Global Shipping Industry Warns of Rising Trade Costs and Supply Chain Pressures

Senior executives from some of the world’s largest shipping companies and maritime industry organizations have warned that ongoing disruptions along key global trade routes are creating significant operational and economic challenges for international commerce, increasing costs for businesses and consumers alike.

The concerns were raised during a high-level meeting held on 28 May between industry leaders and World Trade Organization (WTO) Director-General Ngozi Okonjo-Iweala, where participants discussed the growing pressures on global supply chains, maritime transport networks and logistics infrastructure.

Representatives from leading global shipping lines emphasized that while the industry has demonstrated remarkable resilience in adapting to disruptions, alternative transport routes are becoming increasingly expensive, congested and difficult to manage. The discussions highlighted the importance of maintaining efficient trade corridors, strengthening logistics infrastructure and preserving international principles that support global commerce.

Maritime Transport Remains the Backbone of Global Trade

Maritime shipping continues to serve as the foundation of the global trading system.

More than 80 percent of world trade by volume is transported by sea, making shipping one of the most critical sectors supporting the movement of goods, raw materials, food products and manufactured items around the world.

From energy supplies and industrial components to consumer products and agricultural exports, international shipping networks connect economies across continents and enable global supply chains to function efficiently.

Any disruption to these networks can have far-reaching consequences for businesses, governments and consumers.

Trade Routes Under Increasing Pressure

Industry executives noted that disruptions affecting key maritime corridors—particularly in the Gulf region and other strategic shipping chokepoints—have forced shipping companies to seek alternative routes to maintain the flow of global trade.

While rerouting vessels can help avoid immediate risks, these alternatives often involve:

• Longer transit times;

• Higher fuel consumption;

• Increased insurance costs;

• Greater operational complexity;

• Reduced scheduling reliability.

As a result, shipping companies are facing rising costs that ultimately ripple through supply chains and contribute to higher prices for goods worldwide.

Executives warned that the cumulative impact of these pressures is becoming increasingly significant for global commerce.

Alternative Routes Come With Major Limitations

The meeting highlighted the practical difficulties involved in replacing maritime transport with other modes of transportation.

Although some cargo can be redirected through rail networks, road transport or alternative ports, industry leaders stressed that these options have limited capacity compared to ocean shipping.

One executive illustrated the challenge by noting that it can take approximately 70 freight trains to move the same volume of cargo carried by a single large container ship.

This enormous difference in carrying capacity underscores why maritime transport remains irreplaceable for large-scale global trade.

The scale and efficiency of shipping make it difficult for land-based alternatives to absorb significant volumes when major maritime routes are disrupted.

Growing Capacity Constraints Across Transport Networks

Industry representatives reported that capacity constraints are becoming increasingly visible across global logistics systems.

As companies redirect cargo away from affected maritime routes, pressure has intensified on:

• Rail corridors;

• Road transportation networks;

• Inland logistics hubs;

• Alternative seaports;

• Intermodal transfer facilities.

In many cases, these alternative routes are already operating near maximum capacity, leaving little room to accommodate additional cargo volumes.

The resulting congestion can lead to delays, higher costs and reduced reliability for businesses dependent on international trade.

Executives cautioned that sustained disruptions could further strain transport infrastructure and create additional bottlenecks.

Customs Delays Adding to Supply Chain Challenges

Another major concern raised during the discussions involved customs procedures and border management systems.

Industry leaders reported that shifting cargo through alternative routes often introduces new administrative and regulatory challenges.

Customs delays can become more frequent when goods move through unfamiliar corridors or transit multiple transport modes.

These complications can slow deliveries, increase storage costs and create uncertainty for importers and exporters.

Participants highlighted the need for more streamlined customs processes and greater coordination among national authorities to facilitate the movement of goods during periods of disruption.

Infrastructure Investment Viewed as Critical

The shipping industry emphasized that improving global trade resilience will require substantial investment in transportation and logistics infrastructure.

Key priorities identified during the meeting include:

• Expanding port capacity;

• Modernizing logistics facilities;

• Enhancing rail and road connections;

• Improving customs systems;

• Strengthening digital trade infrastructure;

• Increasing multimodal transport efficiency.

Industry leaders argued that better infrastructure would help reduce congestion, improve flexibility and enable trade networks to respond more effectively to future disruptions.

Investments in these areas are increasingly viewed as essential for supporting long-term economic growth and supply chain resilience.

Defending Freedom of Navigation

Participants also stressed the importance of maintaining international norms and agreements that underpin global trade.

Particular emphasis was placed on the principle of freedom of navigation, a longstanding foundation of international maritime commerce.

Freedom of navigation ensures that commercial vessels can move through international waters and critical shipping lanes without undue interference.

Industry representatives noted that predictable access to global trade routes is essential for maintaining stable supply chains and supporting economic development.

The continued functioning of international shipping depends heavily on respect for these principles.

WTO Highlights Importance of Supply Chain Stability

WTO Director-General Ngozi Okonjo-Iweala acknowledged the challenges facing the maritime sector and emphasized the importance of shipping to the global economy.

She highlighted the central role that maritime transport plays in supporting international trade and called for stronger collaboration between governments and private-sector stakeholders.

The Director-General stressed that maintaining efficient trade flows requires coordinated efforts across multiple areas, including trade policy, customs administration and infrastructure development.

She also encouraged ongoing dialogue between the WTO, shipping companies and other international organizations to better understand emerging challenges and identify practical solutions.

Trade Facilitation Seen as Part of the Solution

Addressing industry concerns regarding customs delays and administrative barriers, Okonjo-Iweala underscored the importance of fully implementing the WTO Trade Facilitation Agreement (TFA).

The agreement aims to simplify and modernize customs procedures while reducing unnecessary delays and trade costs.

Key measures promoted under the agreement include:

• Digital customs processing;

• Electronic documentation systems;

• Faster border clearance procedures;

• Improved information sharing;

• Greater transparency in trade regulations.

According to the WTO, effective implementation of these measures can significantly improve supply chain efficiency and reduce costs for businesses.

Digitalization Can Improve Trade Efficiency

The discussions also highlighted the growing importance of digital technologies in global trade management.

Digital customs systems, electronic cargo tracking and real-time information sharing are increasingly viewed as essential tools for improving logistics performance and reducing delays.

By replacing paper-based processes with digital platforms, governments and businesses can improve visibility, enhance coordination and speed up cargo movements across borders.

Industry leaders noted that investments in digital infrastructure are becoming just as important as physical investments in ports and transportation networks.

Importance of Avoiding Trade Restrictions

Another issue raised during the meeting was the need for restraint in the use of trade restrictions during periods of uncertainty.

The WTO has consistently emphasized that unnecessary trade barriers can worsen supply chain disruptions and increase costs for businesses and consumers.

Maintaining open markets and predictable trade rules is considered critical for supporting economic stability and ensuring that goods can move efficiently across international borders.

Industry representatives expressed support for policies that promote transparency, cooperation and market openness.

Global Shipping Leaders Participate

The meeting brought together executives from many of the world’s largest shipping and logistics companies, reflecting the broad industry concern surrounding current challenges.

Participants included representatives from:

• MSC;

• CMA CGM;

• COSCO Shipping;

• Hapag-Lloyd;

• Ocean Network Express (ONE);

• Evergreen Marine Corporation;

• Yang Ming;

• China Merchants Energy Shipping (Singapore).

Industry organizations represented included:

• International Chamber of Shipping (ICS);

• International Federation of Freight Forwarders Associations (FIATA);

• World Shipping Council.

Together, these organizations represent a significant portion of global shipping capacity and international freight activity.

Building More Resilient Global Supply Chains

The discussions underscored a broader reality facing the global economy: supply chain resilience is becoming increasingly important in an era of geopolitical uncertainty, climate-related disruptions and evolving trade patterns.

While the shipping industry has demonstrated a strong ability to adapt, executives warned that continued pressure on key trade routes could create additional challenges if infrastructure, policy frameworks and international cooperation do not keep pace.

The WTO and industry leaders agree that maintaining efficient, reliable and open trade networks will require sustained investment, regulatory cooperation and support for multilateral rules.

As global commerce continues to depend heavily on maritime transportation, the ability to keep goods moving smoothly across oceans and borders will remain essential for economic growth, business confidence and consumer wellbeing worldwide.