Strong start for air freight, but trade wars could start a downdraught
Growth, growth, growth. The start of 2018 has been strong in air cargo – but there ...
Brexit, the rising tide of protectionism and other geopolitical changes will present opportunities for adaptable companies, according to trade experts.
“Brexit is a leap in the dark,” said Garry Honey, founder of Chiron Risk at this week’s Cool Logistics seminar on the impact of Brexit.
“The UK is going into negotiations in a very weak position and telling 65m people not to worry.”
But he added: “Risk is not necessarily a bad thing. A lot of people thrive on it – investment bankers, gamblers, bungee jumpers. Risk-averse cultures don’t grow, they stagnate.”
And trade will always find a way, Wolfgang Lehmacher, of the World Economic Forum, told delegates at the World Cargo Symposium this month.
“Business is used to dealing with bumps in the road. And we are living in two different worlds. On one side, there is a move back to protectionism and trade barriers. But there are other parts of the world, Africa and Asia, that want to open up to the maximum to enable trade. I see a lot of opportunities looking east.
“We shouldn’t overestimate geopolitics in business. There are countries with significant geopolitical difficulties which are very good trading partners. The secret of business lies in understanding customer requirements.”
Mr Lehmacher added that if, for example, the US put high tariffs on certain goods from China, the goods would just flow from elsewhere.
“Business will adjust,” he said.
And flexible shippers could even benefit, according to Nik Delmeire of the European Shippers’ Council.
“There are different ways of looking at protectionism. Shippers can seek out the free-trade zones. You can earn a lot of money as a shipper if you watch where the duties are, and move production.
“Companies watch this all the time. Protectionism is both a threat and an advantage, and you can move production to benefit. You can switch from one production line to another as easily as changing underwear.”
One of the impacts of Brexit will be a change in regulations, which BIFA has warned must not become too complex for companies.
“In the run-up to the UK’s eventual exit we will be working with government to try to ensure that the movement of the UK’s visible import and export trade does not become overburdened by over-complicated trade procedures,” said director general Robert Keen.
“Clearly there are significant areas of concern for our members, which are responsible for much of the physical movement of that trade, over the eventual outcome, including the physical infrastructure, trade arrangements and Customs practices that will be reviewed as part of the Brexit negotiations.”
He also urged companies not to listen to “pundits offering solutions when, in reality, nobody really knows what is likely to happen”.
Mr Honey told companies to heed Voltaire: “Uncertainty is an uncomfortable position; but certainty is an absurd one.”