Why does this matter? International shipping is a fundamental facet of the global economy and trading network, facilitating the international transfer of goods. Artificial waterways are a crucial component, cutting thousands of miles from sea routes.

The Suez Canal, for example, connects the Mediterranean to the Red Sea, saving 6,000 nautical miles and reducing delivery times by three to four weeks compared to routing around Africa.

Last year, 24,000 vessels passed through the Suez Canal, carrying 10% of global seaborne trade. Disruptions to this waterway are costly – the last time shippers faced an impassable Suez Canal was in 2021 when the Ever Given cargo ship ran aground, estimated to have held up $9.6bn worth of trade per day.

The impact of shipping remains high even in the absence of disruptions to routes, accounting for around 3% of global emissions – roughly equivalent to the aviation sector. Estimates suggest that shipping could represent 10% of global emissions by 2050 if current growth rates continue unabated. Shipping executives are reportedly cautious to restart operations in the Red Sea region, suggesting elevated shipping emissions are likely to continue for some time.

The shipping industry has taken steps to increase fuel economy and decrease emissions in recent years. For example, ships have followed a “slow steaming” policy over the last decade, which involves reducing operational speed, conserving fuel, and cutting emissions of CO2 and air pollutants.

However, shipping giants Møller-Maersk and Hapag-Lloyd have announced they are suspending this practice and increasing vessel speeds due to the additional time the alternative route enforces.

The shipping industry is likely to face increasing regulation in the coming years. In July 2023, the International Maritime Organization (IMO) announced stricter decarbonisation targets, including a goal of achieving net-zero emissions from international shipping “close to” 2050.

The body also established interim goals of reducing emissions by 20-30% by 2030 and 70-80% by 2040, compared to 2008 levels. The current geopolitical crisis in the Middle East poses a serious risk to these goals, sending the industry’s emissions in the wrong direction.

The Suez Canal is not the only major waterway facing significant reductions in traffic. Drought in Central America has severely impacted maritime trade passing through the Panama Canal, which links the Caribbean Sea with the Pacific Ocean.

Around 2.5% of seaborne trade passes through the canal, but due to a severe drought-induced reduction to the level of the Gatun Lake that feeds the waterway, the canal’s water levels are far lower than usual. Consequently, the Panama Canal Authority has reduced traffic through the corridor by approximately 40% this year.

Addressing this issue, SOFAR Ocean have deployed the world’s largest privately-owned network of ocean sensors. Each day, this network provides the company with over 1.5 million observations, populating marine weather models up to 50% more accurately than traditional models.

This is combined with vessel performance models – used to determine high-accuracy speed and fuel predictions – to create the powerful Wayfinder platform. This data-driven service reduces voyage time, fuel and emissions by 4-6% on average, presenting an attractive option for the maritime industry in the face of an escalating crisis.