Shadow Fleet

What is the Shadow Fleet?

The shadow fleet, also known as the dark fleet (see below), refers to a group of vessels engaged in deceptive shipping practices (DSPs), particularly in relation to the ongoing war between Russia and Ukraine. Windward’s Maritime AI™ platform has identified a three-tiered system of vessels to paint a more accurate picture of Russian oil smuggling: 

• Cleared fleet: tankers not exhibiting any suspicious conduct, such as flag hopping or irregular ownership structure. It is important to be able to quickly identify these vessels, so that maritime organizations are not paralyzed by false positives and indecision that will further hamper global trade. 
• Gray fleet: a completely new phenomenon evolving from the Russia war. Overseas companies have been quickly established following the outbreak of the war, to obscure vessel origins and ownership, and to appear law-abiding/non-sanctioned. This fleet is described as “gray” because it is difficult to determine legality and sanctions compliance in many cases. A significant number of these vessels also switch flags (“flag hopping”) frequently. Windward has identified over 1,000 gray vessels (these numbers are constantly changing) around the world. 
• Dark fleet: this fleet often utilizes “dark activities” (the intentional disabling of the automatic identification system) to move wet cargo, along with other deceptive shipping practices (DSPs), such as ID and location tampering. Windward has identified over 1,000 dark fleet vessels (these numbers are constantly changing).

Background on the Shadow Fleet

The shadow fleet was popularly estimated to number around 600 vessels earlier in the war, with mysterious ownership designed to obscure their transport of sanctioned Russian oil/wet cargo since the start of the Russian war. 

As with previously sanctioned regimes, it quickly became apparent that some actors would work diligently to circumvent the West’s efforts to constrain Russia. Russia and affiliated organizations adopted several of the deceptive shipping practices used by other sanctioned regimes, such as Iran and Venezuela. This resulted in many vessels that were previously uninvolved in smuggling getting flagged. 

The price cap, with its different tiers, has influenced the types of DSPs that began to occur more frequently. As buyers changed, with a major shift from Europe to India, China, and Turkey, the makeup of the required fleet to transfer Russian crude was also altered. 

To distinguish between the different types of vessels and activities now occurring, many within the maritime industry have started to use the terms “dark fleet” or “shadow fleet” (often interchangeably).

WhichTactics Do Shadow Vessels Use to Avoid Detection?

Which Types of Illegal or Sanctioned Activities Are Shadow Fleets Often Involved In?

Shadow fleets are often involved in several types of illegal or sanctioned activities, including:

1. Oil smuggling: a significant portion of the shadow fleet is engaged in smuggling oil, particularly from countries under sanctions, using deceptive shipping practices to evade detection.

2. Transport of sanctioned commodities: these vessels are frequently used to move goods such as coal, grain, and other natural resources from countries under international sanctions, such as Russia, Iran, or Venezuela.

3. Avoiding sanctions: by switching flags (known as “flag hopping”) and using complex ownership structures, shadow fleets obscure the origin and ownership of vessels to avoid being sanctioned.

4. Deceptive shipping practices (DSPs): shadow fleets employ techniques like manipulating vessel identification systems, tampering with location data (GNSS manipulation), and disabling automatic identification systems (AIS) to hide their true movements and evade tracking.

These activities make shadow fleets a major concern for regulators and the global shipping industry.

What Are the Consequences for Companies Caught Using Vessels Connected to the Shadow Fleet?

Companies that use a shadow fleet face severe consequences that can significantly impact their economic standing. The reputational damage can also be profound, affecting a company’s standing in the global community for years. It can lead to a decline in customer trust, a drop in share prices, and a loss of partnerships. Investors may withdraw support, and credit ratings can be downgraded, making it difficult for the company to secure financing for future projects. 

Legal actions can result in hefty fines, seizure of assets, and potential criminal charges against executives involved in shadow fleet operations. Companies may lose their business licenses, be blacklisted from certain markets, and face increased scrutiny from regulators. 

In extreme cases, companies may even be forced into bankruptcy or dissolution due to the cascading effects of being linked to a shadow fleet. The long-term impact extends beyond immediate penalties, affecting their ability to operate and thrive in the global arena.

What are Some of the Technical Innovations in Monitoring Shadow Fleets?

Advancements in technology have significantly enhanced the ability to track and monitor shadow fleets. Innovative technology, such as Windward’s Maritime AI™ platform, is increasingly being utilized to analyze vast amounts of maritime data. These algorithms process information from various sources to identify patterns and predict potential deceptive shipping practices. 

Satellite imagery offers high-resolution images that can detect vessel movements and identify suspicious patterns. Satellites monitor large areas of the ocean, providing real-time data on ship locations, which is essential for detecting anomalous behavior or unauthorized activities.