What might Brexit mean for shipping?

Malcolm Latarche
Malcolm Latarche

28 March 2016


Here in the UK the debate over whether to withdraw from the EU is in full swing. For most of those able to cast a vote the challenge is in finding out what an in or an out vote might mean. Its not that easy because both options are really beset by uncertainties. If the result is out the UK will need to renegotiate trade deals but an in vote will leave the UK as one of 28 or more countries in a regional grouping that can change its agenda at any time. The shipping industry is one that may be affected by a short term trade disruption but shipping is a global industry and not every UK-flagged vessel will have regular port calls in the country. What the UK does have that many other EU countries do not is a long heritage as a maritime leader that to some extent has been over ridden by EU regulations and directives. It would be arrogant to say that other EU countries do not also have a long shipping heritage but it is fair to say that UK arbitration and jurisdiction is incorporated into more shipping contracts than any other nations. Whether in or out that is not likely to change, what might is the opportunities available to British ports and the attractiveness of the UK flag. Both ports and EU flagged ships have been subject to numerous directives that can reduce their competitiveness in relation to non-EU rivals. Opting to flag in an open register is one alternative that many EU operators have taken but that can cause issues with port unions and foreign port state control regimes. Freed from the need to adhere to EU directives, the EU could choose its own direction and could perhaps even attract new vessels to its declining register. With regard to ports, the UK could roll back some of the environmental measures that have come from EU membership. There is little possibility of the UK attempting to detach itself from the North Sea SECA or its possible metamorphosis to a full blown ECA, but the west coast of the UK is outside of that area and that could open up opportunities for a hub port to be developed there. Container vessels could then offload to feeders that would serve the rest of Europe. That is less attractive perhaps if the global sulphur cap comes in 2020 because the difference between 0.1% and 0.5% sulphur levels does not mean much of a saving. There is a different story when it comes to the issue of CO2 because outside of the EU, the UK would not have to implement any monitoring, verification and reporting initiatives. That need not be limited to the west coast and could benefit Southampton or Felixstowe to the detriment of Rotterdam and Hamburg.