Brexit – the shipping industry reacts

remain topped

Given that so many in shipping were firmly behind ‘Remain’, the news that the United Kingdom will leave the European Union has prompted strong reaction. IHS Fairplay collected many views from across the industry:

International Chamber of Shipping

“ICS takes no view on what is a political decision by the UK people. It is simply too early to know whether the overnight volatility in global stock markets will be a short- or longer-term trend, or will have meaningful impacts on worldwide trade growth. But the global shipping industry, which is the servant of world trade, will clearly be watching developments with a very close and direct interest.”

Anthony Woolich, Holman Fenwick Willian

“Today’s vote to leave does not automatically mean the EU treaties will no longer apply in the UK. The process will begin with the UK Government discussing and ‎deciding when to notify the European Union in accordance with Article 50 of the Treaty on the European Union. The exact timescale is unclear, however the Government has indicated it will be made rapidly.”

The Baltic Exchange

“The marketplace for shipping is global in nature, and the Baltic Exchange plays a leading role in service of this marketplace. The UK’s vote to leave the EU is not material to the potential SGX transaction, nor do we envisage it playing a major impact on the ability of UK maritime services sector to serve global trade.”

Greig Macpherson, Vantage Shipping Lines

“Whilst the current leadership vacuum exists in the UK, we should all expect a degree of uncertainty and confusion over the coming weeks. However, we expect the shipping industry to ride the storm and carry on as normal.

Shipowners and charterers have dealt for millennia with division, walls, wars and trade embargoes but the industry just keeps on delivering throughout them all, as it must.

“The only real concern at this time is the continued freedom of Greek shipping companies to be able to open, staff and run representative offices in the UK without additional punitive or restrictive measures, as have been muted in the build up to the referendum.

“Shipping in London is now principally in the area of services to the industry, such as legal, insurance, broking etc., and the execution of those services should not be directly affected by Brexit.

For now, it is basically business as usual and we would go so far as to predict that the next Cabinet would be more than sympathetic towards protecting the rights of Greek shipowners to be able to staff their UK offices as they see fit in the years leading up to and after Brexit.”

Chris Shirling-Rooke, Mersey Maritime

“Mersey Maritime remains optimistic for the continued growth of the maritime sector in the UK.  Through what will undoubtedly be a period of uncertainty now for the Liverpool City Region’s marine and maritime sector –  and indeed the wider UK  maritime industry  – Mersey Maritime will absolutely continue to provide support and guidance to the businesses whose interests we represent, as we have done very successfully for the past 13 years. There’s a confidence in the maritime sector, in the ability of this sector to continue the growth that we have seen in the past few years, that Brexit won’t undo. In many respects, it will therefore be business as usual for Mersey Maritime, assisting, supporting and guiding our members and building the strength of the cluster in any way that we can.”

Robert Keen, British International Freight Association

“BIFA is a neutral body and will now be looking at the ways in which we can support our members as the forthcoming legislative changes become apparent between now, the day that the UK formally triggers the resignation process and the date the country’s exit becomes effective.

“Today the UK is still a member of the EU and it is too soon to start speculation on the outcome of two years plus of negotiations regarding trade deals and movement of goods.

“We will be making sure that those undertaking the negotiations recognise the fundamental role that our members’ freight forwarding services, including customs processing, play in underpinning the movement of the UK’s visible trade with Europe.”

Dave Matcham, International Underwriting Association

“Clearly the UK’s decision to exit the European Union presents challenges for London Market companies and uncertainty surrounding the potentially prolonged nature of this process will be problematic for future planning. Our industry is, however, experienced in responding to change.

“The free trade benefits of EU membership have been vital in maintaining London’s position as a global insurance hub and are highly valued by IUA members. This is true both for insurers headquartered in the UK and those international firms that use London as their centre for European business.

“We know that many companies will now be considering their own individual responses. Continued access to European markets is essential and will, I expect, be at the forefront of the process to respond to the referendum decision. The IUA will be working with the London Market Group to ensure our industry’s views are fully represented as developments continue.”

UK Chamber of Shipping

“What we need now are cool heads. We’ve had the political debate, now it’s time for rational and strategic thinking.

“The rest of the world beyond Europe has experienced significant economic growth, and a key argument by the Vote Leave campaign was that the UK would be able to quickly sign free-trade deals with trading partners around the world. Government now has to act quickly to ensure that happens.

“Leaving the European Union is a process, not an event, and that process has to be managed carefully.  David Cameron’s decision not to immediately invoke Article 50 is a welcome one, and there should be no rush to do so for his successor. First we must get our chess pieces in place.

“We believe that Government should establish a new Free Trade Commission, working across the Department for Business and the Foreign Office, to train trade negotiators and begin the process of establishing new trading ties around the world and be ready for the negotiations with the remaining members of the EU.”

Peter Karlsen, Norbulk Shipping

 “The shipping industry in the UK will view the referendum result negatively as does most big business. It is a potential disruption to trade, movement of goods, and labour. We are  facing years of complex negotiations to divorce ourselves  from the EU.  The UK, as a centre of excellence for shipping services, will continue. Whether it remains as attractive to foreign investors or entrepreneurs, especially from the EU to establish and conduct business here, is  uncertain. As our Prime Minister David Cameron said ironically  this morning ‘he would attempt to “steady the ship,’ we won’t know for sometime what the real effects are.”

Harry Theochari, global head of transport, Norton Rose

“This firm has not yet formulated a formal position but I can give you my personal view. In short, I am extremely concerned about the result. My greatest fear, which I know is shared by the City of London, is that ‘Brexit’ may well result in a number of leading international banks and financial institutions either moving their offices from the United Kingdom or locating their head offices away from the City of London to another location within the EU. A number of such banks and financial institutions have indicated that this may well be the case.

“A parallel concern would be the effect that a Brexit would have on the United Kingdom’s maritime services. A recent report prepared by PWC for the City of London confirmed the continued global pre-eminence of the United Kingdom’s maritime services sector. The concern is the impact that the departure or geographical refocusing of major international banks and financial institutions would have on the insurance, brokerage, legal, and accounting services which are provided by the United Kingdom, and in particular the City of London, to the global maritime industry.”

Taco Van der Valk, AKD Rotterdam

“This is non-binding referendum, so could be spun in any direction like in my country [the Netherlands]. And In with op-outs or Out with opt-ins may very much mean the same thing and there is the cost of renegotiating the whole thing. But I am sure competing maritime hubs will not be displeased. And lawyers.”

Richard Fulford-Smith, managing director Affinity

“The great British public has voted. I am not proud to be British with an electorate here that did not understand what this vote was really about. My faith in democracy is undermined when people are allowed to protest vote about issues with unknown consequences.”

Nicholas Marshall, Commercial Director, The Armitt Group

“Shipping is a global business and 80% of the world is outside of the European Union. Volatility in the markets will stabilise and the exchange rate is more critical than tariffs. German manufacturers are already raising concerns about imposing tariffs on the UK. The UK is an island, and while we continue to eat, drink, and keep warm, base commodity shipping will continue.”

Nigel Cleave, CEO of Videotel

“As Videotel invoices in sterling it will mean an immediate 10% discount for all our worldwide clients in US dollar terms.”

Patrick Verhoeven, secretary general of European shipowners’ body ECSA

“Britain’s departure from the European Union should not pose a question regarding its membership of ECSA, given that Norway, which had also declined EU membership, is a member.”

Source: IHS-Fairplay

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