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The global shipping industry moves around 80 percent of world trade, but it is now sailing through the dangerous waters of global power politics. How is geopolitics reshaping global shipping, and what does that mean for trade, prices, and economic security in 2026? On this episode of #ConsiderThis Melisa Idris speaks with maritime analyst Nazery Khalid, who is an Adjunct Professor at Universiti Malaysia Terengganu and Taylor's University.
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00:00Music
00:00Hello and good evening. I'm Melissa Idris. Welcome to Consider This.
00:15This is the show where we want you to consider and then reconsider what you know of the news of the day.
00:19The global shipping industry moves around 80% of world trade,
00:23but it's now sailing through the dangerous waters of global political power.
00:30Now, is geopolitics shaping or reshaping global shipping?
00:35And what does it mean for trade, for prices and for economic security in 2026?
00:43Joining me on the show to discuss all of this is Nazri Khalid, who is a maritime analyst.
00:48He's also an adjunct professor at University Malaysia Trung Kano and Taylor's University.
00:52Nazri, welcome to the show. It's good to have you on.
00:55It's been many years since we last had you on the show.
00:58So, COVID was the last time during COVID.
01:01And I think that was one major period where the shipping industry was so disrupted.
01:09Indeed.
01:09And now we're back to another key or pivotal point or flashpoint, if I may use that, for the global shipping industry.
01:16Before we continue our conversation into what the current industry is like, I'm hoping we can look back the past year.
01:27Sure.
01:28When you think back about the past year, Nazri, what has actually changed for global shipping?
01:33And I do wonder what developments that happened last year might still impact risks and opportunities of 2026.
01:43All right. Okay. First and foremost, Mel, thank you for having me back on the show.
01:47It's surely great to be back. I think it was during COVID, as you rightly pointed out.
01:51And not in person, right?
01:53Yeah. It was exactly on World Seafarers Day that we had that conversation about the plight of seafarers.
02:00And obviously, some time has passed. That was a time of really tough times for the maritime industry at that particular point in time,
02:09when global trade was nearly paralyzed.
02:13And when during the movement control order and lockdowns around the world that stopped industries and business activities in their tracks,
02:22and also sharply reduced consumer demand for a lot of goods, and that obviously had a very significant impact on the maritime industry,
02:32whereby a lot of shipping companies suffered huge losses, ports, you know, a lot of cargoes were stuck at ports,
02:40and a lot of bottlenecks formed along supply chains, which actually took quite a number of years for them to be cleared.
02:47And the maritime industry is actually mirroring the changes which are occurring in the world.
02:56And it is actually going through a very profound period at the moment, which is underpinned by regulatory aspects,
03:08greater focus on ESG sustainability, ships getting bigger,
03:13and world trade growing from year after year, which demands ports, shipping companies to extend capacity,
03:22and also players along the supply chain to become efficient, to invest in scalable infrastructures,
03:29to put in the manpower, and so on.
03:30And also, to a certain extent, to a high degree of significance, also powered by the application of AI and also Industry 4.0.
03:40So all of those things had been kind of brewing and bubbling, and then now we're seeing the effects of it.
03:47One of the things you said really struck me.
03:49You said the shipping industry mirrors the changes the world is going through.
03:54And that's, I think, quite a profound statement to say.
03:58It's absolutely true, because I am quite curious to see just how exposed the shipping industry is
04:05to geopolitical conflict, to a reordering of the global order.
04:11Talk to me about the events of last year, from the Black Sea to the Straits of Hormuz.
04:18What did that reveal to you about how exposed the global shipping industry is?
04:23And what does it do to global trade flows?
04:26I don't use the word profound very loosely, so when I use it, you know I'm in business, right?
04:32And again, as I mentioned, we are at the throes of really huge changes,
04:37which are driven by geopolitics and also conflicts, wars, reconfiguration of supply chains,
04:44emergence of China as one of the leading superpowers,
04:47trade tariff wars, which are, you know, resulting in a lot of snowball effects
04:55affecting production, consumption, distribution of goods and so on.
05:00So with the Trump 2.0 administration introducing tariff wars,
05:06have sort of like recalibrating the established order of global production
05:12and also distribution of goods.
05:14whereby China recently announced the establishment of Hainan as a free port,
05:22which really is showing its growing confidence and clout as a global economic superpower
05:28and also to capitalize on the MAGA thing about looking inwards.
05:36Now, only two days ago we were shocked by U.S. announcing that they're pulling out
05:41from all, maybe about 60-something world institutions and organizations.
05:46So this really is going to have a very significant impact on a lot of things, including economy.
05:52And as to what you mentioned about the situation with the Ukraine and Russian war
05:58and also the conflict in the Middle East, which spilled over to the Straits of Hormuz,
06:03whereby some commercial ships were attacked by Houthi rebels,
06:07which are believed to be backed by certain other powers,
06:10of course had a significant impact on the flow of goods
06:12and also posed serious threats to the lives of seafarers and also SSO.
06:17That has resulted in some shipping companies having to reroute their shipping voyages
06:23around the Cape of Good Hope in the southern tip of Africa instead of the usual.
06:28So that makes it longer.
06:29Makes it longer, it adds to their telecasts and also there was a spillover effect to consumers.
06:36Well, okay, that's actually, my question would be then,
06:41when those types of flashpoints happen, when there are chokepoints at the Straits of Hormuz,
06:46for instance, or the Black Sea becomes unstable, who pays the price, who bears the cost?
06:54Is it the ship owners, is it the insurance industries, is it consumers, is it governments?
06:59That's a good basic question which needs to be demystified.
07:02I think from an economic standpoint, there's a little bit of economic 101 here.
07:07Demand for shipping service is what is known in economic terms as derived demand.
07:12The demand for shipping services is not directly for the ship,
07:17but for the services they perform and for the cargoes they carry.
07:20So the greater the demand for the cargoes they carry, including containerized cargoes,
07:25bulk cargoes, oil and gas, and other commodities,
07:29it will be reflected in the freight rate,
07:33which is the cost imposed by shipping lines or ship owners on the cargo that they carry.
07:39So obviously when they have to reroute and take a longer route to get to their final destination,
07:45from the port of origin to port of destination,
07:47they will have to burn more fuel, so they can add to the cost.
07:50They may have to stop at more ports, which will incur them a lot of costs.
07:55So inevitably, they will have to pass this cost down to consumers.
07:58So at the end of it, the consumers, the end users of the products that they carry,
08:02have to bear the brunt of it.
08:04So that is something obviously which affects all of us.
08:08So are the, I'm assuming, higher insurance premiums, the inefficiencies,
08:14the longer routes, are all of that now the new normal for the shipping industry?
08:19Is that just what we have to deal with going forward?
08:22Well, yeah, obviously certain routes which are considered as wall-risk zones,
08:28ship owners will have to incur higher costs by going through these routes,
08:34because they will have to pay a higher premium for that to protect the car routes.
08:40Can I just ask you, who determines shipping routes?
08:43And are shipping routes being determined by commercial logic or by geopolitical or security calculations?
08:52I do wonder, how are shipping routes determined?
08:55Well, first and foremost, what you mentioned about economic logic and exactly how the flow moves.
09:01Ships are basically, as I mentioned to you, servants of global trade.
09:05So they go to where the cargo is and where the cargo originates.
09:08The purpose is to pick up cargo and to send cargo.
09:12So from ports of destination where there's a lot of cargos happening.
09:15For example, in the case of Malaysia, we have a very prolific amount of cargo coming,
09:21for example, from Klang Valley.
09:23Do we have a lot of cargo?
09:25Yeah, I mean, the fact that Port Klang is already ranked 10th as the busiest container ports
09:31by way of throughput handle, which is around 14 million last year.
09:3514.6 million.
09:36And PTP, Pelabuhan Tanjung Pelapas, in my home state of Johor,
09:40is also, I think, ranked around 14th place and is poised to crack into the list of top 10 busiest ports.
09:49So last year alone, about 1 billion TEU, or 20-foot equivalent units of containers,
09:55were being shipped around the world.
09:57And I mean, just try to wrap your head around the magnitude of 1 billion containers
10:01being carried by hundreds and thousands of ships around the world.
10:04China alone accounts about half of the year, 1 billion.
10:09Shanghai POP, which is the world's biggest port, handles about 60 million TEUs.
10:14So they go to ships will determine, shipping voyages will be determined by where the cargos are
10:22in terms of domestic cargo coming in to be exported to their markets and also transshipment cargo.
10:28In the case of PTP, which handles about 95% transshipment, especially intra-ASEAN containers,
10:35the cargoes are basically coming from other parts of the world to be put on smaller ships
10:41and then to be distributed to so-called...
10:44So there is a system called hub and spokes, which is quite fascinating, but needs to be demystified.
10:51So I'm imagining a wheel, right?
10:53Wheel of a bicycle.
10:54Our grandfathers rarely a bicycle, exactly like that.
10:58So you've got the hub port in the middle, the Shanghai port of the world, the Singapore port,
11:02the Hong Kong, Busan ports, and big ships will call at these ports because they need to,
11:09number one, big ships only call at big ports with deep draft and adequate facilities such
11:17as cranes and logistic support and so on.
11:20And then from then on, they will transship the cargo into smaller ships to be distributed
11:25to smaller ports in the region.
11:27Actually, much like airline, I think that's a concept which is more familiar.
11:31You fly to, you fly, you know, a big plane to a major port and then from, for example,
11:37from here to, for the sake of discussion, maybe Dubai or London.
11:42And from there, you fly to other smaller ports where there are no direct services from KLA.
11:46Connecting flights, right.
11:47Connecting flights.
11:48So that, when you look at the importance of, so you're talking about the kind of circle
11:53of global trade, right, the endless cycle of global trade and where shipping comes into it.
11:58When you look at what's happening in geopolitics today, when you see how global powers are jostling
12:04for certain areas, certain countries, how much of that, when you read the news, how much do you think
12:11this is related to shipping and shipping routes?
12:15Well, as the idea goes, no shipping, no shopping.
12:19Shipping really is a reflection of, and see how important shipping is, it's everywhere.
12:26There's ship in friendship, there's ship in relationship.
12:30There's also ship in hardship, by the way.
12:32So you can see, you know, the thing about shipping is that people only think about shipping
12:36when something disrupts it.
12:38It's much like when you only think about oxygen and breathing when you're stuck in an elevator
12:42and all of a sudden you have a feeling of being claustrophobic and you feel like, you
12:46know, it is disrupting you.
12:48But most days, you know, day in, day out, this is where you need to take your hat off
12:52to the people who sacrifice and also dedicate and committed in their profession to work
12:59on board ships and carry ships and also people who work at ports and along the logistics supply
13:03chain to facilitate that.
13:05And obviously, you know, in terms of what I mentioned earlier, go back to what I mentioned
13:09earlier about shipping being a mirror of world development because it is, like I said, a servant
13:17of global trade.
13:18If you can just wrap your head around that, it's quite easy for you to connect the dots.
13:22You would think that there is a lot of separating dots between shipping and world affairs, but
13:28actually, they are very closely intertwined because whatever happens, for example, in
13:32Warpath, because of the interconnectedness of a global economy, thanks to globalization
13:37globalization and also how closely related ports are, you know, whatever happens in
13:41one part of the world will definitely have a domino effect on the others.
13:46So things like tariff wall, for example, you know, now countries are imposing a protectionist
13:53policy.
13:54Ports are denying certain types of ships from coming in due to, you know, port state control
14:00or maybe because of admission rules and also designation of some countries as problematic
14:06countries, high-risk cargo come in.
14:08So all this certainly will have an effect down the supply chain.
14:13You mentioned something quite important there about the people who, the professionals who
14:19actually work on these vessels, right?
14:22We talk a lot about ships.
14:24We talk a lot about infrastructure and ports.
14:25But actually, there are a whole host of people who operate vessels and machinery and provisioning
14:33for these ships, the seafarers.
14:35So let's talk a little bit about them.
14:37What is it like?
14:39What is life like for seafarers today, particularly in this world of conflict and longer routes and
14:47tighter security?
14:48Well, I've never been on ship myself.
14:50Maybe I'm a little bit of a sea...
14:51You don't have good sea legs.
14:54But I can vouch for the fact that, you know, seafarers, you know, if it was up to me,
14:59I would nominate them for Nobel Peace Prize.
15:02I mean, they cannot be applauded enough for their invisible but pivotal role in facilitating
15:09a global trade.
15:10So I mentioned earlier, no shipping, no shopping, right?
15:13And the fact that it is already a very hard environment.
15:15Is it a hard life?
15:16I mean, if you think working in an office is tough, try to work in a big, you know, metal
15:22that floats around and also subject to all kinds of, you know, temperamental nature,
15:28high waves and also bad weather and so on.
15:30And the job that they have to do on board a ship is not exactly, you know, a walk in
15:34the park.
15:35And then there is an increasing pressure on them to sail longer.
15:40Some are being denied shore, leave.
15:43Some do not have adequate rest.
15:46There is even cases of bullying on ships and also poor compensation, salary being paid late
15:54and those kind of things.
15:55So, you know, we always talk about, you know, how impressive and how big vessels are becoming,
16:01how complicated and how sophisticated they have become.
16:04But, you know, little thought is given to the plight of the seafarers.
16:09So, I mean, of course, you know, we have to hand it to associations and also governments
16:16who are putting some attention, focusing on attention on their plight.
16:21But I think more needs to be done.
16:23There's also issues such as criminalization of seafarers.
16:27There's one very famous case involving two captains from India who were manning a ship
16:34and collided with a ship in South Korea.
16:37And they were tried in Korean courts.
16:39And apparently, again, it's not to say anything bad about South Korea.
16:42But the long and short way they went to jail and there was a big hue and cry about how unfair
16:47the trial was because the ship that they hit was anchored in the middle of a busy route along
16:57a river.
16:58And obviously, and the ship, you know, belonged to a table, which is a very powerful Korean
17:04company.
17:05Right.
17:05So is this an industry?
17:07So seafarers, is it an industry where there is concern that there could be a manpower crunch?
17:14Is this an industry where talent and supply of talent is in short supply?
17:23It is.
17:23Because, you know, obviously, being a seafarer is not regarded by youths as a very sexy and
17:31a very attractive career prospect.
17:33Is it not a young...
17:33I mean, just look around.
17:37I mean, people who are the school leavers would, you know, would rather, you know, quickly join
17:42to become a cabin crew member in airlines rather than go on board of a ship.
17:48And if you tell your parents you're going to go work on board ship, you know, they would
17:52probably just roll their eyes and say, you're out of your mind.
17:55Right.
17:55So it doesn't have that kind of, I would say, attraction or like I said, the attraction is
18:04not quite there, but for...
18:06And it is actually not a coincidence that many of the world's seafarers come from rather
18:11underdeveloped economy.
18:12And this is not to say bad things about countries which supply most of the seafarers of the
18:17world, like Philippines, Ukraine, Myanmar, Indonesia and so on.
18:23But just look at the names of this country I just mentioned and you can see what they
18:27have in common.
18:28They are countries in which, you know, wages are low, maybe less developed countries, which
18:35brings up the concern of whether seafarers are sufficiently protected, right?
18:40Whether they're being exploited.
18:42And that are some of the issues that you raised.
18:45I also wanted to talk to you about another threat and the threat that kind of looms over
18:50us in an age of technology and AI.
18:53When ships are becoming more important and more connected, they might also become more
18:59vulnerable.
19:00Talk to me about cyber threats.
19:01Oh, I see.
19:02And how serious is that in the shipping industry right now?
19:05Are we talking about just nuisance attacks or could these threats be real jeopardy, could
19:13shut down ports, could really disrupt supply chains?
19:15Yeah, that and much more, Mel, as we all know that the advent of Industry 4.0 with all the
19:23technologies such as blockchain, you know, AI and so on, making things more interconnected
19:31and ships are getting, there's even a concept called digital ships whereby, you know, ships
19:37are no longer obviously using the so-called traditional brick and mortar ways of navigation
19:43but everything is satellite-based, AI-based, reams and reams of data which are all, you
19:48know, parked in cyberspace.
19:50So obviously, given the increasing immersion and adoption of digitalization in the maritime
19:57industry and the fact that every party along the supply chain are interconnected shows that
20:03there is also a greater exposure to cyber threats.
20:06Digital ships, so are ships still manned?
20:09Some, yes.
20:10Could they be autonomous?
20:13They are already testing some autonomous ships as a matter of fact.
20:16So this is something which to me is almost inevitable but there's a lot of hurdles that
20:23need to be cleared.
20:24For example, insurance in terms of risk management, who will be responsible for the liability part
20:30of it in case something goes wrong.
20:32In terms of security of a ship, an autonomous ship would be hijacked but who's going to be
20:38responsible for security and so on.
20:40So all these things are actually being hotly debated in the industry but just like when
20:47the first autonomous cars appeared.
20:50A lot of issues, yeah.
20:51A lot of, yeah, exactly.
20:52A lot of fear of the unknown.
20:54So once I think they have developed technology which is secured enough and also can allay all
21:00the fears, especially from the insurance perspective, I think it's all systems go.
21:04I mean, there's no turning the tide on AI in autonomous vehicles.
21:08I like that, that point.
21:10Let's circle back to Malaysia.
21:12So we've circled the globe essentially with global shipping.
21:16Let's come back closer to home.
21:17When you think about Malaysia and Malaysia's port capacity and what we're doing here,
21:23how would you describe our capacity to compete?
21:30You said we're in the top 10 busiest ports, right?
21:33What are we trying to achieve with our shipping goals?
21:36Okay, so as you know, Malaysia is a trade-dependent country.
21:40I mean, we are really punching above our weight as a trading country.
21:45For a country our size, it's quite remarkable that we've always been consistently rated rank
21:50in the top 20 most active trading nations.
21:54And not only in terms of commodities but also manufactured goods and so on.
21:59And our trade has exceeded for a couple of years now above RM1 trillion.
22:03And as you know, a huge number of containers being processed through our ports
22:08and our ports continue to break records in terms of the containers handle and so on.
22:14And this will continue as our economy grows.
22:18And again, bearing major incidents such as COVID,
22:22the numbers will be projected to grow bigger and bigger.
22:28And this calls for extra capacity in our ports.
22:31And only last year, Prime Minister announced that he would like to see the year speeding up
22:37the third port in Port Klang in Palaukari to complement the two existing terminals at Port Klang,
22:43namely West Port and North Port, in order to support greater trade.
22:47And also during the time of the election in Sabah,
22:52he also launched together with the Yangtuan Agong,
22:55a Maharani free port energy, free port in Moa,
22:58to capitalize on oil tankers traversing through the Straits of Malacca.
23:04So this all points towards a greater need for huge capacity,
23:10better infrastructure,
23:11and also more capability of handling trade.
23:16Trade, which obviously means export and import.
23:18You mentioned a bit earlier, China is the Hainan port.
23:23That's right.
23:24Is that a competition for Malaysia or is that opportunity?
23:27Well, I see Hainan as actually being a good thing
23:31because it will not only further cement China's position as a major maritime player,
23:41but also there will be a lot of spillover effects,
23:43which I believe can benefit some of our ports.
23:46As it stands, many of our ports are handling a lot more transshipment cargo,
23:51which means transit cargo as opposed to domestic indigenous cargo.
23:55And many of these so-called intra-ASEAN cargo originates and are en route to China.
24:02So with more cargo coming out from Hainan,
24:05with its free port status,
24:07and the fact that it will attract more manufacturers,
24:09OEMs will produce goods which will be exported through Hainan port,
24:14and some of them will find our way here.
24:15So I think we will...
24:16But what we need to do is to beef up infrastructure,
24:19scalable infrastructure,
24:20improve our productivity,
24:22our competitiveness,
24:24our efficiency,
24:26and also improve connectivity.
24:30Connectivity is key for ports
24:31in terms of the number of services that they have with other ports
24:35to tap into the growing cargo from Hainan.
24:38Malaysia's maritime strategy, Nazri,
24:40are we focusing purely on it being a trade strategy,
24:48a transport strategy, a commercial strategy,
24:50are we thinking of it from a security,
24:54a national security strategy?
24:55Because we've seen how geopolitics can really change shipping routes,
24:59can really disrupt global shipping.
25:02Are we thinking of it in that perspective?
25:04Well, you know, obviously, like I said earlier,
25:06being a demand-derived service,
25:09shipping is almost at the mercy of economic activities,
25:14production, consumption, business, and industries.
25:16So far, as long as our economy continues to flourish,
25:20for as long as there's manufacturing activities,
25:22we continue to export our commodities like palm oil,
25:25oil gas, and so on,
25:27there will always be a need for ports.
25:29And as long as the numbers grow,
25:32the export grow,
25:33and also our import grow
25:35to cater to growing business and industry activity,
25:38growing demand for consumers,
25:40because our domestic consumption
25:42is also a very important engine of growth for the country.
25:45Would you say the Straits of Melaka is a secure channel?
25:49Well, so far it is.
25:50We don't see any presence of any rebels.
25:53Of course, there is, you know,
25:54the odd piracy attacks and so on.
25:56But it is considered as,
26:01in terms of maritime studies,
26:04what is known as a sea line of communication,
26:07which is a busy sea line facilitating a global trade
26:10with some choke points,
26:12because the narrowest point in a Straits of Melaka
26:15is, you know, barely about one kilometer.
26:18So God forbid, for example,
26:20an oil tanker were to spill.
26:22Oh, like the Panama Canal?
26:23Yeah, exactly, and that can cause
26:26quite a disastrous chain of effect
26:28to shipping flow from northbound and southbound,
26:32and also cross-strait.
26:33Bear in mind that there's also a lot of butter trade
26:35going on between the west coast of Peninsula Malaysia
26:39and also the east coast of Sumatera.
26:41And this has been going on for millions,
26:43because of trading of butter trade,
26:45you know, beras, you know, tobacco.
26:47I didn't realize it was that narrow,
26:49one kilometer across the narrow spot.
26:51Thank you so much for coming on the show
26:53and talking a little bit about
26:54what we're expecting in 2026
26:56in terms of global shipping.
26:59So thanks for sharing your insights.
27:01All right, thank you.
27:02That's all the time we have for you
27:03on this episode of Consider This.
27:05I'm Melissa Idris signing off for the evening.
27:07Thank you so much for watching,
27:08and good night.
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