NAVIOS Group chief executive Angeliki Frangou has told a shipping audience in Athens that she is optimistic about future industry prospects even though shipping can be considered to be at a historic and confusing crossroads.

“In terms of future prospects, I am optimistic but I wish it were for different reasons,” she said.

While the worst effects of the lockdowns appeared to be fading in the west, elsewhere the signs were less favourable and Chinese demand and output could be slowing down.

At the same time, she said, Russia was engaged in a “tragic” incursion into Ukraine and the consequences were accelerating inflation and rising interest rates.

It was “impossible to know what this all means” for the industry, said Ms Frangou, speaking at a Navios reception for guests held at the National Gallery of Greece.

There were “too many potential consequences to digest and analyse.” But understood in terms of the impact on the simple shipping metric of the cost of shipping one tonne of freight for one mile the industry, “in this limited sphere,” could be optimistic.

Optimism could be founded on two main reasons, according to Ms Frangou.

One was that the lockdowns in key global economies had exposed flaws in the prevailing “just in time” mantra of the manufacturing and logistics chain.

“We are evolving from a world of ‘just in time’ manufacturing to ‘just in case’ where countries and companies purposefully build redundant systems,” she said.

There was a spreading awareness that goods could not be guaranteed if the system has a single point of failure.

“From a shipping perspective, building for resilience translates into more tonne miles as things are duplicated,” Ms Frangou said.

The second was the situation in Ukraine, which had also caused a shock to supply chains stemming from the importance of Russia and Ukraine as sources for oil, gas, wheat and coal.

“The displacement of established suppliers not only increases price, but increases tonne miles as countries and people are forced to source their needs from places further away,” said Ms Frangou.

“We do not see this easing anytime soon, but we are watching it carefully,” she added.

The lockdowns had given Navios Group time to reconsider its business model, leading to the consolidation last year of much of its dry bulk business as well as tankers and containers under Navios Maritime Partners, which accordingly became the largest US-listed shipping company.

“We believe the sum is significantly more resilient than the individual parts,” Ms Frangou said.

“Not only does diversification provide strength but it also brings opportunity.”