Second Quarter 2020 Trade Figures Lift Veil On Rough Months For UK Freight Industry, But No Crystal Ball To Determine Future Outlook

The UK’s Q2 port freight statistics from the Department for Transport released today have shone a light on the impact on trade at the height of the pandemic.

When comparing April to June 2020 with April to June 2019 through the UK’s major ports:

  • the total volume of freight tonnage decreased by 18% to 96.1 million tonnes
  • the total volume of unitised traffic, goods transported by containers, trucks and trailers, decreased by 44% to 3.2 million units

Today’s figures fill a gap in data on the trade impact brought by the pandemic – previous DfT figures only told the story up to March – capturing the initial drop in tonnages and units handled by UK ports, where we saw a fall in volume of 6% compared to Q1 2019. Ports and shipping facilitates 95% of the UK’s physical trade so these provisional figures are a good indicator of economic performance.

News that the volume of freight tonnage decreased by 18% and unitised traffic dropped by 44% in Q2 confirms what the industry already knew; that the pandemic brought severe disruption to trade flows and demand in the economy.

Commenting, Phoebe Warneford-Thomson, Policy and Economic Analyst, at the British Ports Association said:

“The dramatic fall in unitised traffic during this period is not surprising, as containers and freight carried by trucks are a good barometer of the performance of the overall economy. This fall represents a decline in finished goods bound for the high street as well as raw materials for manufacturing sites; both of which largely suspended operations during the lockdown.

However, the 3.2 million unitised units throughout the three months highlight that ports have continued to supply the country with essentials for the pandemic, including supermarket goods, medical products and PPE. Furthermore, certain areas, such as timber goods for DIY in homes and gardens performed well, and items such as toilet rolls, where there was an abundance of demand for both finished products and raw paper pulp supplies.

In the months since June, which we do not yet have official figures for, ports have maintained resilience – as they have throughout 2020. While trade flows may not be at 100% levels, we are seeing some return to normality.

This is echoed in the recently published passenger arrival figures from Border and Immigration Transaction Data released by the Home Office, which shows a decimation of international visitor numbers. This represents a significant fall in sea passengers, with a -97% drop in arrivals in April compared to the previous year, which improved to -67% in July. While this remains a vast decline from usual numbers, maritime was the first to see recovery and the sector is seeing a gradual increase in arrivals, especially compared to aviation, where arrival numbers remained at -90% in July 2020.”

Unfortunately, there is no crystal ball to inform us what is coming next for the ports sector and UK trade.

Previous analysis by the BPA indicated that ports may be increasingly busy as we approach the end of the transition period. In the fourth quarter of 2018, as we approached the original Brexit deadline of 29 March 2019, UK ports saw an exceptionally high growth of 6% in port freight tonnage, which was consistent with suggestions that UK manufacturers were ‘stockpiling’ inventory ahead of expected trade disruptions. It has been suggested that any reserves that might have been accrued by businesses through this ‘stockpiling’ have now been used as a result of the pandemic. No doubt, ports will once again play a vital role in preparing British industry for Brexit and they may see a similar increase in tonnage in Q4 of 2020 ahead of border changes from January.

However, during this period of recession and the ongoing pandemic, combined with news of pinch-point trade talks and the looming possibility of no-deal, international trade flows into Britain may be set further disruption.

We are therefore asking the government to provide stability and certainty in these turbulent times.

Further analysis of these figures will be included in the BPA dashboard for members at the end of this month.