The global maritime system is still open, but it is experiencing more stress, increased volatility, and varying access constraints.
According to a recent commentary in the Wall Street Journal, the "era of free seas is coming to an end." It highlights tensions in the Strait of Hormuz and the potential for countries to start charging fees for global shipping.
This is an interesting story, and it presents a real concern. However, it exaggerates the current situation.
Today's maritime trade environment is influenced by three key factors: crises, coercion, and market responses that adjust risk pricing in global shipping. While these factors often occur together, they are distinct and do not lead to a single outcome.
In the Strait of Hormuz, we are witnessing both crises and coercion alongside ongoing military confrontations. This directly impacts commercial shipping in the region, resulting in attacks, ship seizures, and attempts to impose tolls or similar demands on transit.
Iran has shown a consistent pattern of such behavior over the years, including interference with commercial tankers in Gulf waters over the last decade. This is evident from past incidents of tanker harassment and seizures, as well as previous disputes during the Tanker War.
Additionally, there are subtler costs imposed by risk, reflected in higher insurance premiums, decisions to reroute ships, and delays factored into freight rates when security conditions worsen. Often referred to as payments for safe transit, these costs are more accurately described as market-based risk pricing. This has been especially noticeable during disruptions like the Red Sea shipping crisis, which led to increased war-risk premiums.
This difference is important. Blending crises, coercion, and market responses creates a misleading impression of a coordinated move toward tolls on maritime routes, which is not the case.
This Didn’t Start Here
The issues in the Strait of Hormuz are not unique; rather, they are the most visible example of a larger trend. Crises have long affected maritime activities. What has changed is the frequency, visibility, and simultaneous nature of these events.
Access to sea routes has never been completely unrestricted. It has always depended on security, enforcement capabilities, and shared norms that, while imperfect, have allowed international maritime operations under generally accepted rules.
Disruptions in maritime order are not new. For example, during the piracy crisis off the coast of Somalia, even a U.S.-flagged ship was hijacked. This shows that maritime order has faced challenges, with local rules occasionally broken before being restored through international cooperation.
It’s essential to acknowledge the persistent disruptions in recent years while placing them in a broader historical context shaped by changes in global port influence and competition over marine access and control.
The maritime system we depend on today was established during a time of relative stability, where security was often taken for granted rather than included in the cost of global trade. In reality, the responsibility for that stability has fallen largely on the United States and its allies.
As global trade has grown, infrastructures have consolidated, and more participants have started operating at sea, the balance has shifted. The result is a system that is ostensibly open but increasingly influenced by competition for resources, control, and influence.
The factors that have maintained open maritime access are now facing greater pressure, as evidenced by the White House's Maritime Action Plan, Congressional guidance on the National Maritime Strategy, changes in global port ownership and influence, and assessments of shipbuilding capacity and market distortion.
Looking back, we can see this strain manifesting across various parts of the system. The conflict in the Black Sea altered grain trade routes without stopping them. Attacks in the Red Sea forced ships to reroute around the Cape of Good Hope. Limitations at the Panama Canal slowed traffic and affected global schedules.
These are not isolated incidents; they illustrate a system that is still operational, but with less flexibility and more vulnerability to disruption.
The System Still Works—But Under Pressure
We cannot eliminate the risks of crises or coercion in maritime activities. These challenges will continue to create disruptions and varying levels of control within the maritime trade system.
However, the good news is that we do not need to eliminate all of these risks for the maritime system to keep running. Shipping routes adapt, costs may increase, and capacity can diminish, but goods continue to flow, as seen in ongoing pressures on global supply chains.
Yet, disruptions are becoming more frequent and longer-lasting. Sometimes, they coincide with attempts to gain control over disputed sea lanes. The combined impact of these factors slows down system performance. While it continues to operate, it does so with tighter margins and greater sensitivity to disruption.
In summary, the system remains functional but is operating under more stress. This stress is not just a theory; it is felt daily by the mariners and crews navigating through risky waters and spending extended periods at sea.
The Economic Effects Don’t Stay at Sea
The impacts of crises and coercion extend beyond maritime boundaries.
As shipping routes become longer and risks grow, the effects ripple through the global economy, influencing fuel prices, consumer costs, and the availability of goods. These pressures can be seen in everyday life: rising gas prices, higher store costs, and tighter margins across supply chains.
These dynamics also affect financial and monetary policy choices, influencing how markets evaluate risk, how businesses manage sourcing and inventory, and how central banks address inflation tied to supply chain performance and other pressures.
For companies, these changes create difficult trade-offs. They must balance costs with reliability, speed with security, and efficiency with resilience. Strategies for rerouting, inventory management, and sourcing diversification are no longer just operational tweaks; they are strategic responses to a system facing increased uncertainty.
What begins as disruption at sea evolves into economic and national security issues with tangible downstream effects.
What This Moment Actually Means
The Wall Street Journal identified a real concern in the Strait of Hormuz. The dangers are tangible. Attacks, seizures, and escalations are not just hypothetical. Misinterpreting this situation as a sign that international maritime order is fracturing or that the era of free seas is ending is problematic.
The truth is more complex and has been building over time.
If the Strait of Hormuz feels like a significant moment, it does not signify a breakdown in global maritime order. Rather, it represents a localized breakdown within a system that still functions.
These occurrences should not be viewed as a shift toward widespread fees or restricted waterways but as part of a system adapting while facing repeated challenges through increased costs, limited access, and reduced performance.
There is little evidence to suggest a wider trend toward imposing costs on transit across international waters, a strategy that would be difficult to maintain from legal, economic, or operational perspectives. Even the most aggressive recent actions represent a specific and limited attempt to exert control during conflicts, not a broad model for global maritime practice.
More importantly, these trends are interconnected. They reveal a broader pattern of increasing pressure throughout the maritime system, driven by growing global trade, changing regulatory environments, shifts in infrastructure control and access, and escalating competition among nations and other players.
While this situation has developed over many years, it has become significantly more pronounced since 2019, starting with the supply chain disruptions caused by the pandemic and continuing with various incidents since then. The consequences of these disruptions—from the pandemic to the conflicts in the Black Sea and Red Sea, and current issues in the Strait of Hormuz—are increasingly interconnected.
These events now overlap and amplify, increasing system-wide stress.
Collectively, these trends suggest a system that is less defined by steady-state efficiency and more by its ability to operate under constant pressure.
Why This Matters
The maritime environment is essential for economic security, strategic mobility, and national resilience. Understanding the significant and broad changes that have unfolded in the maritime domain over the decades—driven by evolving competition, shifting control patterns, and ongoing disruptions—will significantly influence how nations and markets prioritize maritime capacity, access, and resilience.
More importantly, these dynamics will necessitate trade-offs between cost and security, efficiency and reliability, and speed and control. Such choices won't be made in theory; they will emerge in shipping lanes, corporate boardrooms, and national policy discussions.
Misinterpreting the current situation risks overlooking the importance of the maritime domain in economic performance, national security, and long-term strategic advantage, or making decisions too late or under the wrong assumptions.