Acting as the first collaboration between our Women in Maritime network and WISTA UK, our panelists from industry and NRF, joined us at our London office to consider what the shipping landscape looks like for the year ahead. 

Here are some of our key takeaways:

Products and structures

Leasing structures (such as the French tax lease and the Japanese operating lease with call option (JOLCO)) have remained popular in recent years, while more conventional structures may have seen a partial slowdown. This seems to have been partly driven by both industry trends and the changing economic climate, with the financed JOLCO structure often able to offer owners up to 90-100% financing at a cheaper overall blended rate. 

This trend is likely to continue into 2025, but the expectation is that there may continue to be a shortage of newbuild and/or export credit-backed JOLCOs following key regulatory changes over the last few years. 

Given current geopolitical climate and overall economic conditions, there is the possibility of moving away from the Chinese sale and leaseback structure, but given the continued dominance of Chinese shipbuilders it seems the structure will remain popular for some market participants.  

Transition and green financing

The implementation of new regulations, such as the EU ETS regulations and FuelEU Maritime regulations, means shipowners and operators are facing increased regulatory pressure to reduce emissions in the year ahead.

In parallel, banks have been focussing on their own sustainability aims, which has seen an increase in the use of green loans and sustainability linked loans made available to shipping companies. Alongside the green loan and sustainability linked loans, transition financing has recognised the need to provide financing to help higher emitting, or hard to abate industries to decarbonise. 

The LMA is expected to publish its Transition Loan Principles during Q1 2025, which will sit alongside the LMA’s guidelines for green loans and sustainability linked loans and so this is likely to be an area of interest to shipping companies in the year ahead. The road to decarbonisation for the shipping sector is still unclear and so it will be important to have financing available to participants to help on this journey.

With the impending implementation of the Hong Kong Convention in June 2025 and the interaction of this convention with other ship recycling legislation – such as the EU Ship Recycling Regulation, it is clear that shipowners will need to carefully consider whether they are meeting their obligations when it comes to the scrapping and recycling of ships. 

The Responsible Ship Recycling Standards had resulted in provisions around the environmentally sound recycling of vessels routinely being included in shipping facilities.

Key players for providing financial support

We expect to see continued ECA participation and support in those countries with strong ties to the shipbuilding industry, in particular with the shipping industry under pressure to decarbonise. The ECAs remain at the forefront of supporting existing relationships in the shipping supply chain. 

ECA support in ship finance also remains an attractive prospect to new financiers (or those looking to return to the shipping market).