Xeneta, a global market intelligence and benchmarking platform for containerised freight, sees a grim outlook for container shipping as a result of the UK’s apparent decision to leave the EU.
One big reason for this prediction is that the shipping industry has already been struggling over the last few years, with overcapacity and tough competition between businesses.
“The last thing the container segment needs is further unpredictability and disruption,” says Xeneta CEO Patrik Berglund, who cites that rates for 40ft containers have fallen 60% in two years.
(Image credit: Jumilla)
Any impact on free trade raises costs but not in a way that anybody in the container supply chain benefits from, Berglund explains. The UK has enjoyed a favourable negotiating position for trade as part of the EU’s “mega trading block”, but is now likely to have to sign new treaties with all other nations from a weaker negotiating position, in all likelihood leading to higher duties and shipping costs.
In addition, logistics networks depend on efficiency, Berglund says, which is impeded by border controls. This may lead to bottlenecking and the need for shippers to consider alternatives.
Brexit, in other words, has added more unpredictability to an already complex and uncertain situation, and it is simply not known exactly how freight rates will be impacted.
(Source: Hellenic Shipping News)