Orkhan Rustamov, chief executive of Malta-based global commodity trading house Alkagesta, has written an exclusive opinion piece for maritime title The Motorship arguing that those responsible for moving essential resources around the globe cannot accept high transport costs as an immovable fact of life.
Rustamov notes that since the commodities publisher Argus began tracking key prices across the global shipping network in 2005, several significant price points have recently broken records for the first time. A fee of up to US$2.5 million to pass through both locks of the Panama Canal, freight rates for tankers in the Black Sea and the rate for shipping oil from the Gulf to the Far East all reached new highs, while droughts across Europe pushed Trans-Rhine freight costs to their highest level in 14 years.
It is tempting in such circumstances to blame the ferocity and unpredictability of events, he writes. The on-off conflict in Hormuz and continued uncertainty around the stability of one of the world's most vital trade routes is a persistent and unignorable factor, and the increasingly aggressive impacts of a worsening climate add further headwinds for those sourcing and transporting goods across international seaways.
To simply accept this as a fait accompli would be a fatal mistake, according to Rustamov. Neither factor is changing anytime soon, and the instability that ever-rising prices trigger is a major risk to both the shipping and trading industry. It will invite scrutiny and measures from governments and international bodies increasingly under pressure to act, and inflict long-term damage on the industry's reputation as the custodians of essential resources.
The remedy he proposes centres on agility. Shipping companies must be embedded with traders to develop a physical trading strategy that can adapt and react quickly to sudden events, rather than treating vessels, route choice and freight as separate components of a narrowly focused procurement strategy. Diversity of options — across sources of supply, modes of transportation and route selection — should be a basic requirement rather than a nice to have, and traders bring the network, global reach and speed to shift quickly when volatility hits.
Rustamov also urges the industry to scenario plan and put contingencies in place well ahead of things going wrong. Few assumptions can be made about any part of the supply chain: the infrastructure behind sourcing, refining, distributing and receiving essential goods can come under threat at any moment, as the events of 2026 have proven. Operators should ask what the plan is if a refinery or port is out of action for a month, and whether road vehicles or pipelines can be substituted. The alternative does not have to be perfect or cheapest — it just has to be viable.
The industry has become too fixated on the live price, he concludes. Focusing on the immediate price of tradeable goods will not put shipping companies and traders in a strong long-term position, and 2026, much like 2022, has proven a wake-up call to invest time, money and resources into the bigger supply chain picture. More than half a year into the Hormuz conflict, boardrooms have had enough time to begin establishing long-term strategies for resilient, diversified supply networks and contingency plans — work he argues is essential to stop prices spiralling out of control when future shocks hit.
Alkagesta is active in petroleum products, fertilizers, biofuels and steel across more than 48 countries. Further commentary from the company is published on Alkagesta Market Insights.
