The good news in the forecast is that most cargo types are forecast to see a return to pre pandemic levels in 2022 and into 2023. However, the report also states that the pandemic, as well as further decarbonisation policy and behaviour measures, shall accelerate the decline in fossil fuel related cargo volumes.
Drewry forecasts that these cargo types shall remain substantially lower than pre-pandemic levels throughout the 2021-2026 forecast period. According to the analysts, this significant fall in oil and oil related volumes equates to a 4% drop in 2026 vs 2019 in tonnes terms, despite increases in other cargo types such as a 13% increase in container and 7% for unaccompanied freight ferry volumes, plus a near term bounce for construction products.
Brexit was also mentioned in the report as having an impact:
“Brexit is also a factor as, despite an element of normalisation, the one-off impact of trade adjustment helps drive a slight shift from EU to non-EU trade volumes and border frictions contribute to the continuing shift from accompanied to unaccompanied freight volumes for EU trade, reads UKMPG’s release.”
Nevertheless, Drewry believes the pandemic, as well as the decarbonisation trend has accelerated during it, has had by far the greatest influence on volumes.
The decarbonisation process nonetheless offers opportunities too in the shape of new fuels and services, as the UKMPG release highlights:
“Beyond the forecast period, this strategic reshaping of the cargo landscape is expected to continue with ongoing challenges for traditional energy products, a significant requirement for port operators to investment in zero emissions infrastructure but also opportunities from new fuels and services, such as hydrogen and carbon capture and storage respectively. Post the pandemic bounce back, the return to a modest aggregate outlook means ports will continue to look to growth sub sectors but also, crucially, volume light activities and services to grow value.”
Commenting on the Drewry forecast, Tim Morris, Chief Executive of the UK Major Ports Group, said:
“There’s no doubt it’s been a challenging period for some freight cargoes. The shocks of the pandemic have compounded long term structural change. But it’s testament to the resilience of ports that they’ve not only kept 95% of U.K. trade flowing but also kept investing for the long term.”
Morris continued:
“Whilst it’s encouraging to see volumes bounce back, ports will need to continue to adapt and invest for the new, increasingly post carbon, mix of freight and cargo. There are challenges both to invest in plant and equipment and in terms of the freight mix itself. But there are also important opportunities from new cargoes and services.”
The UK Major Ports Group Chief Executive concluded:
“Ports are responding to the outlook by developing their businesses in higher growth categories like containers and unaccompanied trailers and through investment in ‘volume light’ activities like green energy and logistics. Across all these developments ports continue to be vital engines for jobs and prosperity, ‘levelling up’ in action all around the UK coast.”
Photo: Les Chatfield / Flickr / CC BY 2.0