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Brexit Watch: Who needs British ports anyway?

Brexit 155 Consumer Staples 651 Corp - Ports 804 Corp - Shipping 838 Health Care 280 Industrials - Capital Goods 487 Ireland 9 Mode - Containerized 1307 Mode - Seaborne 1634 U.S. 4741 United Kingdom 299

Supply chains operating through U.K. ports are facing increasing complexities as the end of current trading relations with the EU approaches on Dec. 31. Hapag-Lloyd has applied a congestion surcharge for shipments from the U.S. to the U.K. “caused by continuing high levels of import arrivals in conjunction with infrastructure constraints“. The existing congestion levels have already led members of all three bigh shipping alliances to divert deliveries to ports in Zeebrugge and Bremerhaven, Loadstar reports. 

Panjiva’s data shows that exports from the U.S. to the U.K. – a major cause of the congestion alongside Asia-to-U.K. shipments – climbed 5.8% higher year over year in October after a 49.4% surge in September. The expansion in October was led by a 13.1% rise in shipments handled by Hapag-Lloyd and a 17.3% rise in shipments carried by Orient Overseas. 

Exports normally decline into the last two months of the year as peak season ends, though elevated container shipping rates indicate that may not be the case as discussed in Panjiva’s research of Dec. 1.

Signs of stockpiling before Brexit

Chart segments U.S. seaborne exports to the U.K. by month.   Source: Panjiva

Trade involving Ireland and Northern Ireland will prove particularly complex. Ferry line DFDS has opened a direct Ireland-to-France service to remove the challenges from transshipping via the U.K., Shipping Watch reports, while Maersk has tightened the shipping instruction rules for shippers looking to export from the U.K. from Jan. 1

The complexities have already led container line ICL to launch a new Ireland to U.S. routing starting from Cork and headed to Wilmington, NC and Chester, PA on a weekly basis as part of a routing that also includes Antwerp in Belgium and Southampton in the U.K.

Panjiva’s data shows the leading users of ICL’s service since June have been in the food and beverages industry, led by 391 TEUs handled on behalf of Dupont’s nutrition business, followed by 224 TEUs for Pepsi and 194 TEUs for Ornua Foods. 

Other major exporters from Ireland to the U.S. east coast who currently route via the U.K. may also look to leverage services like ICL’s. Those may include drinks makers Diageo and Pernod Ricard with 4,770 TEUs and 1,770 TEUs carried respectively on Ireland-to-U.S. routes via U.K. ports in 2020 through Nov. 27. In other industries leading exporters include port equipment maker Cargotec with 322 TEus and Bausch Health with 176 TEUs.

Food, science shippers find use for Cork-U.S. service

Chart segments U.S. seaborne imports from port of Cork to ports of Wilmington, NC and Chester, PA by shipper.   Source: Panjiva

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