BRITAIN's decision to exit the European Union in the "Brexit" referendum on June 23 is expected to have little impact on container shipping, says Alphaliner.
At only 1.4 per cent of global container volumes, the country's market share in terms of port throughput had been steadily decreasing for over a decade, down from three per cent in 2000 to a low of 1.2 per cent in 2013. The nation's ports handled an estimated 9.7 million TEU in 2015.
The UK's share of European container throughput has fallen from 13.9 per cent in 2000 to 8.9 per cent in 2015.
The country's decline as a maritime centre for the container shipping sector had started long before decision to exit the EU. UK-flagged containerships currently account for only 3.7 per cent of global vessel capacity, while UK-controlled containerships account for 2.2 per cent of the global fleet in TEU terms. Capacity operated by UK carriers stands at 0.2 per cent.
In the short term, UK imports are expected to be negatively affected by the strong depreciation of Stirling against other major currencies that was caused by the Brexit vote. This will mainly affect imports from Asia, and it will put additional pressure on the fragile recovery of the Asia-Europe trade.
According to CTS data, total container volumes from Asia to North Europe rose by 2.7 per cent in the first four months of the year, with UK volumes estimated to account for 15 per cent of the trade total.
The Brexit vote could raise the cost of capital for containership owners. While the UK shipowners' exposure to tightening credit conditions is limited, as they account for only 2.2 per cent of the global containership fleet capacity, the impact on other European owners could prove to be more significant as the latter group accounts for 54 per cent of the global capacity.
Source : HKSG.