Shipping volumes are set to increase despite the current spate of geopolitical disruptions, according to industry executives and economists, who argue that the fundamental economics of sea freight still outweigh short-term turbulence. Daniel Cunningham, founder and CEO of logistics firm Shiplo, says the amount of goods moving by sea “is only going to increase”, while digitalisation and sustainability are opening up new opportunities for the sector.
The enduring cost advantage
The core of the bull case rests on a simple fact: for moving large quantities of freight, shipping has few serious rivals. Nick Bartlett, co-founder and director of the Hong Kong-based 4PL logistics provider Wayfindr, points out that “from the days of horse and cart to the present day, sea travel still provides the most direct and efficient mechanism for moving large quantities of freight.” Air travel has made inroads for urgent individual packages, he acknowledges, but shipping remains – and will continue to be – the “most cost-effective mechanism for moving large amounts of freight”.
Nadiya Albishchenko, founder and managing director of international trading company Inas Exim, agrees, describing shipping as “one of the most economically efficient mechanisms for moving large volumes of goods across borders.” This structural advantage, she says, ensures the industry’s long-term future is “fundamentally strong”, allowing it to ride out short-term geopolitical shocks and continue as the “backbone of international trade and global supply chains”.
Simon MacAdam, deputy chief global economist at Capital Economics, cautions that while the Strait of Hormuz shutdown and the Russia-Ukraine conflict have created significant disruption, the impact on global trade volumes has been less dramatic than feared. He notes that Donald Trump’s tariffs have “not damaged bilateral trade between the US and other countries to the extent that most people were predicting”, partly because the US “only makes up around 15% of world trade”. The rest of the world, MacAdam argues, “remains committed to free trade and is resisting the temptation to get stuck in a beggar-thy-neighbour spiral”. He also highlights the AI boom as a tailwind, since it is “not only very goods-intensive, but also import-intensive”.
On the Strait of Hormuz, MacAdam expects normal traffic volumes to return by 2028 as Iran and the US are committed to reopening trade routes. Proposed alternatives, such as new oil pipelines, “will be expensive and subject to many of the same risks as shipping”. Moreover, the Middle East accounts for only around 10% of global shipping volumes, so the disruption is less systemic than it might appear.
Geopolitical turmoil may even provide a silver lining, MacAdam adds. Firms are moving away from “very lean supply chains” towards “more duplication and regionalisation, leading to more trade, not less”. Albishchenko has observed that her customers now prioritise “continuity of supply, reliability and availability of alternatives” over the cheapest shipping option.
Infrastructure investment and new routes
The scale of capital being poured into port infrastructure globally is perhaps the clearest signal of confidence in shipping’s future. Bartlett points to a cluster of major projects in the Middle East – Saudi Arabia’s Neom city, the aggressive capital spending of Abu Dhabi’s AD Ports, and Iraq’s Grand Faw port – which together represent the biggest concentration of new investment in ports anywhere in the world.
Elsewhere, India is opening its first deep-water port at Vizhinjam, while DP World is investing billions across a programme stretching from India through Senegal and the Democratic Republic of Congo to London. But the region that will see the most explosive growth over the next decade, Bartlett says, is Africa, especially the western side. When Wayfindr was founded around ten years ago there was “virtually no trade between Asia and Africa”. Now, the development of online marketplaces such as Jumia means Africa is importing huge volumes of Chinese products, while rising industrial production within the continent means it is becoming a significant exporter in its own right. Ports such as Senegal’s Ndayane and Nigeria’s Bakassi Deep Seaport are positioning themselves as “next generation Atlantic gateways”.
Interest in new trade routes is also growing. Jonathan Colehower, a managing director at infrastructure services company UST, says the need for additional capacity and advances in technology have triggered an “explosion of interest” in the trans-Arctic shipping route (the “northeastern passage”) connecting the Atlantic and Pacific via the Arctic coasts of Norway and Russia. “We don’t yet have the infrastructure or ships to make that viable, but these will be in place within the next five years, which is why there’s already a fight to lay out landmarks and claim territory,” he says. Research from the newsroom’s investigative unit notes that the UK, with its scientific role and maritime services industry, is well-positioned to benefit from increased Arctic shipping, even if the Northern Sea Route may not replace traditional routes.
Within the UK, port performance is mixed. Total freight tonnage handled by UK ports fell 1% in 2024 to 429.7 million tonnes, but container traffic rose by 2.1 million tonnes, partly due to expanded capacity at ports such as London Gateway. Roll-on/Roll-off traffic on Great Britain–Northern Ireland routes also increased. The UK’s beneficial owned trading vessels grew 9% to 54 million deadweight tonnes, although the UK Ship Register saw a 12% decline in gross tonnage to 8.7 million gross tonnes by end-2025.
Digitalisation and data-driven shipping
All parts of the industry are investing heavily in digital technology, notably in “end-to-end visibility”. Track-and-trace tools have improved dramatically in recent years, allowing near real-time vessel tracking, but challenges persist whenever goods change hands. Colehower expects the next five years to bring more comprehensive and secure tracking.
Ben Slupecki, an equity analyst at Morningstar, says big freight-forwarding companies “are seeing more and more opportunities to use AI in their work”. Digital tools are cutting the cost of routine paperwork such as invoice processing and customs clearance. Albishchenko adds that AI and digital forecasting allow firms to consider “broader variables, including seasonality, customers’ behaviour, market trends and changing commercial conditions”, reducing shortages, excess inventories and the need for emergency logistics.
Cunningham believes the industry’s next leap will come when “data silos” held by different firms are broken down to allow better co-ordination of shipments. He predicts that many decisions will eventually be made by AI agents – autonomous programs that operate without human supervision – which will reduce waste by using every bit of spare capacity and optimising routes in real time for speed and cost. The UK Maritime Innovation Hub is supporting the adoption of such digital technologies to enhance safety, efficiency and decision-making.
Sustainability and the green transition
The Trump administration’s opposition may have temporarily eased compliance costs, but the expectation that shipping must become greener remains. Bartlett notes that younger generations care about the planet, and the industry cannot ignore changing social attitudes. Nikos Petrakakos, managing director at Tufton Investment Management, points out that the EU has already added shipping to its carbon-taxation framework, despite opposition from Saudi Arabia and the US.
The cost of decarbonising the global fleet is enormous – up to $1.4 trillion, Petrakakos estimates, with at least $500 billion of that going to retrofitting existing ships for greener fuels or building new, more sustainable vessels. That is good news for shipbuilders: yards are so busy that “if you order a new ship now you will have to wait until at least 2030 to get it”, and most major shipbuilders have a backlog of at least three years.
In the UK, the government has committed to reaching net-zero greenhouse gas emissions for the domestic maritime sector by 2050. The UK Shipping Office for Reducing Emissions (UK SHORE) programme has allocated £240 million in R&D funding for clean maritime technologies since 2022, supporting over 200 projects. Research and development is progressing on zero-emission fuels including hydrogen, ammonia, methanol, and even nuclear propulsion. The UK is also involved in the Clydebank Declaration, with feasibility studies and pilot routes for green shipping corridors under way. Offshore renewable energy, including offshore wind farms, is a critical part of the UK’s net-zero drive, creating both opportunities and risks for shipping as vessels are needed for construction, operation and maintenance.
The changing face of insurance and compliance
The growth in shipping volumes and the digital revolution are also reshaping the ancillary services sector. Albishchenko sees a greater role for companies that provide communications and data, as all parts of the supply chain “increasingly depend on faster information exchange across procurement, suppliers, freight partners and customers”. Delayed information, she warns, “can sometimes create as much disruption as delayed cargo”.
The insurance market is becoming more dynamic, moving away from pricing based solely on “historical routes, standard risk assumptions and established coverage models” towards bespoke approaches that factor in changing geopolitical conditions and operational resilience. This means “greater interaction between insurance providers and logistics planners, rather than treating insurance as a separate administrative function”.
Lale Akoner, global market strategist at eToro, says insurers are becoming “more data dependent”, with some requiring real-time updates on vessel location, routes, history, cargo data and sanctions exposure. That is good news for advisory firms, data providers and specialist brokers. Compliance around sanctions is also driving demand for “sanction-screening tools, counterparty due diligence, legal advisory and general insurance compliance checks”. Specialist insurers benefit from higher rates, but Akoner notes that brokers and advisers may have the cleaner business model, “as they earn commissions from advising clients about the risk and providing data, without directly bearing any insurance risk themselves”.
The UK shipping industry, which directly employs over 98,000 people and supports more than 728,000 jobs across the wider economy, contributed £16.1 billion in direct Gross Value Added (GVA) and enabled £957.3 billion in UK trade in 2024, according to industry data. An estimated 24,550 UK seafarers were active at sea in 2025, a 2% increase on the previous year.
Investment plays on a growing sector
Among the vehicles investors are using to gain exposure, Tufton Assets (LSE: SHIP) is an investment trust that owns a diversified portfolio of 21 second-hand commercial vessels – dry bulk carriers, container ships and gas carriers. Its dividend has more than doubled since 2020, and the stock trades at around a 14% discount to book value with a yield of 7.75%.
Matson (NYSE: MATX) focuses on the Pacific, moving goods between Asia and Hawaii, Alaska and California, also offering freight-forwarding and terminal services. Its revenue has grown by roughly 40% since 2020, and the stock trades at 12.6 times expected 2027 earnings.
Clarkson (LSE: CKN), the integrated shipping services firm, has an asset-light model that Akoner says “will experience rising demand” as the industry seeks expertise to navigate changing markets. Its revenues nearly doubled between 2020 and 2025, and it trades at 16 times expected 2027 earnings.
On the shipbuilding side, HD Hyundai (Seoul: 267250) is a large South Korean conglomerate whose shipbuilding arm accounts for around 40% of sales and operating profits. Total revenue has jumped by around 275% since 2020, yet the stock trades at only 8.7 times expected 2027 earnings, with a 2.2% dividend yield. A purer play is Samsung Heavy Industries (Seoul: 010140), which derives the vast majority of revenue from shipbuilding and is investing heavily in sustainability, from more efficient designs to alternative fuels such as ammonia and even nuclear power. Its revenue has grown more than 50% since 2020 and the stock trades at 16.4 times expected 2027 earnings.
Morningstar’s Ben Slupecki favours DSV (Copenhagen: DSV), the Danish logistics and freight-forwarding firm that became the world’s largest freight-forwarder after buying DB Schenker from Deutsche Bahn in 2025. He describes it as a strong business whose integration of DB Schenker is “going well”. The stock trades at 17.6 times expected 2027 earnings.
