Geopolitics, defence spending and AI set to reshape shipping, Navios guests told

The global shipping industry is entering a period of structural change driven by geopolitical tensions, rising defence spending and the rapid expansion of Artificial Intelligence infrastructure, according to Angeliki Frangou, Chairwoman of the Board and Chief Executive Officer, at Navios Maritime Holdings Inc.

Addressing a private dinner ahead of Posidonia, Ms Frangou argued that the world economy is becoming increasingly fragmented as governments place national security considerations ahead of traditional economic efficiency. 

"Our world has become more political, more complex, less predictable than any time in recent memory," she said. "The tectonic plates of the global order are shifting."

Trade patterns that were once largely determined by cost and efficiency are increasingly being shaped by strategic concerns, with tariffs, nearshoring and friendshoring altering established supply chains.

"Trade routes are no longer organised around efficiency," she said. "Rather, trade routes are being determined by each government's view of national security."

Recent geopolitical events have accelerated those changes. She pointed to the war in Ukraine, disruptions in the Red Sea and the closure of the Strait of Hormuz as examples of how conflict is reshaping commodity flows and maritime logistics.

"The underlying assumption is that geopolitical instability, regional conflict, and supply chain disruptions are features of our current reality rather than isolated events," Ms Frangou stressed.

While these developments have created challenges, she argued that shipping also stands to benefit from two major economic trends: growing defence expenditure and investment in AI infrastructure.

NATO military spending is expected to reach approximately $1.5 trillion in 2025, guests were told, while military modernisation programmes are increasingly focused on autonomous technologies.

"This matters to us not only because modern militaries are extraordinarily energy-intensive and will influence what we transport, what we carry, but also because many of these innovations will migrate into the civilian maritime sector," she said.

The second major driver is the rapid build-out of AI infrastructure worldwide. Ms Frangou described AI as "the new industrial revolution," noting that investment is expected to exceed $5 trillion over the next five years.

"We believe that AI spending will help drive our industry, as hyperscale data centres are becoming essential infrastructure, just as railroads, pipelines, and telecom networks were in the past," she added.

She also highlighted the growing impact of digitalisation on shipping operations, citing low-Earth-orbit satellite networks such as Starlink as a catalyst for real-time vessel connectivity.

"The era of slow change is over. Shipping is now in the middle of a technological revolution," she said.