How Geopolitical Events Disrupt the Charter Market – And What You Can Do About It

My name is Davide Ramponi, I am 20 years old and currently training as a shipping agent in Hamburg. In my blog, I take you with me on my journey into the exciting world of shipping. I share my knowledge, my experiences, and my progress on the way to becoming an expert in the field of Sale and Purchase – the trade with ships.

In the shipping industry, we like numbers. Rates, cargo volumes, tonnage supply, bunker prices—they help us plan and forecast. But there’s one factor we can’t quantify so easily, yet it regularly turns the market on its head: geopolitics.

From armed conflicts and trade wars to pandemics and sanctions, geopolitical events can disrupt charter markets overnight. Routes are blocked, cargoes get rerouted, insurance premiums skyrocket, and charter rates swing unpredictably.

In this post, I want to explore:

• How geopolitical events influence charter rates and vessel availability

• The specific impact of COVID-19 on the global chartering landscape

• How to account for geopolitical risk in contracts

• Practical strategies to adapt to shifting political realities

• And what past events can teach us about future-proofing our deals

If you work in chartering, you can’t afford to ignore the geopolitical layer. Let’s take a closer look.

When Politics Meet Ports: How Geopolitical Events Shake the Market

At its core, shipping is a global industry. That means it’s uniquely exposed to political decisions made thousands of miles away from your office.

Here are the main geopolitical disruptors to watch out for:

1. Armed Conflicts

War zones don’t just affect the countries involved—they often reshape entire regional trade flows.

• Ports may be closed or operate at reduced capacity

• Maritime routes may become too risky or prohibitively expensive to insure

• Cargoes are diverted, which affects tonnage distribution and rate dynamics

Example: The ongoing conflict in the Red Sea region has led to the rerouting of dozens of container ships and bulkers via the Cape of Good Hope, drastically increasing voyage times and tightening vessel supply.

2. Trade Wars

Tariffs, countermeasures, and embargoes can shift demand and cargo flows almost instantly.

• US-China tensions altered grain, coal, and soy routes

• European sanctions on Russian oil forced tankers to reroute or seek new cargoes

• Supply chains were forced to diversify, creating new charter opportunities (and new risks)

Effect: Trade wars don’t just affect volumes—they shift where and how those volumes move.

3. Sanctions and Blacklists

When governments impose sanctions on specific countries, companies, or even vessels, it adds a legal and operational minefield.

• Vessels risk being detained or banned from key ports

• Insurance cover may be withdrawn

• Charterers and owners can face fines for accidental violations

Case in point: Tankers carrying sanctioned Iranian or Venezuelan crude faced significant operational and reputational risk—even when chartered indirectly.

The COVID-19 Shock: A Global Case Study in Charter Disruption

If there’s one event that tested the global shipping industry’s resilience, it was COVID-19. The pandemic disrupted not only health systems and economies but also crew changes, port operations, and cargo flows.

Here’s how it hit the charter market:

1. Port Delays and Congestion

• Lockdowns and health protocols caused massive slowdowns

• Charterers faced extended waiting times, triggering demurrage claims

• Owners had to absorb unexpected delays, increasing their operational risk

2. Rate Volatility

• Dry bulk rates initially collapsed due to a drop in demand

• Later, surging demand for containerized goods sent rates soaring

• Tanker rates experienced wild fluctuations as oil producers fought over storage and logistics

3. Crew Change Crisis

• Travel restrictions left crews stranded

• MLC (Maritime Labour Convention) compliance became complicated

• Owners had to pay premiums to find ships with “fresh” crews

Lesson: Even a non-political event like a pandemic can create political-style disruptions with lasting commercial impact.

How to Factor Geopolitical Risk into Charter Contracts

When drafting or reviewing charter parties, geopolitical risks can’t be ignored. Here are ways to build contractual resilience:

1. Force Majeure Clauses

• Define what counts as a “force majeure” (war, pandemic, port closure)

• Be specific and updated—COVID-19 taught us that pandemics need clearer language

2. War Risk Clauses

• Typically included in standard BIMCO contracts

• Allow for route changes or contract cancellation in war-affected zones

• Make sure P&I and hull insurance aligns with charter terms

3. Sanctions Clauses

• Confirm that charterers and owners are both not on sanction lists

• Require due diligence on cargo origin/destination

• Allow owners to refuse orders that breach sanctions—even indirectly

4. Safe Port Wording

• “Always accessible” vs. “reachable without undue delay”

• Clarify liability if the nominated port becomes unsafe after nomination

Pro Tip: Work closely with maritime legal counsel when negotiating high-risk trades or regions. Clarity upfront can save millions later.

Strategies to Adapt to Rapid Geopolitical Changes

In a volatile world, being reactive isn’t enough. Charterers and owners need proactive playbooks to stay competitive.

1. Scenario Planning

Run models based on:

• Port closures

• Route changes

• Fuel cost increases (due to sanctions or war rerouting)

Use these models to make faster, more confident decisions when real crises hit.

2. Flexible Chartering Terms

Avoid overly rigid fixtures in high-risk zones. Consider:

• Shorter charter durations

• Optional loading/discharge ports

• Floating hire clauses linked to changing fuel or war risk premiums

3. Stay Informed

Subscribe to:

• Geopolitical risk alerts

• Shipping intelligence platforms (e.g., Lloyd’s List, Tradewinds, Clarksons)

• Maritime law briefings for sanctions and war zone updates

Knowledge isn’t just power—it’s profitability.

4. Diversify Your Risk

Avoid concentrating your fleet or cargo commitments in one region. The more geographically balanced your portfolio, the better you’ll weather disruption.

Lessons from the Past: What History Teaches Us

Shipping is no stranger to geopolitical turbulence. Here are a few examples that still hold lessons today:

📌 The Suez Crisis (1956)

The closure of the Suez Canal forced tankers to reroute around the Cape of Good Hope. The impact?

• Voyage distances increased dramatically

• Charter rates for large tankers spiked due to tonnage shortage

• A new awareness of chokepoint risk was born

📌 The Gulf War (1990–91)

Maritime trade near the Persian Gulf became dangerous. Tankers faced threats from mines and missiles. War risk premiums surged, and some charters were abandoned altogether.

📌 Russia-Ukraine Conflict (2022–ongoing)

The war reshaped European energy flows, sanctioned hundreds of vessels, and forced shipowners to reroute or withdraw from specific trades. Grain exports from Ukraine plummeted, driving volatility in Supramax and Handysize markets.

Takeaway: Every crisis creates both risks and opportunities. Those who adapt quickly tend to outperform.

Conclusion: Turning Uncertainty into Strategy

Geopolitical events can’t be avoided—but they can be understood, anticipated, and managed. The more you integrate geopolitical awareness into your chartering strategy, the more resilient—and profitable—you become.

Let’s recap:

• Wars, sanctions, and trade disputes reshape charter rates and tonnage flows

• COVID-19 showed how global events can paralyze even the most established systems

• Contracts must include clear clauses to manage political and legal risks

• Staying informed and adapting fast is key to staying ahead

• Historical events offer a playbook—if we’re willing to learn from them

Shipping has always been at the mercy of geopolitics. But with the right strategies and insights, we can turn instability into opportunity.

How have geopolitical events affected your chartering work? Have you ever had to reroute or re-negotiate a deal due to political risk?

Share your experiences in the comments—I look forward to the exchange!

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