A new report on the UK’s exporting businesses, commissioned by Heathrow Airport, has found a “shortage of exporting skills” and the complexity of customs procedures are limiting the nation’s potential.
The Exporting Excellence report also highlights sustainability as a key concern for exporting UK businesses, as it concludes that putting sustainability “at the heart of trade and export policy” should be part of a strategy to “maximise the UK’s strengths and counter its weaknesses” on global markets.
Sustainability struggle
The issue facing many exporters looking to decarbonise their business, the report suggests, is simple: cost.
Informed by a series of roundtable discussions with business from across the UK, the report suggests that, though many would like to become more sustainable, this desire is often crowded out by more urgent concerns around building a strong exporting business.
“I would prefer to use to use more sustainable mechanisms for exporting,” one roundtable participant said, “but ultimately the bottom line wins out.”
One proposal in the report is to make it easier for businesses to work with freight forwarders who use sustainable aviation fuel (SAF) in their air freight operations.
Last month, Virgin Atlantic launched the first transatlantic flight powered entirely by SAF from Heathrow, which prime minister Rishi Sunak called a “major milestone” in sustainable flight. Virgin Atlantic’s chief executive, however, said there is “simply not enough SAF” and that large-scale investment was needed to ramp up production.
Customs conundrum
The report also highlights that the UK’s exit from the EU has created a more complex customs environment for the country’s exporters.
A “considerable amount of additional paperwork” has meant businesses are required to “devote more staff time to ensure compliance” with a host of new rules, while delays at customs can have cash flow implications.
One firm who took part in the discussions for the report was KC Group Shipping. Managing director, David Milne, suggests there is a “huge gap in tailored training for those new to the industry” and even for “seasoned freight forwarders”.
Milne adds that “education is the cornerstone of excellence in logistics”, and points to the firm’s decision to establish its own Learning and Development Hub.
The report concludes that incentives must be put in place “to get export skills to take off”, and that “a collective effort is now required between government, business groups, policymakers” and others across aviation and export.
Digitalisation dilemma
The UK’s steps towards digitalisation of trade are predicted by the government to save businesses £190m on imports alone, the report notes, but discussions with exporters found that many “regard the concept of digitalisation as a burden rather than an opportunity”.
A “greater push towards an entirely paperless system” would make things easier for businesses, as would progress on an ‘ecosystem of trust’, where the extraction of data earlier in supply chains would limit the amount of information required from exporters.
Other “needless barriers” to trade include the rescreening of previously scanned cargo, the report adds, and simplification through exemptions to this requirement for cargo that has been “securely trucked” to a UK airport would make for more efficient border operations.
Exporting excellence
The connectivity provided by airports like Heathrow, the report says, is crucial to the success of the UK’s exporters by giving them “access to global markets”.
Advanced air cargo infrastructure allows businesses such as the East Midlands’ RISA, an international freight forwarder, to export high-value goods. Sara Hutchinson, the company’s managing director, said Heathrow’s “strategic location” has facilitated its “global expansion”.
The Exporting Excellence report highlights the importance of exports to the UK economy, with 23% of the country’s full-time equivalent jobs supported by them. Yet it is not only goods – whether shipped by air or sea – that make up those exports.
A recent report by the Institute of Export and International Trade (IOE&IT), in conjunction with Flint Global, highlighted the importance of airport connectivity to the UK’s service export potential. Global horizons: realising the services exports potential of UK nations and regions, demonstrated the importance of improving regional connectivity as one of the key routes to boosting service exports from across all parts of the UK.