MENU

Panjiva_research_logo

Brexit Watch: Freeport Plan Needed As British Port Activity Passes Brexit Bounce

Brexit 169 Corp - Ports 838 Mode - Seaborne 1721 United Kingdom 329

The British government is investigating the potential to set up a series of freeports after Brexit in order to encourage regional trade and investment. The precise location and allowances for the freeports has yet to be defined and is unlikely to be resolved before Oct. 31 when Brexit is scheduled to be implemented. As outlined in Panjiva’s research of Aug. 11 there are still considerable political uncertainties around Brexit and the freeport plan may not survive.

The major U.K. ports certainly need a boost to activity. Panjiva analysis of official data shows the volumes handled through major ports increased by just 2.7% year over year in 1Q with a 5.0% improvement in imports being offset by a 0.1% rise in exports. 

That may also reflect a rush in shipments ahead of the original Brexit date of end-March. There’s been a subsequent downturn in the second quarter of 0.2% based on macroeconomic data. Looking over a longer period there’s been lackluster growth since before the Brexit referendum with total volumes up by just 0.2% in the 12 months to Mar. 31 compared to calendar 2015.

REBOUND THANKS TO BREXIT PLANNING

Chart shows U.K. port activity by direction. Calculations based on Department of Transport data.  Source: Panjiva

The fastest growing major port city in 1Q was London, including DP World’s London Gateway, which may still have surplus capacity after it saw a 13.1% year over year expansion. That was followed by Liverpool with a 12.6% expansion including Peel Hunt’s facilities which added new services from COSCO Shipping. 

At the other end of the scale Felixstowe is still suffering the after effects of Hutchison Ports’ software upgrade and saw a volume decline of 6.5%. Southampton meanwhile dropped 7.4% but may see a recovery with Independent Container Lines moving a service there from Liverpool, World Cargo News reports.

Final decisions, however, are more likely to be driven by the potential to increase trade via local manufacturing or shipment opportunities rather than just surplus capacity caused by declining volumes.

LONDON AND LIVERPOOL LEAD AMONG THE MAJORS, FELIXSTOWE STILL FALLING

Chart segments U.K. port activity by port. Bubble size based on past 12 months’ activity, colors for emphasis only. Calculations based on Department of Transport data.  Source: Panjiva

Copyright © 2021 Panjiva Supply Chain Intelligence, a product offering from S&P Global Market Intelligence Inc. All rights reserved.