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UK Maritime trade in a time of change

The UK has a long and proud maritime history, and it is safe to say that the British are very much sailors at heart. The British Empire at one time was the largest on the planet and may well have been the largest the world has ever seen depending on how one measures it. A good deal of that dominance can be put down to the UK’s seafaring nature, both militarily and commercially. As the major route through which all raw materials and merchandise are transported, the UK is keen to keep its maritime heritage at the forefront of the industry and this article looks at what is changing and why… Ships, Piping, & Cables

Illustrating how important the sea is to the wellbeing of international trade are the realities that around 90% of all traded goods go by some kind of seafaring vessel, and that the transfer of information across borders as well as the transportation of new energy, occurs through subsea structures such as piping and cables (as discussed by the Rt Hon Anne-Marie Trevelyan MP on the UK government’s website). By the middle of the 21st century, global maritime trade volume is expected to treble. The coming boom in trade is seen as an opportunity to revitalize shoreline communities, consolidate growth, and strengthen ties between nations, all the while adapting infrastructure to the growing environmental demands of the planet (shipping is responsible for around 2.5% of harmful global emissions and is anticipated to increase three-fold by the year 2050).

Currently, ship-building nations are moving quickly to adapt to changes in global trade so that they may maintain their dominance on the world stage. Figure 1 demonstrates vessel ownership across the world and therefore those countries with a special interest in revitalizing their maritime industries. The UK’s Department for International Trade (DIT) is responsible for creating and observing trade agreements between the United Kingdom and the rest of the world, and it encourages export trade as well as foreign investment. As outlined in a recent Board of Trade paper published by the UK government called ‘Maritime Trade, Embracing the Ocean: delivering the trade benefits of the National Shipbuilding Strategy Refresh’, the DIT emphasizes establishing relationships with wider global maritime customers while facilitating maritime propositions for incoming trade investments. New DIT initiatives will look to have the support of the UK Export Finance (UKEF) and UK trade policy, committing it to the open flow of trade, finance, capital data, ideas, and innovation.

Vessel Ownership Globally (according to Info Maritime)

According to Info Maritime, Greece is well placed to be at the forefront of the maritime trade resurgence accounting for nearly 18% of the world’s seafaring vessels. In contrast, The UK, considered to be a nation defined by its seafaring history, can only boast under 3%, a proportion that parallels the US, and perhaps surprisingly, trails behind other countries such as Norway, the Republic of Korea, Germany, France, and Bermuda. Perhaps not so surprising are the prominent positions of China, Japan, Singapore, and Hong Kong, accounting for 11.6%, 11.4%, 6.6%, and 4.9% respectively.

A Case in Point

Parkol Marine Engineering is family-owned shipbuilding, repairing, and renovating business that has been in operation for around 50 years, in boatyards in Whitby and Middlesbrough in northeast England. In 2020, the company was commissioned by D&N Kirwan to construct a 27-meter long motorized trawler in Middlesbrough (and reported on by the UK government on their website). In order to fulfill the request (worth £3 million), Parkol required capital stage payments. Shortly afterward, the coronavirus global pandemic landed when the project was in its design stage. As with many many businesses across the global economy, Parkol were forced to furlough its staff until sufficient safety measures could be applied to protect their workforce. To obtain the guarantees needed to have the boat constructed, Parkol’s bank directed them to a UKEF representative who then worked with NatWest to set in place a series of government-secured payment guarantees - in two different currencies - that enabled work to then go ahead. This then is a prime example of how the UK government is looking to foster maritime-based industry moving into the third decade of the 21st century.

Growing Green

There is an expanding need to incorporate green technologies and policies into the evolution of maritime trade, especially now, alongside the technological advancements being made throughout the industry.

This is a prime opportunity for the UK as it should be able to create high-value jobs in a potentially emerging low-carbon economy. By developing green practices and innovations, the UK can then export them to the world and as a consequence, be at the forefront of the industrial revolution that appears to be enveloping the wider maritime trade industry.

The UK’s Clean Growth Strategy projects that the country’s low-carbon economy will grow by around 11% between 2015 and 2030, some four times more quickly than the rest of the UK, prospectively accounting for between £60 and £170 billion in export sales by the year 2030. A robust and strapping market seems imminent but that isn’t to dismiss other countries and regions in the world that also have designs on leading the way in this area…

At the beginning of January this year, Seatrade Maritime News reported on the fact that the ports of Los Angeles and Shanghai had announced plans to establish a green shipping corridor for transpacific trading.

Partnering up with the C40 Cities network, the two ports – along with other partners and parties – are keen to develop a ‘Green Shipping Corridor Implementation Plan’ to be in operation by the end of 2022. Primarily, the plan is aiming for the phasing out of vessels that release larger amounts of carbon into the environment, and replace them with low-carbon fueled ones, and, with the first zero-carbon producers in operation by 2030.

Shanghai is considered to be the world’s largest shipping container port compared with the US’ largest continental gateway port of LA. The plan is intended to make environmentally sustainable, one of the busiest maritime trading routes in the world, and is a showcase for how other countries are working together toward sustainability in business. In other quarters, at the tail-end of April this year, Steel Times International reported on how a global consortium of mining and shipping companies – headed by the Global Maritime Forum (GMF) – had signed a letter of intent to assess the developmental possibilities of a green shipping corridor for iron ore between Australia and East Asia. The GMF itself is a non-profit organization that is committed to revolutionizing global sea-going trade for the purposes of sustainability, financial opportunity, and human wellbeing. Another example then, of interested groups looking to be at the forefront of maritime trade.

If the UK wishes to remain a leader in the sector, it seems there isn’t a minute to lose. And of course, standing with one hand on the shoulder of all of this innovation will be the finance industry, forever ready to supply the sector with funding in order to keep the machinery well-oiled and moving.

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