Port bosses warn Brexit may cause traffic chaos, but also opportunities

The road network of the south east of England could become choked due to congestion at Dover if there is a hard Brexit, our Ports Development Conference has heard.

Tim Morris, Chief Executive of UK Major Ports Group (UKMPG) – which represents nine of the largest port operators across the UK – pointed out the sector is the UK’s “predominant gateway for trade” with UK ports handling 95% of the country’s goods trade with the rest of the world, including half of its total food needs.

Bob Sanguinetti, Chair of the UK Chamber of Shipping, told the event that the UK’s impending withdrawal from the EU has brought into “sharper focus” the shipping industry’s “very heavy reliance” on cross channel traffic, especially the Dover to Calais route. [emaillocker id=”71749″]

Dover handles 60 ferry sailings and 10,000 lorries per day, more than all other UK ports put together, said Dave Herrod, its Programme Director. They carry goods worth £122bn per annum, equivalent to 17% of the UK total.

The sheer volume of lorries going through Dover means that vehicles must clear the port within three to four minutes of arriving.

Talks to maintain the smooth flow of traffic through the port had been “extremely successful” so far, he said: “If there is a hard Brexit that involves border controls, the expected plan is that that controls will take the form of a pre-travel declaration. The principle is that any physical checks will be carried out off the port so the expectation in the plan is that even in the event of a hard Brexit customer contact will be managed remotely so we will be able to handle a sustainable flow.”

But the risk remains that French immigration service will require checks, Herrod said: “If we have that the eastern dock has such limited buffer capacity that the road network of the south east of England will very, very quickly become choked and that will be our biggest challenge.”

But Dover will cope with the UK’s withdrawal from the EU, he said: “Whatever Brexit throws at us we will be able to handle.”

The industry and government have been looking at alternative cross-Channel options, but established shipping patterns will be hard to shift, said Sanguinetti: “At the end of the day, the market will dictate.”

Julie Tankard, Chief Financial Officer at the Port of London Authority, told the conference that the uncertainties surrounding Brexit is leading haulage operators to examine making greater use of short sea routes rather than relying on ferries.

Justin Atkin, UK Representative for the Port of Antwerp, said that Brexit has prompted shipping companies to review their supply chains: “Cost is important, but security and sustainability of supply chain is as important as cost at the moment. Having a secure energy source is going to be really important for shippers going forward.”

And while Brexit throw up challenges for ports it also creates opportunities.

Richard Ballantyne, Chief Executive of the British Ports Association (BPA), told delegates that the upcoming years may see “subtle changes” in logistics patterns with greater use of short sea routes for freight.

John Chaplin, Director of External Affairs at the Bristol Port Company, said it views Brexit as an “opportunity not a threat”.

Michelle Handforth, Chief Executive of Aberdeen Harbour, agreed: “Changes to the trading landscape after Brexit bring possibilities for all of us.”

And the port sector is in good shape to cope with any fallout from Brexit, having experienced a dramatic expansion over the past two decades.

“Ships scaled up radically in 10 years and ports needed to respond to that,” said Nick Orbell, estates manager of DP World London, which opened its new container port at London Gateway in 2013.

Ports remain a good bet for investors, he said: “It’s relatively predictable given that it is predicated on economic performance and opportunities for major investors are relatively limited because we been through major growth in the last ten years.”

Morris said that the sector attracts around £600m of capital expenditure per annum with little to no call on government funding, and ports are popular with institutional investors like pension funds, said Ballantyne: “For the most part ports have found it fairly straightforward to raise money.”

But Orbell predicted that next ten to twenty years won’t see a big new container terminal.

The conference heard that Bristol’s plans for a deep-sea container port, which received consent in 2010, are still on hold.

Chaplin said: “There is over capacity in the UK market and until Brexit is sorted out, we will have to wait and see.”

However, Ballantyne expressed confidence that the ports sector’s growth prospects are good. The cruise business is booming while ports have a central role in delivering big infrastructure projects, like the Hinkley Point C nuclear power station in Somerset.

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