Tom Lister, the CEO of Global Ship Lease, discusses the impact of Trump's tariffs and the ongoing crises in the Middle East on global shipping.

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Tom Lister, CEO of Global Ship Lease, highlighted the economic pressures facing the global shipping industry, including the effects of tariffs, regulations, and geopolitical crises. He noted that while disruptions such as those in the Red Sea and Strait of Hormuz can increase costs and risks, they also drive up shipping prices, benefiting the industry economically if consumer demand remains steady.

Lister explained that insurance costs for shipping through high-risk areas like the Red Sea and Strait of Hormuz have seen significant fluctuations, with premiums sometimes tripling. These increased costs are ultimately passed on to consumers, reflecting the broader impact of global instability on shipping and trade.

Insurance costs for Strait of Hormuz 'all over the place'

I mean, we're in the midst of a massive economic experiment being sort of pushed ahead by the US, and it is a question of pure economics. People will price ships and build ships where it makes economic sense to do so, keeping everything in mind, be it tariffs, new regulations, etc, etc, etc. So to give you a sense, if you look at the fleet on the water today, and again, I'm talking about my sector container ships, roughly one in three ships are built in China. But if you look at the order book, which at the moment runs out to roughly 2029. So if you wanted to order a ship today, the earliest it would deliver is 2029. 70% is built in China. And it's not easy for the industry to sort of pivot geographically on a dime. Bigger and better, though, I mean, you know, looking the oil sector and the VLCCs, you know, there's the size of these ships, the size of the mass ships when I've been down in Rotterdam. Honestly, Tom, it's mind blowing being on one of these things as well. They're just getting bigger and bigger. Yeah. Absolutely. I mean, it just just a sort of a visual prop. If you were to stand one of these ships up on its stern, it would make the the Eiffel Tower and the Empire State Building look fairly modest. So you're right, they are vast pieces of kit. However, bigger is not always better, I would say. I mean, the really big ships that can carry roughly 24,000 containers, which is a staggering number, tend to be limited to the big east-west arterial trades. So, you know, China to the US, for example, or China to Europe. But they're not so good if you throw a curveball at the industry at being redeployed elsewhere. So there's also room for midsize and smaller container ships, which is actually where my company is focused. Yeah. MSC Arena, 400 meters long. Extraordinary. Tom, it's just crazy. MSC Loretta, same size as well. And they came online two years ago. Tom, the truth of the matter is, though, these crises, we talk about them as bad things. They're actually, dare I say, good news in many ways for the shipping industry, because, all right, there's a cost of increase when change of routes and what have you. But the fact of matter is the price increase you can get from global crises, I dare say geopolitical crises, I should say. You do benefit from it, don't you? I mean, it's not necessarily crisis turns up in Hormuz or the Red Sea or wherever it may be. That's a bad thing. It's actually, dare I say, a good thing for your industry, isn't it? I take a slightly tempered view, but essentially, you're right, Steve. Yes. I mean, as soon as you get disruption of any form, be it, you know, pandemic or a ship getting jammed in sewers or disruption to Red Sea transits, things become less efficient. And if things become less efficient, as long as consumer demand holds up, you need more ships to carry the same number of containers. So in that sense, I agree with you 100%. Now, at the same time, clearly, particularly when it comes to the Red Sea and the Straits of Hormuz, what's at the forefront of all of our minds is the safety of our people, of our seafarers aboard our ships. So it's not an unqualified good. Economic, great, but in terms of managing risk and keeping people safe, obviously, it becomes more challenging. Yeah. And just, I guess, the key point, you're in Athens, but of course, most of these have maritime insurance via London and elsewhere. My insurance costs have gone up massively because of your industry, I would suggest. They pass on the cost for autos, homes, everything, you name it, because their costs go up because of what's going on in the global situation. Have your insurance costs just gone through the roof? They have in certain areas. So, for example, insurance costs in the Red Sea, which is, frankly, a little bit academic, because we don't have any ships transiting the Red Sea. But if we were to transit, insurance costs have gone up by, I think, roughly 3x. So it's a three times multiple. And the insurance costs for the Straits of Hormuz are all over the place at the moment. So they spiked at around about 2 to 3x in mid-June, then they came back down to normal, and now they're climbing again. So you're right. I mean, that's a very good barometer of risk. And ultimately, I'm afraid these things always do flow through to the ultimate consumer. So to you, in that case.

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Kyiv

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Insurance costs for Strait of Hormuz 'all over the place'

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