22th Week Topic: Analysis of the Impact of the Maritime Autonomous Surface Ships Code (MASS Code) on the Shipping Industry

On May 21, 2026, at the London Maritime Safety Committee meeting, the International Maritime Organization (IMO) officially adopted the "Maritime Autonomous Surface Ships Safety Code" (MASS Code - the International Code of Safety for Maritime Autonomous Surface Ships). This code is expected to come into mandatory effect starting from 2028. After years of development, this code has established a unified framework for the design, construction, and operation of unmanned ships, requiring its safety standards to be consistent with those of traditional manned ships, thereby clearing the core regulatory obstacles for the large-scale commercial use of unmanned ships worldwide.

In the future development stage of intelligent shipping, it is analyzed and sorted based on the degree of automation and the commercialization process. The pilot verification period (2026 - 2028) sees the implementation and trial operation of the MASS rules, with remote control and reduced crew operation trials conducted on coastal and inland short-haul routes; ship-shore collaboration, intelligent perception, and collision avoidance systems gradually mature, and operational data and regulatory experience are accumulated. The scale promotion period (2028 - 2032) sees the full mandatory implementation of the MASS rules, with batch application of semi-automated ships in near-sea and feeder transportation; intelligent ports, intelligent waterways, and unmanned ships deeply collaborate, and business models and cost advantages emerge. The deep integration period (2032 - 2035+) sees the emergence of high-level unmanned ships on ocean routes, with AI unmanned decision-making and remote cluster control becoming the mainstream; a full-chain intelligent shipping system is formed, and unmanned ships and traditional ships operate together and collaborate on a regular basis.

What are the main impacts of unmanned ships on the shipping market? In terms of cost and efficiency, unmanned ships significantly reduce labor costs such as crew, shift scheduling, food and accommodation, optimize routes and speeds, and reduce fuel consumption by 5% to 10%. They break through the restrictions on crew rest time, enabling 24-hour continuous operation, significantly improving port turnover and navigation efficiency. In terms of safety and risks, unmanned ships reduce accidents caused by human errors such as collisions and grounding, and overall improve maritime safety levels. New types of risks such as cybersecurity, system redundancy, and remote emergency response have emerged, raising regulatory and technical thresholds. In terms of market structure and industry chain, unmanned ships will first be gradually implemented by leading shipping companies. Technology enterprises and classification societies will lead the standards and technologies, leading to an increase in industry concentration and putting smaller shipowners under pressure to transform. This will give rise to new sectors such as intelligent navigation systems, ship-shore communication, and AI operation and maintenance. The integration of shipbuilding, shipping, ports, and technology will be deepened. In terms of employment and compliance in the shipping industry, there will be fewer positions on ships, while the demand for onshore control, data operation, and cybersecurity positions will increase, and the skill structure of crew members will be restructured. Global unified regulation will be implemented, making ship certifications, insurance, and liability definitions clearer, and reducing compliance costs for cross-border operations. In terms of green and low-carbon aspects, the navigation of unmanned ships and the synergy of new energy sources (electricity, ammonia, hydrogen) will optimize routes and energy consumption, helping to achieve the carbon reduction goals of the shipping industry.

With the continuous advancement of communication and artificial intelligence, the market has witnessed the vigorous development of intelligent car driving. Therefore, the mature of unmanned ships should not be far behind.

23rd Week Topic: What Impact Does the Temporary Waiver of the Jones Act Have on Shipping?"

The Jones Act was officially implemented in 1920. It is a protective regulation for coastal shipping in the United States. For domestic water transportation within the country, only ships built in the United States, with more than 75% of the shares held by the US and crewed by US citizens, can undertake such transportation. The core purpose of this act is to protect the domestic shipbuilding industry in the US, the employment of local seafarers, and the reserve of war-time merchant shipping capacity. Due to the constraints of this act, the number of compliant domestic oil tankers in the US is scarce. The cost of local shipbuilding and manual operation in the US is much higher than that in the international market. As a result, the domestic shipping rates for domestic transportation have been consistently high, and a large amount of inland energy transportation in the US has been forced to shift to railways and highways.

Affected by the geopolitical conflicts in the Middle East, the disruption of shipping in the Strait of Hormuz, and the soaring energy prices across the United States, Trump issued a temporary exemption decree on March 17, 2026. The first batch of exemptions covered nearly 700 types of energy-related goods (crude oil, gasoline, aviation kerosene, asphalt, fertilizers, etc.). The initial exemption period was 60 days, and it was later extended to mid-August of the same year. During the exemption period, foreign non-compliant vessels could legally carry energy goods between domestic ports in the United States, and were no longer subject to restrictions based on American shipbuilding, American shipowners, or American crew members.

As of the beginning of May 2026, the U.S. Maritime Administration (MARAD) has recorded a total of 59 landing exemption voyages. International leading oil tanker companies such as Frontline, Scorpio Tankers, Hafnia, International Seaways, and Weco Tankers all have vessels landing on domestic U.S. routes. Among them, the Damingshan vessel (asphalt carrier) under the Southwest Shipping of China completed the asphalt transportation from Louisiana to Florida. The data shows that approximately 29% of the exemption voyages were carried out by vessels associated with China.

This exemption policy has had a positive impact on the US energy industry chain and the cargo owner sector. It has expanded the supply capacity of transportation, shortened the energy distribution cycle, and enabled a large number of foreign oil tankers to enter traditional domestic trade routes such as the Gulf of Mexico to the eastern coast of the US, the Gulf of Mexico to California, and Texas to Puerto Rico. This has broken the bottleneck of the domestic compliant shipping fleet in the US. Regions in the west and northeast of the US that previously relied on imports of refined oil from Europe and the US can now directly rely on local refineries in the Gulf of Mexico for fuel supply, optimizing the energy storage and transportation layout across the entire United States. The inland transportation costs in the US have decreased, the operating costs of foreign vessels are significantly lower than those of US compliant vessels, the shipping prices of refined oil have dropped, and the transportation costs for fuel across regions have decreased for refineries and petrochemical enterprises. The American Association of Fuel and Petrochemical Manufacturers (AFPM) has clearly expressed its support for the exemption, believing that the policy effectively improves the efficiency of oil circulation in the US and indirectly benefits the cost control of end consumers in terms of fuel usage.

For international shipping enterprises, it has opened up new profit-making routes. Global oil tankers, asphalt ships, and chemical ships have revitalized idle transportation capacity and have launched new domestic short-distance transportation services along the US coast. International oil companies (Gunvor, Phillips66, Citgo, Chevron) have prioritized renting global low-cost foreign fleets. Leading oil tanker companies have gained stable revenue from cargo sources. This US exemption policy has optimized global ship scheduling. International shipowners can flexibly allocate idle ocean-going vessels to undertake domestic short-distance transportation within the US, increasing the annual operating days and cargo space utilization of ships, and improving the revenue levels of global oil tanker owners.

The exemption policy of the United States has an impact on the global oil trade pattern. The radiation capacity of the refining and processing capacity in the Gulf of Mexico of the United States has been enhanced, the domestic circulation efficiency of crude oil and refined oil within the country has improved, reducing the United States' reliance on overseas refined oil imports, and the global cross-ocean trade flow of refined oil has slightly adjusted. The long-distance maritime transportation demand from the Middle East and Europe to the United States has temporarily contracted in a phased manner.

24th Week Topic: Strait of Hormuz Transit Toll

Recently, Evangelos Marinakis, the president of Capital Group, one of the largest members of the Greek Shipowners Association, proposed a controversial suggestion at a shipowners forum. Marinakis stated that if paying a certain fee could help reopen the Strait of Hormuz, then this form of "passage fee" might be a price worth paying. This statement immediately sparked extensive discussions and controversy within the industry.

From a legal perspective, according to Articles 37 to 44 of Part III of the United Nations Convention on the Law of the Sea (UNCLOS), straits used for international navigation are subject to the transit passage system. The core provisions include: All ships and aircraft have the right to transit passage, and such passage should not be obstructed; It is explicitly prohibited to levy tolls on foreign ships, and only fees can be charged for providing specific services.

UNCLOS strictly defines the jurisdictional scope of coastal states: The matters that can be regulated include navigation safety and traffic management, prevention of ship pollution, protection of fishery resources, customs / immigration / health quarantine; the prohibited matters include not being allowed to suspend the right of transit passage, not being allowed to charge fees for mere transit activities, and not being allowed to implement discriminatory treatment; the exceptions for charging include only being able to charge reasonable fees for actual services provided such as pilotage, VTS traffic management, and navigation aids.

The Strait of Hormuz fully complies with Article 37 of the UNCLOS regarding international straits: it has geographical features with the narrowest point being only 21 nautical miles, and it is entirely within the 12-nautical-mile territorial waters of both Iran and Oman; its functional positioning is to connect the Persian Gulf and the Arabian Sea, being the most important global energy transportation route, handling approximately 30% of global maritime oil trade; and its legal characterization is that the International Maritime Organization (IMO), the United Nations, and the vast majority of countries have clearly recognized it as an international navigation strait.

Iran's challenge to the transit passage system is based on two points: first, Iran has not ratified UNCLOS; second, Iran advocates applying a more restrictive transit passage regime, requiring ships to apply in advance and undergo supervision. However, the right of transit passage has become an international customary law, and even countries that have not ratified UNCLOS are bound by it.

Panama / The Suez Canal is an artificial excavation project that requires continuous huge maintenance costs. The toll is the service price. The Strait of Hormuz is a naturally formed public waterway. Iran has not made any artificial modifications and thus lacks the legal basis for charging.

Iran argues that the toll collection in the Strait of Hormuz is a negotiation strategy. They use the toll collection as a bargaining chip to force the US to lift sanctions and recognize its regional influence. The US stance is to refuse to recognize the toll collection rights and insist that Iran unconditionally open the strait. Middle countries seek a balance of interests, while declaring their commitment to maintaining freedom of navigation and avoiding direct confrontation with Iran.

Iran's idea of charging for vessel passage through the Strait of Hormuz lacks legal basis at the international law level and faces multiple fundamental obstacles in practical implementation, making it difficult to become a commonly recognized regular system by the international community. The "pay-to-access" proposal put forward by Greek shipowner Marinakis is merely a temporary measure under specific conflict circumstances and does not represent the legal feasibility or long-term sustainability of this charging claim.

25th Week Topic: US and Iran Sign Memorandum of Understanding

The US-Iran Memorandum of Understanding was remotely signed and came into effect from June 17, 2026 (US local time) to the early morning of June 18 (Tehran time). On June 20, the Iranian delegation arrived in Switzerland to meet with the US representatives to implement the Memorandum of Understanding and address the Iranian nuclear issue and the conflict in Lebanon.

The key shipping terms of this memorandum stipulate that the Strait of Hormuz will be fully open for navigation in the next 60 days, and ships will not be required to pay any tolls for passage. The US will lift all sanctions against Iran, and major shipping companies can directly launch shipping services between Iranian ports. The document clearly states that the termination of hostile actions against Lebanon will be a prerequisite for the continued effectiveness of the agreement. If Israel takes unilateral military action, this agreement may become invalid and the Strait may be blocked again.

According to the shipping data from HIFLEET, the number of ships passing through the Strait of Hormuz has slightly increased recently. Additionally, the process of clearing mines from the waterway is lengthy, which will hinder the rapid and comprehensive return to normalcy of the shipping market.

If the current US-Iran agreement can be successfully implemented, it will help ease the situation in the Red Sea crisis, and the shipping market is expected to fully resume the traditional routes through the Suez Canal. The Red Sea crisis has lasted for 941 days, while the Hormuz Strait crisis has lasted for 110 days.

There are a large number of oil tankers fully loaded with crude oil stranded in the Persian Gulf. After the strait is opened, the accumulated goods will be concentrated for export. Coupled with the strong demand for replenishment in the global manufacturing sector, the transportation demand for crude oil, refined oil products and LNG has temporarily increased, providing support for the freight prices of ocean transportation.

After the US completely lifted the sanctions, Iranian crude oil and petrochemical products could be exported normally, expanding the trading volume of energy in the Middle East. This has long supported the stability of oil transportation routes in the Gulf region. The geopolitical risk premium for international oil prices has diminished, and the cost of aviation fuel has dropped, further reducing the operating expenses of ships.

If the agreement is fully implemented, the Red Sea crisis will gradually ease. Shipping companies can abandon the Cape of Good Hope route and resume the main route through the Suez Canal, shortening transportation time, reducing fuel and additional charges, and significantly lowering the per-box transportation cost. This will alleviate the logistics pressure on foreign trade enterprises. Previously, on the Middle East route, additional charges for war risks and circumvention were commonly imposed. After the situation in the Strait and the Red Sea eased, various geopolitical premium charges were gradually cancelled, and the freight rate center trended downward moderately, enhancing the global trade activity.

Export restrictions on fertilizers, minerals and petrochemical raw materials in the Middle East have been lifted, and the demand for dry bulk and chemical cargo transportation has picked up. At the same time, the decline in oil prices has reduced the fuel costs for ships, and the profit margins of all types of shipping companies have been restored.

The insurance rates for naval warfare have dropped, resulting in a significant reduction in the premiums paid by shipowners. The long-term multilateral governance mechanism for the strait has been established, and the future navigation rules will be standardized, thereby reducing the risks of sudden shipping control measures.

The optimistic scenario is that Lebanon achieves a ceasefire, the US-Iran agreement is maintained, the countries along the Persian Gulf reach a unified management plan for the strait, and the waters of the Persian Gulf and the Red Sea remain stable for a long time; Iran's crude oil exports become regular, the Suez Canal fully resumes the main shipping routes between Asia and Europe, and the shipping market returns to its normal state by 2024.

The pessimistic scenario is that Israel launches military action, the agreement is terminated, the strait is once again restricted, shipping companies resume detours, and freight rates, insurance costs, and fuel costs all rebound again.

This Memorandum of Understanding between the United States and Iran represents a crucial turning point in alleviating the geopolitical crisis in the Middle East shipping sector. In the short term, it significantly reduces the operational costs of all types of shipping companies and releases the demand for energy transportation, benefiting the oil shipping, container shipping and port supporting industries. However, the physical security restoration of waterways is progressing slowly, the conflicts between Palestine and Israel as well as Lebanon, and piracy in the Gulf of Aden have not been eliminated yet. There is a significant time lag for the market to fully return to normalcy.

26th Week Topic: Panama Canal Transit Status

HIFLEET Shipping Big Data shows that as a knock-on effect of previous shipping disruptions in the Strait of Hormuz, the Panama Canal, a critical global shipping artery, suffered persistent congestion in early April and late May 2026. Some vessels have been forced to take much longer alternative routes amid shipping disruptions that have lingered for nearly two months. In early May and mid-June this year, the average anchoring waiting time for vessels reached as long as five days. Multiple overlapping factors—canal maintenance projects and the likely return of the El Niño climate phenomenon—will further extend vessel waiting times and compel shipping companies to switch routes.

Prior to the signing of the Memorandum of Understanding between the United States and Iran on June 18, tensions in the Middle East disrupted energy transport through the Strait of Hormuz. Surging Asian demand for U.S. oil and gas resources shifted market focus to the Panama Canal. Following the outbreak of Middle East conflicts, U.S. energy export volumes rose sharply, keeping canal traffic at full capacity. Per HIFLEET Shipping Big Data, the average daily number of vessels anchored near the canal stood at around 55 in the six months before the Middle East tensions flared; starting in March this year, this figure jumped to nearly 100, pushing the average anchoring waiting time up by 40%. In May 2026, the winning bid for a single priority canal transit slot exceeded USD 4 million, setting a new industry record.

Tanker traffic saw an especially notable surge. Between April and May 2026, an average of 300 oil tankers transited the canal monthly, a 50% year-on-year increase compared to the same period in 2025. Most of these vessels carried refined U.S. petroleum products to Asia and Australia. Very Large Crude Carriers (VLCCs) are unable to pass through the canal due to size constraints and mostly reroute around the Cape of Good Hope to ship U.S. crude oil. Meanwhile, the fleet of Very Large Gas Carriers (VLGCs) continues to expand, sparking fierce competition for transit slots, with monthly VLGC transits holding steady at roughly 100 vessels.

Severe congestion and delays at the canal have driven numerous large liquefied gas carriers to take lengthy detours, pushing shipping freight rates to all-time highs. Sustained growth in U.S. energy exports has strained canal capacity, and restricted transit at the waterway may trigger far-reaching negative impacts on global shipping.

Industry insiders predict a high probability of a renewed El Niño event, which will lower water levels in the canal’s lakes and disrupt normal canal operations. Combined with reduced capacity from maintenance works, vessel waiting times are expected to lengthen further, prompting more ships to opt for longer alternative voyages.

The Panama Canal Authority (ACP) released new regulations last week: effective July 1, 2026, the maximum allowable draft for vessels transiting the New Panamax locks will be reduced from 50 feet to 49.5 feet (15.09 meters). The authority stated the adjustment was formulated based on real-time and forecasted water level monitoring data of Gatun Lake for the coming weeks, as a routine water resource management measure that will not alter the canal’s total daily vessel transit volume.

To mitigate risks of water shortages, the Panama Canal Authority rolled out a series of water conservation and control measures starting December 2025 to prepare in advance for the 2026 dry season. It also forecasts that El Niño may occur from late 2026 through 2027, which could continuously strain lake water supplies, hence the authority has pre-established water storage and transit control contingency plans.

Shipping throughput at the Strait of Hormuz has recently recovered to 60% of its normal capacity. The Persian Gulf region will face a shortage of Very Large Ethane Carrier (VLEC) capacity, which will further buoy freight rates. Robust long-term energy transport demand will underpin shipping market performance. Should drought triggered by El Niño disrupt navigation at the Panama Canal, further upward pressure on shipping freight rates will emerge.

27th Week Topic: EU Fuel Oil Regulations Joint Compliance Pool

The first reporting period of the EU fuel regulations has officially completed. All shipowners have submitted compliance reports to the European Maritime Safety Agency (EMSA), and the industry's attention now turns to the next compliance period. 2025 is the first year after the implementation of this regulation when the carbon quota pooling mechanism (Pooling) is subject to real market testing. The full-year practice has verified that the compliance pool is a feasible and cost-effective compliance solution for the shipping industry, and it is also the mainstream choice in the shipping sector. However, whether this model can be efficiently implemented depends on the shipowners' early planning, the reliability of the partners' qualifications, and the mature operational practical capabilities.

This regulation applies to all vessels with a total tonnage of 5,000 tons or more that are berthing at EU ports, regardless of their nationality. Industry estimates show that among vessels with a carbon emission reduction deficit, over 90% have chosen the joint compliance pool solution, which is sufficient to prove that the market highly recognizes the practical value of this model. There is a widespread demand in the industry for flexible compliance tools.

By integrating ships with carbon surplus and those with carbon emission deficits, a commercial operation compliance pool has been created. This helps shipping companies meet the emission reduction requirements of the EU maritime fuel regulations at a low cost and with high efficiency.

Most shipowners may underestimate the operational complexity of the THETIS-MRV declaration system. Any error in the input will directly affect the compliance framework of the entire consolidated pool. The professional support team provides full assistance to customers throughout the declaration process, offering integrated compliance support covering the entire chain of EU maritime fuel regulations, which is increasingly attracting the reliance of shipowners.

More and more shipowners have realized that by pre-determining the joint compliance pool of carbon quotas, they no longer have to worry about entering or leaving the waters of the European Union. The carbon quota declaration process is smooth, there are ample choices, and the administrative burden is reduced. Analyzing the trend of the EU carbon quota market, the demand for quotas will surge as the deadline for compliance approaches, pushing up the price of quotas. Currently, the overall price of the current quotas is stable, but as the quotas in various pooling pools gradually reach saturation, a tightening of market supply will become an inevitable trend.

There is a significant disparity in the capabilities and operational safety standards of various joint compliance pool coordination services available on the market. Chinese shipowners are more inclined to use the consulting platforms based in the European Union.

The current EU maritime fuel regulations require a 2% reduction in the greenhouse gas intensity of ships throughout their entire lifecycle; the 2030 emission reduction target has been raised to 6%, and the emission standards continue to tighten, until the ultimate goal of reducing greenhouse gas intensity by 80% is achieved by 2050. The compliance pressure on shipping enterprises will increase year by year.

The first carbon quota implementation cycle has exposed three major problems: the operation of the reporting system is complex, enterprises that enter late face higher costs, and the transparency of the overall planning services in the market varies greatly. In the long term, the EU's maritime emission reduction standards will continue to increase. It is recommended that shipowners make early preparations, lock in high-quality long-term service providers, and alleviate the increasing compliance pressure through reliable and compliant pooling.

28th Week Topic: When Will Container Ships Return to the Red Sea?

Market Information on July 8th: Maersk Group and Hapag-Lloyd announced that one of their Gemini cooperation routes will resume operations on the Red Sea route through the Suez Canal. This move is the first step towards restoring the Asia-Europe container routes via the Red Sea shipping lane. The latest monitoring data from HIFLEET shipping big data shows that the number of container ships passing through the Red Sea route has shown a slow recovery trend, but the overall recovery pace is cautious and not obvious. The vast majority of large container ships still choose to bypass the Cape of Good Hope in Africa to avoid the safety risks in the Red Sea.

After the US and Iran signed the memorandum of understanding on June 18th, the market's panic over the escalation of conflicts in the Middle East and the attacks on ships in the Red Sea eased somewhat. The war insurance premiums slightly decreased, reducing the pressure on enterprises' transportation costs. However, the fragile ceasefire agreement was broken again on July 9th, and the resumption of traffic in the Strait of Hormuz became uncertain.

Taking a detour around the Cape of Good Hope will increase the voyage distance by 3,500 to 4,000 nautical miles, extend the transportation duration by 10 to 14 days, and simultaneously increase fuel consumption, vessel occupation, shipping schedule delays, and storage capital occupation costs. The Red Sea route can significantly shorten the delivery time and reduce the overall logistics costs, and is highly attractive for high-velocity goods such as fresh produce and e-commerce. Maersk and Hapag-Lloyd have partially resumed some of the Asia-Europe-Mediterranean trunk lines passing through Suez. CMA CGM and MSC have also conducted small-scale trial voyages. Small shipping companies will adjust their route strategies in accordance with the safety operation data and risk models of leading enterprises.

The resumption of the Red Sea route will shorten the round-trip cycle for individual vessels. Under the same fleet size, the global effective container transportation capacity is expected to increase by 7% to 9%. However, as airlines gradually resume operations and release the incremental capacity, there will be no sudden surge in short-term transportation capacity that would impact the market. In the medium and long term, the benchmark freight rates for the Asia-Europe routes are under pressure and are expected to decline. The additional charges for detouring, war risk insurance, and congestion are gradually reduced. The comprehensive freight rate for 40-foot containers has dropped by 15% to 30% compared to the peak during the crisis.

The Red Sea Express Line passing through Suez retains a small premium for time, while the Cape of Good Hope Slow Line focuses on low prices and large volumes. The price gap between these two routes has persisted for a long time, replacing the previous unified high-price market pattern. The fluctuation range of freight rates has narrowed: there is an additional alternative route for the shipping lanes, the risk of freight rate spikes caused by geopolitical conflicts has decreased, and the stability of current freight rates has improved.

Traders along the Mediterranean coast of Europe prefer the Red Sea route. In contrast, large-scale goods from Northern and Western Europe still favor the low-cost Cape of Good Hope route. The regional trade logistics routes have become differentiated. All airlines have established "dual-route contingency plans", simultaneously preparing two operation schemes: one for Red Sea passage and the other for detour via the Cape of Good Hope. Geopolitical risks have been incorporated into the long-term route planning. The Suez route has a shorter voyage, lower fuel consumption, and less carbon emissions. It is in line with the EU's carbon tax policy. In the long run, it will further encourage airlines to prioritize the Red Sea route under the premise of safety and controllability.

If the US-Iran agreement collapses and the Houthi rebels resume large-scale attacks on ships in the Red Sea, the market will quickly reverse. Container ships will once again collectively take a detour around the Cape of Good Hope. Capacity will shrink and freight rates will soar again. Port congestion and supply chain delays will recur. The short-term impact will completely offset all the positive effects brought about by the recovery of shipping routes.