News / Shippers need resilience as new regulations add to geopolitical pressures

Photo: Yaroslaf | Dreamstime.com

Geopolitical threats may loom large, but pending changes to reporting requirements related to environmental and labour practices have now become shippers’ key focus.

Politicians in Europe have been working together for several years to develop a framework for corporate sustainability and due diligence, prevention of forced labour and the prohibition of products that engender deforestation.

European Shippers Council secretary general Godfried Smit said: “Shippers have a lot on their plate, including these reporting requirements relating to sustainability.

He told The Loadstar managing the looming compliance issues would be a key priority for “many shippers”, with the EU Corporate Sustainability Reporting Directive (CSRD) and the carbon border adjustment mechanism (CBAM) particularly pressing.

Last year saw the phased implementation of CBAM begin with levies on specific carbon-intensive sectors: aluminium; cement; electricity; fertilisers; hydrogen; iron; and steel.

In 2026, when full implementation is targeted, it will level what the EU described as a “fair price on the carbon emitted during the production of carbon-intensive goods that are entering the EU, and to encourage cleaner industrial production in non-EU countries”.

The bloc’s new CSRD requirements essentially expand its non-financial reporting directives from 10,000 affected businesses to 50,000.

US shippers are expected to be particularly strained by CSRD, which requires firms shipping goods in and out of Europe to report not only their Scope 1 and 2 emissions, but also their value chain, or Scope 3, emissions.

Those who have spoken to The Loadstar have complained, not so much about being brought under the remit of new regulation, but persistent uncertainty surrounding it. Typifying this has been the lack of consensus surrounding due diligence and forced labour regulations, both having faced strong pushback from member states and only just meeting the deadline for agreement.

Amid all the practical changes, Mr Smit said geopolitical flashpoints and conflicts are always in the back of shippers’ minds and their economic ramifications.

He told The Loadstar: “There is always a risk in making predictions on the economic situation. The election in the US, the relations with China (and its potential invasion of Taiwan) could completely change the outlook.

“For now, I think it is fair to say that the economic outlook for the rest of the year will remain challenging, especially in Europe, although there are more hopeful signs for 2025.”

All of which, Mr Smit said, had led to rising costs in transport and wages, putting profitability under pressure, factors compounded by a lack of personnel.

“Resilience, as we’ve advocated to our members time and again, will be crucial not just to weather these crises, but to come out stronger on the other side.,”