Bulk Distributor Sept/Oct 16 - Page 23

Terminals & Storage September/October 2016 BULKDISTRIBUTOR 23 Opinion: What Brexit means for UK shipping The UK’s decision to leave the European Union will mean both positives and negatives. But there are more “unknowns” than “knowns” for UK maritime trade and ports. Drewry Shipping Consultants has gathered industry opinions from shippers, ports and shipping people and attempts to provide an informed preliminary assessment of the impact of Brexit, looking at 3 big questions. Will UK maritime traffic rise or fall because of Brexit? UK container traffic will see more muted growth than expected a few months ago, at least in the short term. Patrick Walters, Peel Ports’ Group Commercial Director, believes that the bigger Brexit-related risk for UK container ports is a short-term negative impact on box volumes caused by economic and political uncertainty and GDP slowdown. According to the International Monetary Fund, the Brexit vote implies a substantial increase in economic, political, and institutional uncertainty, which is projected to have negative macroeconomic consequences. The IMF has just downgraded 2016 and 2017 GDP growth forecasts for the UK. And a slowdown in UK GDP will mean a slowdown in UK maritime trade. But Walters stresses that there will be both positives and negatives in the medium and long term. Positives include opportunities to have new or improved bilateral trade agreements between the UK and countries such as India, the US, Canada (with whom the UK has strong historical ties) and South American countries. It may be easier for the UK government to strike an agreement with India without the need to get consensus approval from the other 27 EU countries, Walters observed. The UK lo-lo container port sector derives 31% of its total volume from trade with the rest of the EU, so any new tariffs on trade between the UK and the EU will pose of risk of lower intra-Europe maritime trade volume. Ro-ro maritime trade in the UK (primarily trucks and trailers on cross-Channel and Irish Sea ferries) is much more exposed than container maritime trade to the risk of new intra-Europe tariffs and/or onerous customs export and import procedures. The 78% percentage for the EU is somewhat inflated, though, because it includes UK traffic via EU ports to and from non-EU areas such as Turkey. The key questions are how much difference tariffs and non-tariff barriers will make and, to the extent that they do, whether or not there will be tariffs on UK/EU trade and the introduction of more complex customs procedures. The British Shippers’ Council debated the impact of Brexit at a meeting in July and concluded that it is too early to tell what the outcome will be, because it will depend on what new trade agreements are negotiated with both the EU and non-EU trading partners. Drewry agrees. Similarly, the British forwarders’ association BIFA said it is too soon to give a sensible prediction whether Brexit will have a positive or negative impact on its members’ trade volume with EU countries and non-EU countries. Some shippers see opportunities for more favourable trade agreements to be concluded on a bilateral basis between the UK and countries in Asia, Oceania and the Americas. Politicians in Australia have already said that they are happy to discuss a bilateral deal. But how about the depreciation of the UK currency since the Brexit vote? Sterling has lost more than 10% against the US dollar in the summer. Because the UK has a large merchandise trade deficit with the rest of the world and is a large importer of consumer goods, it would be reasonable to expect that more expensive containerised imports will become less appealing to UK consumers. However, a comparison of the trends in the US$/£ exchange rate and total UK port volume over a 10-year period shows only a weak link between exchange rates and total trade. This implies that a small change in the unit value of imports and exports has only a limited influence on total UK port volumes. Advertisers Index Advanced Polymer Coatings 9 Blackmer 14 Bluepack 14, 11, 20, 24 CH Robinson 3 Chemical Express 5 Fleetmonitor 15 Fort Vale 18 Gardner Denver 8 Intermodal Europe 24 Hoyer 6 Logichem US 20 Lohia 11 Mouvex 10 Multitank 4 Newson Gale 1 Normec 17 Port of Antwerp 19 Port of Tarragona 2 Savvy 16 Seaco Global 7 Scully 4 Tank Storage Germany 21 TWS 6 For information on advertising contact us on: +44 (0)1565 653283 Published 6 times a year. Reproduction in whole or in part without written permission is strictly prohibited. ISSN 1462-0731 In Drewry’s view, irrespective of the exchange rate and irrespective of whether or not (presumably smallish) import tariffs are introduced, UK consumers will continue to buy large quantities of products made in Asia and will not return to “made in the UK” sourcing – the differential in labour costs with producing countries in Asia rem 2VvRB6VƖrࠥv6FW"ƖW26T'G2&V6W6Rb'&WC'&F6'FW'2BW'FW'2&VfW"F&V7@ƖR6FW"6W'f6W26ƖrBFV"F'G2BFVBFF6ƖRfVVFW"6W'f6W22FW&R&6FBƗF6ǒ6FVBTvvW &VVfBg&F&V7BfW76V62'F7V&ǒ2FW&P2vW"&vR'&F66FW"6'&W &6VBFRTF6FV"6W6SG&Ww'&VƖWfW2FBFR6FW"ƖW2v6FVRF6F&V7FǒBT'G2WfVbFRTVFW'26&V6W76TfVW2&R&PF&vRVVvFW7FgF&V7B62vFƖRfW76V2ǒFR6WFbVv@'G2BB2FRƖW>( vFW&W7BF6FW&RF&V7Bf7B&6VBV'7FF7F72g&6FW"G&FR7FF7F72FRT'G2&R6FW'2g&6FFW 'FWW&V6VG'WfVvW&FFPbFRr6'FWW&R26B'&F6'CG&Ww'62BWV7G2F2fW'v&'FF6FVRࠥvTG&FR&VVfBg&Цfrvg&UR'VW0B&VwVF3'&F66W'2&RfV&gVb6rFR&VVfG2`g&VRG&FRB7W7F2&6FvFFRUP6vR&WBFWFBvBF&WGW&FFPWfVG0f66#r#6WFV&W"#`W&V'W&rvW&琧wwrf66FPFF6p#r#6WFV&W"#`&&vTwwrFF6r6VSFU4VVWFpB7F&W"#`'VFW7BVv'wwrW6WPT5DVVWFpfV&W"#`L;76VF&bvW&琧wwrV7F6ФV&vPBrfV&W"#`&2g&6PwwrG66ФFW&FWW&PRrfV&W"#`&GFW&FЧwwrFW&FWfVG26РF2b&VBFRB6vRF֖7G&FfPF7VVG2G&Ww'6VW2&6bWpVff6V6W2B67G2W&Rv6G&FPVvFF2vFFRURvfRFF6R'&F66W2&R&VG&'rFV"vfW&V@FV7W&RFB6ƖfVBG&FR&6W76W2&RFRvVF&WGW&FF&fg2f"TW&6F6RW'G0B'G2bF22FRWF6RbG&FPVvFF2vFFRURv&RFWG&VFFTG&FRvFFRURB&W7VB6&VGV7FTUR&FRfVRBVWFrbFR'G&ƖVF'&FRB'G2w&WVǒwWGFV4TbFRT6&W"b6r6BFBFPT&FR6V7F"6R'&WBv&@FBFVvFW&Rv&R6RFff7VB77VW2G&FRvVB6FVRFRT6&W"b6r&VƖWfW2F@Fr26vVBBFRVBBFRT07F7V&V7BFURF&V7FfW2&VFrFFP&FR6V7F"2BvVFRTWG2BvFVfRF&RFV6FVBv6F&V7FfW2&PFFVBvFTrFRUR'G2Ɩ7vfRF&R&WfWvVBGFV6BFBFRT6&W"b6p2( fVVƖrbF֗6( 7B'&WBv&B'&F66vW'27W'B66W72Fg&VRG&FPB66W72Fg&VRfVVBb&W"'WBFRT6&W"b6rvƖvFV@FBvFFRT&FR6V7F"FRT&VƖW0Vfǒ6VBVRg&7&72FRv&RBBfVBFBB2W&FfRFR&vBF&Vগ2fVBBFBgWGW&R֖w&F&6W706VBBFWFW"WW&V6FV2vFrFv&vFFRT&FR6V7F"खG&Ww'( 2fWrvFR7BvFWV@vB2VvFFVB&WGvVVFRTBFPUR&W7G&7F2FR&vBbURv&W'2Fv&FRT&FR6V7F"6VB&FRT6r6W7FW"ࠤ6W6R6琧6WBF7F'Bv&7F6pFW&֖6W6R6r626WBF7F'Bv&7F6pFW&֖v6vVBV7W&RVv6266W72F&6FP6W&6V"b7FइWF66( 2FW&֖W&F27Fv&Vv&Vf&RVBbFRV"2W w&VVVBvF&6'BG'W7BFR62FfW7B7F2FP6VG'&V6W26VBf"w&wFF22'Bb6( 22FfW7B&WBCCb&ƖvW"G2B&@&V7G2VFW"FR67FV6֖26'&F"5T266&FrFB7BbFRv&2FRBFRVgFfW"G&VFvrB&Bv&v&R6WFVB&Vf&RFRV6&RFbb7F( 2G&FR2FWVFVBG&76VBFR&G2@6V6FWGv&27W'&VFrFR'B2F&RWFVB2vVFvPFR'&fBFW'GW&RbFFF6&vF&VvFR7WW"6VB627F7W'&VFǒFW2&WB"R֖ƖGvVGfB6FW'26VFrF6Pg&WF66( 2f'7BfVGW&R&6FW&F6FW"FW&֖FRFW&F6FW"FW&֖v2V6VB6WF67FFW&֖2FB2WV7FVBFvR2V62r֖ƖGvVGfBWVfV@VG2F2V"B7&V6RFRF6FW"66G'&RFSW&6VBFRWF662WV7FVBF7F'BW&Fr7F&W"B2W7FFVBFFP&WB#SGvVGfBWVfVBVG2GW&rG2f'7BV"bW&F2FR'@v7&V6RBF"֖ƖVG2FRWBffRV'2V6WvW&RFR&Vv( 2ƖR2W7F&Ɨ6VB6&vFƖr@fVGW&RGF&&fFRƖ֗FVBFF22'FW'6&WGvVVƖRw&W6GFFFv7F72B&b6GF&&fFRƖ֗FVB2F7F'B7FWfVF&rBfV6RFƖr6W'f6W2f 6"6'&W'26ƖrBF'G2F&VvvFFRFR2FWBFFW fW76VGW2'f6W2'FrGfFvRbW6R77FV2B6G&2ࠠ