By Daniel Hunter
A major new study by RSA, the UK’s largest commercial insurer and one of the world’s leading marine insurers, and the Centre for Economics and Business Research (CEBR) reveals that Britain’s booming sea trade is worth a staggering £513bn - growing 32 per cent in a decade to represent the equivalent of a third of Britain’s GDP.
The RSA Shipping Forecast is a unique study of long-term shipping trends, tracking its importance to the UK economy and modelling predictions for future growth. The research reveals that the value of UK sea trade grew at twice the rate of the British economy over the past decade1, and that this growth looks set to continue reaching over £700bn by 2017 — a 37 per cent rise in just six years.
“This rapid rise in the value of goods shipped in and out of our ports represents a real renaissance for maritime Britain," Anj Chadha, Global Cargo Development Manager at RSA, said.
"Shipping is of vital and growing importance to the UK economy, and valuable cargos must be protected at all costs with such a significant proportion of our economy literally ‘at sea’.”
The study also examines the relative status of the UK’s sea trading partners over the past decade, revealing a ‘super swap’ as Asia has overtaken North America as Britain’s second most valuable trading bloc.
The value of goods shipped between the UK and Asia and Oceania grew by almost a quarter (23 per cent) over the past decade — totalling £112bn in 2011 — while trade with North America fell by nearly the same proportion (19 per cent). Europe remains Britain’s largest sea trading alliance, with imports and exports to and from the Continent representing almost two thirds (60 per cent) of total maritime trade.
Looking ahead to the major growth regions for future trade, The RSA Shipping Forecast predicts a massive boom in South American and African sea trade. Shipping to and from South America is expected to rise in value by over two thirds (68 per cent) by 2017, while trade with Africa is anticipated to rise by almost half (43 per cent) in the same period. Sea trade with Asia and Oceania is also expected to see continued growth, increasing in value by 39 per cent over the next six years.
“Piracy, political disturbance, underdeveloped ports and natural disasters all place valuable cargos in jeopardy when trading with emerging economies, risking costly supply chain interruption," Chadha added.
"But with risk comes opportunity. Burgeoning middle classes in these regions are hungry for Britain’s luxury cars, fashion, pharmaceuticals, food and alcohol. Port infrastructure challenges present good prospects for the UK's Engineering Industry, and as London is the centre of the global cargo insurance and ship broking markets, our financial services sector also has potential to benefit.
“In order to safeguard the UK’s future economic health, it is vital that we continue to forge strong sea trading ties with these rapidly growing economies. However, understanding and mitigating the significant risks presented by trading with underdeveloped regions will be crucial to realising these abundant opportunities.”
Join us on