Global trade is flourishing in spite of significant obstacles, offering investors and shipping firms significant potential
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Investing in the shipping sector might appear to be the most unconventional option. After all, volumes in the Suez Canal have drastically decreased, and the agreement between the United States and Iran to reopen the Strait of Hormuz is hardly finished. It does appear to be a sector in danger when you consider the disruption brought on by the Russian invasion of Ukraine and the alleged threat to international trade posed by US President Donald Trump's tariffs. However, if you look past the headlines, the volume of goods being shipped globally "is only going to increase," according to Daniel Cunningham, founder and CEO of logistics company Shiplo. Simultaneously, sustainability and digitalization are generating new opportunities.
The shipping industry's bull case.
The fact that shipping has few competitors for many goods and commodities may be the best argument for optimism. According to Nick Bartlett, co-founder and director of Wayfindr, a 4PL logistics company with headquarters in Hong Kong, "sea travel still provides the most direct and efficient mechanism for moving large quantities of freight from the days of horse and cart to the present day."most cost-effective mechanism for moving large amounts of freight" is still shipping, although air travel has somewhat reduced this, particularly for quick deliveries of individual packages.
A U. The S. Speaking at a trade announcement event, President Donald Trump says, "Make America Wealthy Again."
Global trade is flourishing despite protectionist tariffs imposed by Donald Trump.
According to Nadiya Albishchenko, founder and managing director of the global trading firm Inas Exim, it is "one of the most economically efficient mechanisms for moving large volumes of goods across borders." Because of this economic advantage, the industry should continue to be the "backbone of international trade and global supply chains" and be "fundamentally strong" in the long run, able to withstand any short-term disruptions brought on by geopolitics.
However, according to Simon MacAdam, deputy chief global economist at Capital Economics, international trade "has never had it so good" despite Trump's protectionist rhetoric. The US "only makes up around 15% of world trade," and his tariffs have "not damaged bilateral trade between the US and other countries to the extent that most people were predicting." The rest of the world, however, "remains committed to free trade and is resisting the temptation to get stuck in a beggar-thy-neighbor spiral." A further benefit of the AI boom is that "it is not only very goods-intensive, but also import-intensive."
In a similar vein, MacAdam notes that although the closure of the Strait of Hormuz caused significant short-term disruption for certain markets, that will be less of a problem in the long run. New oil pipelines, one of the suggested alternatives, "will be expensive and subject to many of the same risks as shipping." By 2028, the Strait of Hormuz should be able to resume regular traffic volumes due to the US and Iran's commitment to reopening trade routes. In any event, despite the fact that the Middle East is still a major oil shipping hub, it only accounts for about 10% of all global shipping volumes, which is less than people often realize.
The industry may even benefit from geopolitical unrest since it is compelling businesses to abandon the concept of "very lean supply chains" in favor of having locations across multiple nations, with "more duplication and regionalization, leading to more trade, not less," according to MacAdam. Albishchenko has already discovered that her clients are now selecting arrangements "that emphasise continuity of supply, reliability and availability of alternatives" rather than the cheapest shipping option.
There are new ports and shipping lanes being developed.
The amount of money being invested in modernizing port infrastructure worldwide is one of the best signs that maritime transportation has a bright future. The Middle East serves as one example. As Bartlett notes, the region's governments have continued to invest in some significant projects despite the current tensions. These include the Grand Faw port in Iraq, the aggressive capital-spending plan of AD Ports, the developer and regulator of ports and associated infrastructure in Abu Dhabi, and Neom City in Saudi Arabia. When combined, these initiatives constitute the largest global concentration of newly invested capital, primarily in ports.
In other parts of the world, businesses and governments are also expanding port capacity. For instance, the Indian Ocean has seen significant investment. According to Bartlett, DP World is investing billions in a project that will run from India through Senegal and the Democratic Republic of the Congo to London, and India is opening its first deep-water port at Vizhinjam. However, Africa, particularly in the west, will experience the fastest growth over the next ten years.
About ten years ago, when Bartlett co-founded Wayfindr, trade between Asia and Africa was essentially nonexistent. However, Africa is starting to import massive amounts of Chinese goods due to the growth of online marketplaces like Jumia. Africa's industrial output has increased concurrently, "which means that it is now starting to become a significant exporter of goods in its own right." Therefore, over the next ten or so years, the continent will require significant transportation investments. Ports like Bakassi Deep Seaport in Nigeria and Ndayane in Senegal are marketing themselves as the "next generation of Atlantic gateways."
Overlay of a container ship with a security lock over a picture of the Strait of Hormuz, signifying limited supply and growing oil costs.
Additionally, interest in creating new trade routes has been rekindled. According to Jonathan Colehower, managing director of infrastructure services firm UST, interest in the trans-Arctic shipping route (also known as the "northeastern passage") connecting the Atlantic and Pacific via the Arctic coasts of Norway and Russia has skyrocketed due to the need for more capacity and technological advancements. "There is already a struggle to establish landmarks and claim territory because we do not yet have the ships or infrastructure necessary to make that feasible, but these will be in place within the next five years."
Shipping is becoming more digital.
The industry as a whole is also making investments in digital technology, particularly in "end-to-end visibility" technology. Vessels can now be tracked virtually in real time thanks to advancements in track-and-trace technology, but there are still difficulties whenever goods are transferred. Colehower predicts a transition to more thorough and secure tracking over the next five years.
According to Ben Slupecki, an equity analyst for Morningstar, digitalization will also cut down on the time and cost of transporting goods to and from ships. "Are seeing more and more opportunities to use AI in their work," he says, referring to the large freight-forwarding companies that handle the transportation of goods to and from ships. By reducing the expense of handling routine paperwork, like processing invoices and getting goods through customs, the technology is helping them increase efficiency.
According to Albishchenko, digital technology and artificial intelligence will also increase efficiency by improving shipping companies' and their clients' capacity to predict demand. Traditionally, businesses have adjusted their forecasts on a regular basis after basing them on past sales. Businesses are able "to consider broader variables, including seasonality, customers' behavior, market trends and changing commercial conditions" thanks to digital forecasting techniques. Forecasts that are more accurate "can reduce shortages, excess inventories and the need for emergency logistics decisions."
According to Cunningham, advancement will occur when the sector manages to dismantle the "data silos" that are held by various businesses in order to improve shipment coordination. He thinks AI agentsautonomous programs that can perform tasks on their own without human supervisionwill eventually make many decisions in every aspect of the shipping industry. By ensuring that all of the vessels' spare capacity is utilized and by adjusting routes in real time to ensure that they are optimized for both speed and cost, these will reduce waste.
The transition to environmentally friendly modes of transportation.
Green leaves with a background of water droplets and the idea of a CO2 tax.
For the time being, shipping companies don't have to worry too much about ambitious schemes like the proposed global carbon tax because the Trump administration's opposition may have temporarily dampened the costs of complying with stricter environmental regulations. However, Bartlett notes that it is still expected that shipping firms will make an effort to operate in a more ecologically friendly manner. Particularly younger generations are concerned about the environment, and the shipping sector cannot ignore shifting societal perceptions. As Nikos Petrakakos, managing director at Tufton Investment Management, notes, the EU has already taken matters into its own hands by including shipping in its carbon-taxation framework, despite opposition from Saudi Arabia and the US.
This will inevitably cost money. Petrakakos estimates that the cost of decarbonizing the world's shipping fleet alone could reach £1.4 trillion. Of this, at least £500 billion will be used to either build new, more environmentally friendly ships from the ground up or retrofit existing ones to run on greener fuels. For the shipbuilding industry, that is at least positive news. In fact, shipyards are so busy that "you will have to wait until at least 2030 to get a new ship if you order one now." The backlog for the majority of large shipbuilders is at least three years old.
The evolving insurance landscape.
For companies that provide services to the shipping industry, the increase in volumes and the digital revolution occurring within shipping are also positive developments. With every link in the supply chain "increasingly depending on faster information exchange across procurement, suppliers, freight partners and customers," Albishchenko sees a bigger role for businesses that can offer data and communications services. "Delayed information can sometimes create as much disruption as delayed cargo" is true.
Insurance is one significant supporting sector that will profit from shipping's ongoing expansion. According to Albishchenko, the insurance market "is becoming more dynamic" and insurance companies are shifting from basing their pricing on "historical routes, standard risk assumptions and established coverage models" to a more customized approach that takes operational resilience and shifting geopolitical conditions into account. In contrast to "treating insurance as a separate administrative function," this strategy will result in "greater interaction between insurance providers" and logistics planners.
According to Lale Akoner, eToro's global market strategist, insurers are becoming much pickier about who they will insure and the prices they are willing to offer. The market as a whole is growing "more data dependent"; some insurers even demand real-time updates regarding the location, routes, history, cargo information, and even sanctions exposure of vessels. For advisory firms, data providers, and specialized brokers, this is good news.
Demand for "sanction-screening tools, counterparty due diligence, legal advisory and general insurance compliance checks" is rising as compliance becomes a more significant concern, particularly with regard to sanctions. For specialty insurers who will profit from higher rates, all of this is good news. However, because they "earn commissions from advising clients about the risk and providing data, without directly bearing any insurance risk themselves," brokers and advisers might have a more transparent business model.
Below, we examine some of the top plays on each of these subjects.
The best shipping investments are available right now.
The Matson Company. The Kanaloa Class "Lurline" con-ro ship pulls into Honolulu Harbor in Honolulu, Hawaii, U.S. In S.
Tufton Assets (LSE: SHIP), which invests in a diverse portfolio of used commercial seagoing vessels, is one shipping-focused investment trust that's worth taking into consideration. With 21 ships in its portfolio as of April, these include container ships, gas carriers that transport liquefied petroleum gas, and dry bulk carriers that transport grains and cements. With a dividend that has more than doubled since 2020, Tufton has a proven track record of raising its dividend. With a yield of 7.75 percent, the stock is trading at about a 14 percent discount to its book value.
Matson (NYSE: MATX) is one of the biggest shipping companies in the world. Transporting goods from Asia to Alaska, Hawaii, and California is its main focus. Along with providing supply chain, warehousing, and freight forwarding services, it also owns a portion of SSA Terminals, a terminal services company. Between 2020 and 2025, Matson's revenue increased by about 40%, and its stock is currently trading at 12.6 times the projected earnings for 2027.
Lale Akoner has a strong interest in Clarkson (LSE: CKN), which provides a variety of integrated shipping services, primarily advisory and broking services. Its asset-light business strategy is "supported by good market fundamentals" and will "experience rising demand" as the sector searches for the know-how to deal with shifting market conditions. The business has a long history of paying dividends and a very solid balance sheet. Between 2020 and 2025, Clarkson's revenues almost doubled, and this growth is anticipated to continue. The stock is currently trading at 16 times the projected earnings for 2027.
A promising play about building ships.
Kisun Chung is HD Hyundai Co.'s chief executive. at the CES event in 2024.
The Korean company HD Hyundai (Seoul: 267250) is one of the biggest shipbuilding firms in the world. Shipbuilding is currently HD Hyundai's primary business, accounting for about 40% of sales and a comparable portion of operating profits. The company is a massive conglomerate engaged in a variety of industries, including robotics and oil refining. Its shipbuilding division has been doing well lately thanks to increases in both prices and productivity. Even though HD Hyundai's total revenue increased by about 275% between 2020 and 2025, the stock is only trading at 8.7 times its projected 2027 earnings. The yield on dividends is 2.2 percent.
Samsung Heavy Industries (Seoul: 010140), which derives the great majority of its income from shipbuilding, is a more pure play on the ongoing demand for new ships. The company is making significant investments in sustainability, with projects ranging from creating more efficient designs to converting to alternative fuels like nuclear power and ammonia. Autonomous ships and floating nuclear power plants are among the other technologies under development. Between 2020 and 2025, the company's revenue increased by more than half, and it is expected to grow significantly over the coming years. Despite being more costly than HD Hyundai, the stock is still trading at a respectable 16.4 times projected 2027 earnings.
Ben Slupecki of Morningstar is fond of the Danish company DSV (Copenhagen: DSV), which specializes in freight-forwarding and logistics services. Although it also handles rail and road transportation, a large portion of its business is shipping cargo to and from ships. According to Slupecki, DSV is a solid company. Its integration of DB Schenker, which it acquired from German rail operator Deutsche Bahn in 2025, is also "going well" and has made it the world's biggest freight forwarder. The stock price is 17.6 times the anticipated earnings for 2027.
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