January/February 2025 digital edition

A year of reckoning for global trade

An agreement between Israel and Hamas to pause fighting has raised hopes for the resumption of shipping services in the Red Sea. Houthi attacks on merchant ships had already forced a recalibration of shipping routes, with most multipurpose operators opting to bypass the region and the Suez Canal in favour of the longer route around the Cape of Good Hope. While the agreement to pause fighting marks significant progress, it does not necessarily signal an immediate or large-scale return of vessels to the Red Sea. Carriers remain cautious; assurances of safe passage for crews and ships in the long term will be paramount before confidence can return.

The extra tonne-miles presently sailed may not be ideal, but the market has at least remained stable. Should the truce hold and shipping resume, it could unlock much-needed capacity. However, for those negotiating contracts for 2025, the decision of whether to stick with the status quo or gamble on a potential decline in rates remains complex.

January 20 marked the conclusion of the Biden administration’s term in office, a period characterised by significant advancements in renewable energy and infrastructure. Under Joe Biden’s leadership, the US embarked on a full-scale transition to renewable energy, characterised by robust support for the offshore wind industry. The administration also earned high marks for prioritising renewal of transport and grid infrastructure, keeping the project logistics market operating at full capacity to meet these demands. Moreover, the US economy experienced notable growth during this period, though persistent inflation presented challenges that weighed heavily on the electorate.

With the Democrats exiting stage left, the inauguration of Donald Trump ushers in a new era – and with it, significant uncertainty. A wave of executive orders has the potential to dramatically reshape the US business environment – to the detriment of renewables but the benefit of oil and gas. 25 percent tariffs on goods from Mexico and Canada were imposed, then revoked at the 11^th hour, Mr Trump’s predictably unpredictable behaviour on full display.

Amid what research and business intelligence firm Rystad Energy calls “a shifting policy landscape”, the global energy sector faces a turbulent year ahead. Geopolitical tensions, the decarbonisation push, and policy changes across major economies will create a dynamic environment. For the heavy lift and project logistics sectors, 2025 promises to be a year of both opportunities and challenges. The key question is whether industry players can adapt quickly enough to thrive in the face of such unpredictability.

David Kershaw, editor, HLPFI