Regulatory uncertainty raises costs and investment risk for shipping

The continued expansion of regulatory requirements is becoming one of the biggest sources of uncertainty for the global shipping industry, affecting not only vessel operations but also investment decisions, financing and the cost of capital.

At a time when the sector is being called upon to commit huge amounts of capital to fleet renewal, decarbonisation and the adoption of new technologies, shipowners and banks are facing an increasingly complex package of international, regional and national rules. This was the key message delivered by George Xiradakis, founder and CEO of XRTC Business Consultants Ltd and president of the Association of Banking and Financial Executives of Hellenic Shipping, at the 49th Annual Conference on Ocean Law and Maritime Policy, held in Athens.

Xiradakis noted that the concept of maritime security has broadened significantly and is no longer limited to traditional threats such as piracy, armed robbery or physical attacks on vessels.

It encompasses a broader range of risks linked to geopolitical instability, sanctions, cybersecurity, environmental requirements, financial transactions and contractual obligations towards charterers, insurers and financial institutions. Shipping companies must therefore comply simultaneously with International Maritime Organization conventions, regional regulations, national laws and different sanctions regimes.

“Compliance is no longer a distinct administrative function. It has become an integral part of shipping’s operational and financial architecture,” he said.

Particularly during periods of geopolitical crisis, decisions may need to change within hours. New sanctions, attacks on commercial vessels, changes to war-risk areas or restrictions involving cargoes and counterparties can directly affect route selection, access to ports, insurance coverage and financial transactions.

Investments with a 25-year horizon

Particular emphasis was placed on the investment uncertainty currently facing shipowners.

Shipping is being called upon to invest in new technologies and alternative fuels and to sharply reduce emissions, while it is still unclear which solutions will prevail in the long term or whether they will be available at the required scale.

As Xiradakis pointed out, shipowners are making decisions today on vessels that will operate for the next 20 to 25 years, without knowing with certainty which fuels, technologies and regulatory standards will become the norm over the coming decades. That uncertainty is being passed directly on to banks as well.

The transition dilemma

A key contradiction facing the industry was also highlighted: shipping needs unprecedented levels of investment for its green and technological transition, while regulatory and technological uncertainty may make access to the capital required more difficult and more expensive.

For this reason, Xiradakis argued that banks and shipowners need to act as partners in the compliance process.

Financial institutions need reliable and standardised information, while shipping companies need greater regulatory certainty and financing structures that take into account the long-term nature of investment in the sector.

He also highlighted the IMO’s role in ensuring clear and uniform international rules, warning that fragmentation of the regulatory framework across different regional systems increases operating costs and investment risk.

He stressed the need for closer coordination among the IMO, governments, financial institutions and the shipping industry, alongside realistic implementation periods and more harmonised requirements.

“A regulation that cannot be effectively implemented or sustainably financed may satisfy a legal requirement on paper, but it does not necessarily make shipping safer,” he said.

The central message was that the burden of the regulatory transition cannot be placed solely on shipowners and, above all, must not ultimately fall on seafarers. Compliance, safety and financing are now a shared responsibility across the entire shipping value chain.

Προτιμώμενη πηγή στην Google

Για να εμφανίζονται περισσότερα άρθρα της Ναυτεμπορικής στις αναζητήσεις σας εύκολα και γρήγορα, πρέπει να προσθέσετε το site στις προτιμώμενες πηγές σας. Μπορείτε να το κάνετε πηγαίνοντας εδώ.