Brexit is causing a “huge distortion” in the Irish Sea freight market as hauliers switch from Welsh ports to direct routes to Belfast.
Ian Davies, Head of UK Port Authorities at Stena Line, was today giving evidence to a special Welsh Affairs Committee meeting looking at the early impact of the UK’s exit from the European Union.
He reported Holyhead port was currently around 50% down on last year’s freight figures for the first five weeks of the year.
While this was partly related to economic lockdowns because of Covid and stockpiling there was also a switch away from the port.
This includes additional direct services between Ireland and France but also a move of Northern Ireland traffic from the Holyhead/Dublin routes to UK mainland ports that sail direct to Belfast.
Mr Davies said normally roughly 150,000 of Holyhead’s 450,000 annual freight units are either from or heading to Northern Ireland.
He told the committee: “What we have seeing is a huge distortion in the market currently, and it is quite marked.
(Image: Daily Post Wales)
“Currently in Holyhead port we have two ferry operators, Irish Ferries and Stena Line Ferries, a very competitive market, and both are roughly 50% down on 2020’s volumes.
“I know as a ferry operator in Northern Ireland that ferry routes from Northern Ireland direct to Scotland and to England are approximately 5% up.
“So in five weeks you get this very very marked difference that is happening in the market.”
Part of that reason is a grace period in implementing certain customs checks on goods going between mainland UK and Northern Ireland.
This means less red tape on those routes although this is only designed to be temporary.
He added: “The easiest way to market for a lot of the Northern Ireland companies is through Dublin, it is less than two hours from Belfast down to Dublin, it’s a very easy trade route. It works very well and yet within four or five weeks there is a big distortion in the market.
“Now, is that short term or long term is yet to be seen.
“There is a degree of adaption going on, people are getting used to it and we are seeing a trickle back but that is quite a stark reminder of what’s happening currently in the market and that is putting a big strain on the ports industry and the ferry industry.”
He said the freight disruption was in addition to an 80% fall in passengers last year due to Covid and a 90% fall so far in 2021.
Mr Davies said in the long term it was about giving certainty to the market that trade flows were functioning well.
He said in relation to the switch to Ireland/France services that some operators were going for the “known” because of the certainty even though there were extra costs.
Talking about the impact of Brexit on exporters to the EU, Ian Price, Wales Director, CBI, said: “The costs of transportation have peaked enormously and that is causing huge problems.
“Whether that will drop back again at some point I don’t know, or whether that is what it’s going to be for the future.
“I’ve got horrific examples of how much transporting freight is costing businesses that it wasn’t costing pre-December.”
He said he was aware of a South Wales pharmaceutical company that is moving production to Ireland due to the difficultly exporting their products to the EU.
He told MPs that the UK Government needed to resume talks with the EU about a relaxation in the rules over medicine supplies.
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