Lloyd's Loading List: Brexit prompts UK logistics exodus 08/03/19

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Source: https://www.lloydsloadinglist.com/freight-directory/news/Brexit-prompts-UK-logistics-exodus/73897.htm#.XI-fl7jjIuU

Post-Brexit pan-European logistics strategies will gradually shift eastwards away from the English Channel, creating new challenges for shipping lines, hauliers and air freight logisticians, according to Rogier Spoel, air freight policy manager at the European Shippers’ Council (ESC).

As reported in Lloyd’s Loading List, multiple sources report that shippers and 3PLs are planning to shift pan-European distribution hubs and production out of the UK into continental Europe to avoid border delays and increased supply chain costs.

And Spoel said post-Brexit this could increase volume pressure on continental Europe’s air and port gateways as cargo is transferred away from UK ports and airport gateways.

“In the longer term, you’ll probably see more pressure on the Netherlands, Belgium and Germany as the logistics wheel of Europe,” he said.

“Container shipping lines have all been downsizing the amount of calls they’re making,” he said. “Ships are getting bigger, but the amount of calls in Europe are getting smaller because they all sail towards Antwerp, Rotterdam, Felixstowe, Hamburg, and drop off way more containers than they used to.

“An Italian company I know complains that they no longer have any big ships coming there anymore and now need to ship via Rotterdam. After Brexit we could see less volumes for continental Europe arriving through Felixstowe or Southampton, shifting more volumes to the continental ports and increasing pressure.

“When the UK drops out of the EU, the pressure might increase on Rotterdam, Antwerp and Hamburg as the major port of calls for Europe which could hurt Dutch shippers.”

There would also be a gradually migration of EU hub systems away from the coast. “At present, the gateways of Europe are the UK, the Netherlands and Belgium and perhaps western France and Germany, but with the UK leaving, the economic centre of the European Union will gradually shift more towards Germany and the east.”

Spoel, who is also policy manager for ocean and air freight for Dutch shipper body Evofenedex, said this could create more problems for the Netherlands as transit traffic increases.

“It’s actually not that good for the position of the Netherlands which was perfectly positioned between the UK, Germany and France,” he said. “Economic studies have shown how the perfect spot for pan-EU distribution now is near Venlo in the Netherlands, which has the best position within 500km of four major seaports and eight big airports. That’s where many European distribution centres are located, right on the edge of the Dutch-German border.

“But with the UK leaving, you’ll probably see that concentration shift more towards Germany, more towards Frankfurt where the view is that many distribution hubs will in future focus.

“That’s another reason we could also see more congestion here in the Netherlands because of the extra transit traffic.”

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