Published by Splash247

Shipping companies must shift from static to adaptive decision-making as markets become increasingly volatile, with AI-driven voyage intelligence and human expertise emerging as key enablers for commercial optimisation, according to StormGeo.

Higher bunker prices, trade-route disruptions, and soaring freight rates have highlighted how geopolitical shocks can drastically affect operational planning. The impact of the war in the Middle East on global shipping has underscored the importance of navigating market volatility to optimise the commercial efficiency of voyages.

“Operators have to expect the unexpected and be agile in their thinking. In an environment of fuel price fluctuations, freight market swings, operational disruption and rising emissions costs, voyage planning can no longer remain static. Operational decisions – from routing and speed to arrival timing – must increasingly respond to constantly changing economic conditions, in the same way that shipping must adapt to more extreme weather patterns caused by climate change,” said Rolf Reksten, StormGeo’s commercial lead for routing.

Shipping markets have always experienced cycles, but these are becoming more frequent and volatile, driven by geopolitical effects, macroeconomic factors, energy market shifts, supply-and-demand dynamics, evolving regulations, and critical stockpiles in key countries.

“Rather than sailing smoothly from the Persian Gulf to India or China with crude, you may have to pick up the cargo from West Africa, Brazil or the US Gulf. Voyages are longer, the need for optimisation is greater, and you have to relate execution much more to market volatility than before,” Reksten stated.

Fuel is the largest cost variable of a voyage, and bunker price hikes can significantly affect profitability without consideration of the wider commercial picture. The recent Strait of Hormuz crisis, which fuelled higher tanker rates and a spike in bunker prices, is estimated by lobby group Transport & Environment to have cost shipping companies an additional €340m ($395m) a day in fossil fuel bills.

“If you don’t have an eye on the markets and you’re purely focused on the route, this can undermine the commercial outcome of the voyage. You may need to reassess during the voyage whether to adjust speed, ETA or bunker strategy to execute in the most optimal way in relation to your commercial goals,” Reksten added.

The need for a more dynamic approach is driving the adoption of AI-driven voyage intelligence, which integrates real-time data on ocean and weather conditions, vessel performance, market insights, and emissions monitoring to deliver predictive analytics informed by human expertise.

“Profitability is the ultimate driver of decisions in shipping – and this is strongly impacted by market volatility. But companies able to quickly respond to changing conditions can turn volatility into a competitive advantage,” Reksten concluded.