The result of the EU referendum on June 23rd has brought many questions as to how the country and economy will be affected. One of them is what Brexit holds for the shipping industry and companies trading internationally.
The truth is that at this stage it is impossible to predict the implications of the Leave vote. All will depend on the agreements that the government reaches with the EU and the level of trade that follows.
We are hopeful that the agreements will be favourable as UK remains a big export market for the EU members. According to the Office for National Statistics, in 2015 we sold £134 billion worth of goods to the rest of the EU while they sold £223 billion to us, leaving a trade deficit of around -£89 billion.
Post-Brexit the trade lanes are likely to remain the same or very similar for some time to come.
One most likely change will be introduction of a customs clearance requirement as a result of a customs barrier between UK and EU. This will increase bureaucracy and the time it takes to deliver the goods. It will also add to the costs of importing and exporting and will be reflected in the final price of goods.
While it’s difficult to speculate about what the future holds for the shipping industry, one major factor is already affecting import and export, and it’s weak pound. Importers think twice before buying goods abroad and are searching for suppliers in the country. On the other hand export is booming as UK goods have become cheaper. It has been reflected in increasing export sales for UK manufacturing companies. Food and non-alcoholic drink industry is an interesting example. While EU countries remain the biggest recipient of British foods and drinks, exports to other countries in the third quarter of last year nearly doubled the pace of those exports to EU members and rose 19.2% year on year.
Whatever the future holds, here at Unipac we will persevere to find the best shipping solutions and support our customers in their international activities.