Freight News

Ports must look to a post-oil future says UKMPG report

[ December 13, 2021   //   ]

UK port freight volumes are forecast to bounce back from the Covid pandemic to 2026, according to a five-year outlook for the sector by independent maritime research consultancy Drewry for the UK Major Ports Group (UKMPG).

At the same time, it says, decarbonisation of the UK economy has been accelerated and will play a greater role in the future.

After suffering a 9% fall in volumes in 2020 versus the pre-pandemic level in 2019 and a further forecast 5% fall in 2021, most cargo types will see a return to pre pandemic levels in 2022 and into 2023. However, the pandemic and further decarbonisation measures will accelerate the decline in fossil fuel related cargo volumes, which remain substantially lower than pre-pandemic levels at the end of the forecast period in 2026.

These will depress total volumes by 4% in 2026 versus 2019 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 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.

Beyond the forecast period, the 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.

UPMPG chief executive Tim Morris 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 UK trade flowing but also kept investing for the long term.

“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 pportunities from new cargoes and services.”

He added that ports are developing their businesses in higher growth categories like containers and unaccompanied trailers and through investment in activities like green energy and logistics.