German shipping companies warn a Trump presidency would hurt business

A potential re-election of Donald Trump as US president would pose challenges for the German shipping industry, according to a study by auditing firm PwC seen by dpa.

The study reveals that 78% of industry representatives expect negative consequences from a Trump presidency, while only 4% foresee positive outcomes. The survey included responses from 124 decision-makers in the shipping sector.

Concerns centre around the possibility of increased trade barriers and declining transport volumes under Trump's leadership.

The study also sheds light on the ongoing crisis in the Red Sea, where Iran-backed Houthi rebels in Yemen have been attacking merchant vessels with drones and missiles since late 2023.

Nearly all shipping companies surveyed have been avoiding the Red Sea during the study period from May to June, with only three out of 72 companies that typically navigate the route still operating in the region.

Most companies are now taking detours via the Cape of Good Hope, resulting in longer transit times and higher expenses, particularly for fuel. These longer routes require more vessels to meet demand, which reduces shipping capacity. However, higher freight rates, a direct result of these disruptions, have been advantageous for shipping companies.

According to the study, 81% of companies believe that prices would face downward pressure if Red Sea transport routes were operating smoothly. Additionally, 79% of respondents expect freight rates to rise or remain stable over the next year, an increase from last year's 67%.

The report shows that capacity utilization in the shipping industry remains strong. Currently, 86% of the surveyed shipping companies report having all their ships in service, a slight decrease from 93% last year.

The authors attribute this sustained high demand to a trade bottleneck caused by the coronavirus pandemic, which resulted in a backlog.

The study also examined the industry's efforts to meet climate targets. Three-quarters of the shipping companies surveyed have implemented measures to reduce pollutant emissions, marking a 4% increase from the previous year. Meanwhile, the proportion of companies that have no plans to reduce emissions also rose slightly, from 7% to 9%, though reasons for this trend were not provided.