The UK marine sector is projected to see growth by 2025 following a period of contraction, according to new research by QBE.
QBE’s latest report noted that the 8.5% decline witnessed by the sector in 2023 marks its most significant drop since 2016, barring the downturn it faced during 2020 due to the COVID-19 pandemic.
Forecasts also indicated another marginal decline of 0.4% in 2024, followed by a slight 0.8% upturn in 2025.
Challenges currently facing the UK marine sector include disruptions to supply chains, according to the QBE report. The world’s largest shipping companies have been rerouting from the Red Sea due to increasing regional tensions, resulting in delays and additional costs.
The industry has also been affected by Brexit and the conflict in Ukraine, which have led to increased administrative burdens and supply chain disruptions.
Shipping firms have been impacted by significant fuel price hikes as a consequence of the Russian invasion of Ukraine in February 2022. Although fuel prices have somewhat stabilised, the industry has had to make tough choices between passing these costs onto customers or absorbing them, potentially leading to reduced demand.
Further complicating the scenario, the industry has been grappling with labour issues and regulatory pressures. Additionally, investment in staff training has remained low, with the QBE report indicating that only 0.2% of labour costs in maritime transport have been allocated to this area since 2020.
Ports have also been affected by high-profile strikes in recent years, leading to reduced port calls and vessel diversions, which have contributed to congestion.
Despite these challenges, opportunities remain for the sector to rebound, according to QBE.
“The UK marine industry has been hit by COVID-19, the Ukraine conflict and now we are facing conflict in the Red Sea,” said Kevin Shallow, director of marine at QBE Europe. “While headwinds are expected in 2024, opportunities remain.”
Shallow emphasised the importance of thorough risk assessments and robust contingency planning for the UK shipping community to minimise risks and aid the industry's return to growth by 2025 and beyond.
“Training, contingency plans and emergency response procedures can all help minimise risk and help the UK’s marine industry return to growth by 2025 and beyond,” he said.
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