What keeps me up at night is the world’s supply chain using cargo ships carrying containers. I find it ridiculously hard to watch the news these days, because I think the emphasis is on the wrong things. Many times, they mention the trade/tariff wars and they show miles and miles of containers stacked at our ports. However, it’s not about those containers, or their contents. It’s about the end of globalization.
First a quick history lesson. There is a case to be made that World War I was the last major war about resources. You see, the countries of Europe had always been struggling to get all the resources they needed, which is why colonization took place in the Americas and Africa. It also meant that countries needed a fleet to protect the resources they were shipping home to the “empire.”
When World War II started, it was an effort on Germany’s part to regain its power and gain resources it lost in the surrender of the first World War (I know this is a great simplification, but it’s about the impact on trade). At the end of World War II, there was only one country left standing with any military strength – the United States. Not only was the U.S. strong internally but, with its two fleets in the Atlantic and Pacific, the U.S. had a global view much larger than any other country in history (with the possible exception of Great Britain).
The U.S. was in the unique position of having all the resources it needed internally. In fact, it was going to be overproducing and would need foreign markets for all its goods.
As the war drew to a close, many countries expected the United States to be the next colonist and claim rights resources from countries. However, what happened instead was a sign of genius. The U.S. decide that “free trade” delivered the benefits of colonization without having to occupy other countries. The Navy was the critical path to the new world order the U.S. was looking to establish.
While the war was still raging on July 1, 1944, 730 delegates from 44 nations met at the secluded Mount Washington Hotel in Bretton Woods, New Hampshire, to participate in what became known as the Bretton Woods Conference. Their purpose was to agree on a system of economic order and international cooperation that would help countries recover from the devastation of the war and foster long-term global growth. The conference attendees produced the Articles of Agreement for the International Bank for Reconstruction and Development (IBRD) and the International Monetary Fund (IMF).
Mexico, Chile, Brazil, Belgium, the Netherlands, Czechoslovakia, Poland, Canada, China, India, and the Soviet Union were among the active participants. Much of the discussions centered around the proposed bank’s dual purposes of reconstruction and development and its capital structure.
The IBRD Articles of Agreement were ratified on December 27, 1945, when representatives from 21 countries convened in Washington, D.C., to become the World Bank’s first members.
With the war over, the World Bank worked on building back the ability for countries to export and import using the U.S. dollar as the standard currency. The dollar strengthened and allowed veterans returning home tremendous buying power, which gave birth to the boom years and Baby Boomer generation. These boom years also addicted the U.S. to buying convenience and the rest of world to buying our exported goods, particularly food.
For the U.S. Navy, monitoring shipping lanes was easy, since so much of the goods were either coming to or from U.S.
This system and infrastructure had lasted almost 80 years but, over the years, two things happened. The first is that products became more complex, particularly in electronics and computers, which required materials to be sourced between countries. The second is that, as these components developed relations between other countries, the Navy was policing the seas with little direct benefit U.S.
In his book, “The End of the World is Just the Beginning,” Peter Zeihan looks at deglobization, asserting that the existing global order, underpinned by international trade and economic interdependence, is unraveling. He suggests that nations will increasingly need to become self-reliant, producing their own goods, cultivating their own food, securing their own energy resources, and managing their own security concerns.
It took me a long time to get here, but this shift is what we are watching happen today.
There is a case to be made that the tariffs are a logical result of the deglobalization. Personally, I would like to substitute the idea of tariffs with fees for the protection of the U.S. Navy in shipping lanes. If history is any indication, the seas are going to become more hostile. The best example of this is Chinese occupation of islands in the China Sea. By claiming these islands, China is able to cut off the supply lines to Japan, South Korea, and Taiwan.
We also know of the bombing of the Houthi because they attacked ships and interfere with Saudi Arabia’s oil exports.
As of 2025, the global cargo ship fleet comprises a diverse array of vessels, including container ships, bulk carriers, tankers, and other specialized cargo vessels. While precise figures can vary due to the dynamic nature of the shipping industry, estimates suggest that there are over 50,000 cargo ships operating worldwide.
Container Ships
Estimates are that there are over 5,500 container ships active around the world, hauling approximately 30 million TEU (Twenty-foot Equivalent Units). The container ship fleet is growing, with the majority being built in China, Korea, and Japan. The capacity of these ships is larger and designed to either go through the Panama Canal (on average holding more than 4,000 TEUs. There are also larger container ships, which can hold as much as 10,000 TEUs. The largest container ships today can carry over 24,000 TEUs.
While the orders were in for continued growth, the tariffs brought uncertainty and many contracts for new ships were put on hold. This means that older ships that should be retired are going to remain in the fleet.
Reading an article from the Maritime Executive, it’s clear that insurance rates are on the rise. An article is based on a recently released report by CEFOR that, in 2023 and 2024, the claim cost per vessel was 22 percent higher than the average from 2017-2019. CEFOR attributes this to the shipping trend towards larger and more valuable vessels, which somewhat heightens the probability of large losses. Indeed, the claims have gone up from $30M to $50M because of the growth of capacity.
However, the aging fleet is where the majority of the claims come into play. CEFOR’s actuary Astrid Seltmann predicts that a silver tsunami is in the offing, with many vessels delivered in the years after the financial crisis (2008-2012) now getting old (13-17 years). These vessels are prone to fires, machinery claims and consequential damage. Machinery claims accounted for 56% of the claims cost for these vessels compared to a 35% share on newer vessels.
It may be that the only difference is of the age of the ship, but I would like to think that IoT can mitigate some of the risk and reduce the damage of fires with better monitoring, active containment solutions, and diagnostic solutions using digital twins (angels) on machinery.
However, the point of this article is that if the U.S. Navy is not engaged in the protection of commerce, piracy is likely to be on the rise. This means there is a real need for better systems to monitor nearby ships, radar, satellite and, unfortunately, weapons.
Another problem for the ships not going through the Panama Canal is the increased exposure to weather events on the longer route around the Cape of Good Hope.
Container News already reported a 25% increase in piracy, particularly around Singapore. The general viewpoint in the article is that, stopping piracy requires a collaborative effort. Personally, I think the opportunities to utilize drones to stop pirates makes sense, along with other video surveillance measures.
As the risks become greater, the opportunity for discounts on insurance premiums based on IoT solutions and physical security measures can also increase. I would like to propose a LoRaWAN or private 5G network on the ship, but the insurance discount is probably not based on infrastructure, rather applications.
I also don’t think the U.S. Navy will be pulled away from this responsibility anytime soon, and it’s too early to predict when the next Mad Max movie will take place on the ocean. But, given history, it may become our reality before the movie comes to a theater near you.