China’s dominance in global supply chains has forced companies to adopt the China+1 approach, with Vietnam, the Philippines, and Malaysia emerging as the primary beneficiaries. However, this shift has created uncertainty in the shipping industry, with carriers pushing for index-linked contracts to protect themselves from volatile freight rates. This change has caused a delay in securing supply chains, with last-minute blanking of advertised sailings being the primary cause. While the schedules of vessels that do sail have become more resilient, shippers face the uncertainty of departures, resulting in a lot of paperwork changes until the cargo is onboard.

The maritime industry faces another challenge in the form of slow-moving regulations that have failed to keep pace with changes in the sector, particularly concerning the transport of electric vehicles (EVs) and lithium-ion (li-ion) batteries. Although the chemistry for li-ion batteries is evolving rapidly, updates to dangerous goods codes only take place every two years. The recent Amendment 42, which will require a “significant change” in the way shippers declare their cargo, has been long overdue. The amendment mandates shippers to declare dangerous goods, including li-ion batteries in EVs, in their cargo. Although Amendment 42 will be approved by the end of this year, it will not become finally mandatory until January 2026.

The slow pace of regulation highlights the need for urgent action to address the challenges posed by the increase in non-declared and mis-declared dangerous goods. While the amendment will reduce the amount of documentation required, it is essential to ensure that shippers declare all dangerous goods, including those in the miscellaneous section. The transport of li-ion batteries in EVs is an example of how the sector is evolving, and regulations must keep pace with these changes.

In conclusion, the China+1 approach has resulted in a shift in supply chains to countries like Vietnam, the Philippines, and Malaysia, but it has also created uncertainty in the shipping industry. While regulation in the sector is moving too slowly to keep up with the changes in the industry, Amendment 42 is a step in the right direction. However, urgent action is needed to ensure the safe transport of dangerous goods, including li-ion batteries in EVs. It is essential to ensure that regulations keep pace with the evolving sector to avoid any adverse effects on global supply chains.