‘Uncertainty’ is a word heard a lot since the referendum that set in motion the UK’s exit from the European Union, writes global leader for ports, Sean Barker.
Brexit negotiations have been slow to start and it could be at least two years before the split is complete. Thrashing out trade details will take much longer.
In the first of months after the Brexit vote in June 2016, uncertainty was manifested in caution from consumers and manufacturers, and a devalued pound making overseas goods more expensive. What lies ahead?
Many expect a negative impact from changing arrangements with the EU, the UK’s biggest trading partner. Without a favourable tariff structure, goods sold to and bought from the EU will cost more. Stricter customs checks will hike costs further and carry the risk of increased congestion, which may put UK hub ports at a competitive disadvantage.
Taken together, a drop in container traffic seems possible and, with several UK ports owned by international companies, investor confidence is a concern. They may think: why pump money into the UK when we have more predictable assets elsewhere to finance?
But it’s not all doom and gloom. Several operators have bucked expectations by bullishly saying that Brexit offers opportunities: The UK will be pursuing new trading relationships with partners including India, China and the US, while the weakened pound favours British exporters.