Ever since Great Britain joined the EU, its shipping lines, freight forwarders and producers have been benefiting from exempt from duty, simplified trade regulations, educational qualifications that are recognized within the EU and a standardized approval procedure. Now they fear the consequences of the Brexit.
Great Britain’s dependency on sea trade is huge: On the one side, about 95 percent of all imports are reaching the island over the sea, on the other side, thanks to shipping lines and freight forwarders within the container shipping industry, Great Britain is among the ten biggest export countries worldwide. For shipping lines and freight forwarders the EU membership plays a decisive role: Right behind the US, Germany, the Netherlands, France and Ireland are among the UK’s most important export markets and around 40 percent of the shipping traffic within the UK is created by European shipping lines.
So far the shipping lines and freight forwarders of the EU Member States have been benefiting from low trade restrictions within the continent. Those might end with the Brexit. Imports into the UK would not only become more complicated for shipping lines and freight forwarders but also more expensive. If the shipping lines’ costs rise, this will cause higher freight rates for freight forwarders and on a long-term increase the selling prices of goods.
British exporters have to fear rising costs
But also the British shipping lines and freight forwarders have been benefiting from the EU membership and the domestic trade within the continent, which has become easier due to the membership. It might be possible that the British Pound, which fell due to the Brexit, could boost the demands abroad for UK goods and therefore be useful to shipping lines thanks to an increasing number of deliveries. However, due to the trade regulations and the rising costs for shipping lines and freight forwarders that could follow after the Brexit, the companies have to fear that products exported from Great Britain within the EU could become more expensive instead of cheaper.
Chamber of Shipping expects flag change for British ships
In addition, the Chamber of Shipping fears that as a result of the Brexit less and less shipping lines can hoist the British flag on their ships. Shipping lines that operate their ships under the flags of the EU Member States do not only benefit from simplified educational qualifications of shipping lines apprentices within the EU countries but also from EU safety measures against piracy on Member States’ ships. Apart from shipping lines that so far have been operating under the British flag, other companies within the industry could take the Brexit as a reason to turn their backs on the UK. For Great Britain, this would not only mean a loss of jobs within shipping lines, freight forwarders and producers but also a loss of a significant revenue.
Speculations with severe consequences
However, what causes the biggest damage to the British people is the insecurity of all those who are concerned – shipping lines freight forwarders just as much as producers and customers – in view of the Brexit. In view of the negotiations about the exit conditions and possible follow-up contracts which have not been even started yet, prospects about the Brexit’s consequences for the shipping lines especially and the container shipping as a whole are mostly speculations. However, the disastrous exchange rate for the British Pound since the referendum shows that those speculations are already becoming a reality.
