UK Ports Conference report Mike Robarts

March 3rd, 2018 by JCB
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The Association attended the ninth Annual UK Ports conference 2017 in London organised by the Waterfront conference company. The main theme of the conference was ‘The future of the UK ports industry’ . Opening the conference Theresa Crossley, Chief Executive of the UK Major Ports Group, commented that with the dissolving of Parliament it would not be possible to get complete answers on questions
on policy.Tim Walters, Maritime Market Research, gave an overview of the recent trends in trade and the
outlook for shipping in the UK. During his talk he said there would be challenges and opportunities to be faced and that Government worked on a basis of composing a national strategy because ports are expected to be self-financing.

The Current inbound volumes of cargo continue to increase (sometimes stuttering but then stabilising); outbound volumes continue to fall. The composition of trade is that liquid bulk is still the largest volume of cargo and Ro/Ro now matches dry bulk volumes. Container volumes through the UK are holding. The main demand drivers are environmental policy on coal being replaced with biomass and a new focus on renewables. There is still a global oversupply of steel.

David Wells, CEO Freight Transport Association, Charles Hammond, Chief Executive Forth Ports, and Tim Walters, Maritime Market Research, formed a panel to discuss ‘ Brexit Implications’. They discussed the mix in Imports/Exports which will change if no free trade deal is agreed. They gave the impression that the main trade areas are with the USA and France, while Germany is the largest importer to the UK. India is expected to be the main superpower in 2028.

Currently the EU has 34 trade deals with 54 countries. When the UK leaves the EU it must negotiate a new deal with each. Negotiating will be problematic as there are 27 EU countries, 54 countries that deal with EU, and then each individual country not party to agreements with the EU. If the UK diverts to using World Trade Organisation Rules there would then be a need for Customs declarations on all goods. The panel concluded the Government would need to place extra resources into dealing with this. What can be foreseen is a problem with clearing goods, so UK ports may need to provide extra holding areas and storage depots.

Charles Drummond addressed the exposure of Forth Ports to Brexit. 50% to 60% of Forth ports trade is with the EU. As a UK-based business they will continue with investment and expansion, and since the 2008 economic crash productivity of Forth Ports has improved by 20% through labour skills and IT. Most European countries have major elections between now and Brexit. If a trade deal is struck then the proposed EU bill of £100 billion could be viewed as an investment. Currently exports are benefiting from the poorer exchange rate. Concerns for all UK ports groups centre on frictionless trade, particularly in relation to customs and storage. Expansion in the Tilbury terminals continues as customers seek more land and demand greater productivity. EU customs regulations will be transposed to UK, in anticipation
of which the UK Customs IT system is being overhauled. The 40 months after Brexit will be crucial for trade, because it is the average time to strike a trade deal with the USA and China.

David Balston, Director of Policy Chamber of Shipping, gave a perspective on changing environmental challenges. His overview of the current UK shipping sector began with the fiscal benefits derived from UK Shipping – 239,900 jobs, £9.9 billion to GDP, £2.5 billion to HM Treasury. Then he explained that the EU had been helpful to UK Shipping by removing customs barriers and creating the worlds largest single market – 50% of UK trade is with the EU, and the EU recognises our qualifications and maritime security strategy. He also added where the EU has been unhelpful – treaty articles prohibiting of discrimination, gold plating IMO conventions, port services regulation, passenger rights and environmental regulations. Post Brexit, the UK could find its voice in the IMO again and be able to offer better tonnage tax and concessions.

Some of the current problems are with the Water Framework Directive, which frustrates the ferry sector. Low Sulphur regulations are a problem, because of low supply of this fuel which itself causes machinery problems. Compliance and policing enforcement remain. Scrubbers that provide a mechanical solution are still an expensive retro fit and LNG fuel options are only viable for new builds.

Lucy Hudson of Northern Freight and Logistics discussed the group’s work and how they lobbied for regional growth. They had Parliamentary time booked and had investigated and analysed how £100 billion of funding could be sourced and used to benefit trade and transport in the north of England. A business case had been proposed for ports in the North, such as Liverpool and Humber Estuary, linking road and rail networks with principal cities and other hubs.

Kimela Shah, a consultant with Oxera, gave a presentation on UK Ports and the gateways they provide to trade. UK major ports are owned by private companies, therefore private business deals are important, as is a constant race of ports to handle the larger vessels coming into service, bringing larger volumes of cargo. Larger vessels bypassing the EU to call at UK ports to remain outside customs regulations raises the conundrum of could we handle this or will it move to a service of feeders requiring more rapid clearance?

We are already seeing discrimination on contracts in other UK industry sectors by the EU but no discriminations at the moment in the transport sector. Questions which could arise post Brexit are these: should there be a bloc exemption on inland waterways and hinterland?

How about EU law in return for free trade agreement with the EU? Will World Trade regulations on state aid mean a possible reduction on regulations and subsidies? Though State aid reduces a need for subsidies, could this provoke competition between regions within the UK?

James Trimmer, Director of Planning and Environment PLA Managing Complex Waterways, spoke about how the PLA deals with 22 counties in its port area. Ports are land hungry and low value compared to private housing. Views over water increase house values. The PLA has individual terminals rather than large port areas. In the 1980s the PLA lost many private terminals to housing and the future of the port’s assets would be lost if these are not protected. The PLA initiated a statutory provision to protect wharfs through a compulsory purchase scheme. This is assessed on capacity, connectivity and ship acceptance. The main skill in negotiations is in balancing needs with an ability to deliver what is proposed. There are considerations about how residents live with nearby heavy port processing plants, with the consequent worries over environmental health, especially noise and pollution caused by ships and processing plants operating at full capacity.