Cultivating Relationships

Categories: NewsPublished On: March 25, 20221139 words34.5 min read

Strong relationships with existing and

new trading partners are key to a post-Brexit

and post-pandemic operating landscape

Gavin Simmonds, Policy Director – Commercial

The UK Chamber of Shipping has actively been addressing the ongoing changes to the
operating landscape as a result of Brexit and COVID, which have necessitated prompt and agile responses from government and industry. Our international trade forum has been extremely active over the past year to navigate a number of fast-moving challenges and enhance UK resilience.

Brexit has allowed for our existing trade relationships with the EU to shift towards new free trade agreements (FTAs) with a number of non-European countries such as the United States, Australia, New Zealand, Canada, Japan, Mexico, the Gulf Co-operation States, and the CPTPP. Members of the UK Chamber of Shipping have shown immense initiative in taking on the opportunity to either expand on existing trade relationships or develop new ones in markets that were felt to be restricted or underexplored.

These new FTAs make it possible for us to build stronger relationships with other maritime nations with whom we have long trading histories. Diversification and growth in international maritime trading services benefits us as well as global communities, and allows the UK to demonstrate a wider commitment to international logistics and commodities.

This broadening of scope also enables us to offer existing and incoming trade partners further improvement in conditions that are harmonious with their national plan as well as our own. We have seen countries such as Australia, the United States, and New Zealand already gaining from the processes of these renegotiations, and the growth in our own maritime and offshore sectors speaks to reciprocal benefits.

India is also a key market for our trade partnerships with a rapidly expanding economy and a significant location for access to Asian markets. With a large upwardly mobile population, the demand for UK skill sets and business partnerships is rising and offers mutual advantages for trade.

A big advantage that the UK is able to offer in international partnerships is our knowledge and skills with renewables, which is a vital commodity for export in the age of decarbonisation. We have considerable experience of generating and managing offshore domestic energy (including windfarms), making us industry leaders in the global effort towards sustainability.

There are real opportunities at hand to export these skills and capacities, with the benefit of enhancing global efforts to combat climate change. Industry commitments, such as the Clydebank Declaration at COP26 that seeks to establish six green corridors (or zero-emission routes) by 2025, will benefit from the establishment of these partnerships along both the supply chain and the operational value chain. We are already seeing a demand for our expertise that is likely to grow in coming years in line with an increased focus on sustainable green operations.

Building these stronger connections come at an opportune time, as – with existing measures in place to address the continued effects of the pandemic – industry leaders within the UK are now shifting focus from managing effects on the supply chain to refining and improving the logistics and trade processes. We are already seeing an increased demand for shipping services and the UK Chamber of Shipping has been working hard to assist our members in meeting these needs. Every effort must be made to provide a level of efficiency which reduces cost while providing a quality of service which meets demand and ensures satisfaction within the trade relationship.

We are about to enter the second stage of customs transition following Brexit, which involves new import and export controls. These rules involve particularly technical measures governing reporting origin requirements, such as the new UK-EU Trade and Co-operation Agreement (TCA) which came into full effect as of 31 January 2022. Additionally, there will be sanitary and phytosanitary checks for certain types of cargo. The industry will need ongoing support for reliable compliance and we are committed to ensuring that this is available to our members.

We are fully engaged and will continue to represent the interest of our members in the joint customs consultative committee (JCCC) and its sub-groups. I encourage members who have continuing concerns to bring these up during our regular member
interactions such that they can be addressed by the Chamber’s working group.

The UK Chamber of Shipping has also offered considerable input into the complex technical negotiations for the forthcoming customs requirements that will come into full effect in July 2022. We are working closely with Her Majesty’s Revenue andCustoms (HMRC) on a continuing programme of webinars and other resources to introduce information regarding these changes.

There are, of course, other challenges that must also be overcome. If we are to meet increased demand for shipping services, our sector must tackle service disruptions and port congestion impacting the industry. These not only impact inland trade services but also impairs our ability to meet industry commitments to decarbonise and reduce fuel use. There is a clear need for improved communication between ports and shipping lines in order to reduce the number of vessels waiting – and the UK Chamber of Shipping is assisting our members with creating systems that work for them.

It should be noted that even with efforts to reduce port congestion and facilitate just-in-time arrival, the resilience of the maritime supply chain is likely to be tested over the coming year or so. New stress points may emerge if there are new variants, and there is always the possibility that shipping will experience unforeseen events – such as the Ever Given containership incident in the Suez Canal in March 2021. The supply chain is tightly connected, and as we improve efficiencies, this brings about additional risk that individual disruptions will have knock-on consequences for the industry as a whole.

Improved communication and closer international relationships are the best means to tackle these threats, and the UK Chamber of Shipping is ideally placed to facilitate these and improve national resilience. We believe that better dataflow and increased IT exchange could allow for greater understanding of what is being carried on ships. This would grant our members the agility needed to utilise other supply options when the supply chain experiences disruption or comes to a halt.

Our Secretariat is working closely with our members to assess national priorities when it comes to the delivery of goods and commodities and to liaise with the government to ensure minimal fallout and maximum efficiency. The UK is not the only country to have a wary eye on a fragile supply chain that has seen a long and hard year, and our global trade partners – as well as industry leaders as a whole – are aware of the risks. We must ensure that a global effort is made to sustain services and systems. After all, we are all in this together and must tackle it in a collaborative manner.