to pass regulatory hurdles.

There is a movement in the industry to find ways to certify older ships as seaworthy, thereby increasing their lifespan and reducing their carbon footprint.

But at the same time, the focus is getting younger. With RightShip reducing the age of bulk carriers from 14 to 10 years to address their poor record compared to oil and gas tankers, a balance needs to be found between long-term efficiency and more stringent safety testing.

10. More volatility

Success in shipping is about navigating the unexpected and making sure you maximise your profits when times are good to ride out the downturn. Discipline is key, and it’s not always clear who the best players are until the bad times hit.

In general, we’re going into the new year with a pretty solid idea of ​​how the market is going to play out. But after five years of unforeseen supply shocks, no one is expecting anything but the unexpected.

For tankers, it’s impossible to rule out the possibility that fleet growth in 2025 could outstrip demand and remain under pressure.

In the container sector, if cargo ships unexpectedly return to the Red Sea, overcapacity could become a reality overnight.

In dry bulk, no one is expecting a bright 2025, but the industry could be in for a lot worse if supply doesn’t tighten. So, if just a few factors change, any predictions become meaningless.

As our year-end outlook poll shows, geopolitical risks will be the decisive factor in shaping fortunes next year — and that means there’s not much to forecast for 2025 other than further uncertainty.

Source: VASEP