What is the potential impact of Brexit on the Maritime Industry?

Negotiations for Brexit have been a long time in the making and Britain is still uncertain as to what the outcome may constitute. However, the majority seem to be in the agreement that the repercussions of a no-deal outcome could be catastrophic for UK businesses across the country. The Maritime Industry has made it clear they’re hoping for an agreement to be made. The industry does not take the opinion that no-deal is better than any deal and have in-fact called for a potential extension to Brexit talks to avoid the risk of a no-deal outcome. The repercussions of waiting for a settlement to be reached is the delay of any advance preparations required to prepare for any potential changes which may impact the industry. Simmonds is currently in the process of writing up technical advice documents on Brexit and how to deal with it, however, they are finding it difficult due to the uncertainty surrounding the decision. With no-one knowing the outcome of future talks, it’s impossible to make a clear plan to work around the impact. Consequences of a ‘no-deal’ outcome A no-deal outcome could cause disruption at ports including Dover, Holyhead and Portsmouth and could also have an impact on EU ports like Calais. It has been predicted that already congested ports, such as Dover, could face permanent traffic jams up to 20 miles long unless EU proposals are met in Brexit talks. In the worst case scenario, lorry drivers could be stuck in queues for the port up to days on end. Disruptions could affect supply chains and minsters have predicted that in the event of a no-deal Brexit, Britain may well need to stockpile food, medicines and other supplies to prepare against the repercussions of this. With 50% of the nation’s food, 80% of our fresh vegetables and 30% of our fresh fruit imported from the EU and Ireland, this could have a huge impact on how Britain’s food industry currently operates. It has been predicted that British ports and shipping companies will need at least three years to devise a new customs system in the event of a no-deal Brexit, including new IT systems, retraining of staff and a brand new infrastructure. It also needs to be ensured that customs systems are aligned with the rest of the EU, so one country’s way of working isn’t hit by the red tape of the UK, or vice versa. All in all, the shipping industry agrees that a no-deal scenario would not be positive for the maritime shipping industry in the short term and the long-term effects are uncertain. What happens once an agreement has been reached? The maritime industry agrees that Brexit will have significant positive and negative impacts on the shipping industry in particular. A ‘hard Brexit’ will bring with it increased trade hurdles, a consequence already being prepared for by ports such as Zeebrugge, Rotterdam and Calais who have already hired more customs officials and produce inspectors and are already predicting a likely need to hire more agents in the future. It’s believed that Brexit will bring with it a temporary slowdown in growth/trade. It is too early to say what the impact of Brexit on maritime trade will be in the long term, but it is thought to be improbable that Brexit will have a substantial bearing on overall UK maritime volumes. There are also potential negative repercussions from any restrictions placed on immigration pending Brexit talks. The UK relies greatly on skilled people from across the globe, and if their right to remain is called into question and it becomes harder to live and work in the UK, this could limit the number of European citizens wanting to work within the UK maritime sector. This could seriously harm the UK shipping cluster. Opportunities in the future   Whilst Brexit is certain to impact the maritime industry, no matter what decision is made, it isn’t all predicted to be doom and gloom. The industry is foreseeing a new or improved bilateral trade agreement between the UK and countries such as India, the US, Canada and South American countries. When in the EU, the UK government needed to get consensus approval from 27 EU countries when striking agreements with countries such as India, so Brexit will give them the chance to create agreements independently – opening a lot more scope for the countries the UK can operate with. Furthermore, politicians in Australia have already agreed to discuss a bilateral deal. The government is working with the industry to deliver an ambitious export plan which they believe will put the UK as global front-runners in the shipping industry. This plan includes doubling the number of apprenticeships that maritime companies currently offer, working with industry partners to grow the sector and developing new trade opportunities, in-turn creating more jobs across the UK. Transport Secretary Chris Grayling believes Brexit can help the UK to ‘rediscover our heritage as a truly global, seafaring, trading nation.’ Safeguard’s assurance to you Safeguard believes in supporting industries during this period of uncertainty, having built our reputation on tackling unusual or uncommon risks. This is why we’re offering a reduction of 15% off your current insurance*, for all new maritime customers. Contact us today on 01322 337557 or email sales@safeguardinsurance.co.uk. *Subject to terms and conditions


As Theresa May proposes Britain will pull out of the EU’s single market and customs union as part of a “swift and clean” Brexit, the UK Freight Transport Association (FTA) has warned Parliament that exiting without first creating an arrangement for “frictionless trade” could lead to expensive customs delays for ports, hauliers and shippers.

The customs union provides a series of uniform tariffs on the import of foreign goods, and prohibits member states from charging tariffs for moving goods across borders within the EU. The worry is that renegotiating the UK’s customs arrangements with the rest of Europe could take years – and that additional clearances needed in the meantime could lead to containers being delayed in port for up to four days. On average, one hour’s delay in port adds £15,000 to the road haulage industry.

The FTA has warned that the UK’s customs authorities will need to carry out a plethora of additional checks to goods imported from the EU – which are currently waved through without significant clearances, but which would need to be treated in the same way as goods from the rest of the world – totalling around 300 million extra import declarations per year. This could create enormous disruption unless thousands of additional staff are hired, at significant cost to UK customs.

FTA deputy chief executive James Hookham said: “Shippers, forwarders and transport operators in the UK have been used to open borders in Europe for 24 years so it’s going to take time to adjust, it can’t just change overnight. …Hopefully, there will be ‘frictionless trade’ between the UK and EU, but if there isn’t, or a prospect there won’t be, then these are the key issues for FTA members.”

It was also warned that the port of Dover may not be big enough to cope with the extra lorries which would need to park, and the containers which would need to be stored whilst their contents are checked. Mr Hookham warned: “Dover doesn’t have the space. Absolutely categorically we should avoid physical checks on our lorries.”

The Government has been urged to start planning how it will fund the extra staff and facilities needed. In response to the FCA’s warnings, chair of the Home Affairs Select Committee Yvette Cooper said: “I’m very concerned about the evidence we have heard and the way this could hit manufacturing.”