UK shipping exports to be 'turbocharged' with new DIT office as part of £4bn government strategy

Fri 11 Mar 2022
Posted by: Noelle McElhatton
Trade News

International trade secretary Anne-Marie Trevelyan has announced a new exports office to “turbocharge” the UK’s maritime trade sector as part of the government’s £4 billion investment in shipbuilding.

The initiative is part of prime minister Boris Johnson’s promise to bring shipbuilding back to Britain post-Brexit. It is a totemic industry for a seafaring nation but like many heavy industries, it has faded in importance.

(Photo above shows sunset on the River Clyde in Glasgow, Scotland.)

One unit

The new Maritime Capability Campaign Office (MCCO) will unite the Department for International Trade’s defence export and civil maritime capabilities in one unit, targeting export opportunities estimated to be worth up to £600m.

According to the government, the MCCO will work with industry and the National Shipbuilding Office to line up maritime export opportunities for UK firms.

Trevelyan said this would unlock opportunities to export innovative technologies, services and designs.

“Working in lockstep with business, we will build on our world-leading maritime capabilities, strengthening our global reputation as a thriving maritime industrial base and leveraging our strengths in maritime defence and low-carbon technologies.”

30-year UK plan

The prime minister undertook a tour of Cammell Laird’s facilities yesterday (Thursday 10 March) to launch the government’s 30-year plan for shipping, Wirral Globe reports.

A shipbuilding pipeline will produce more than 150 new vessels, investing over £200m in a new UK Shipping Office for Reducing Emissions, and a new Shipbuilding Skills Taskforce.

Johnson told the Globe that “shipbuilding is something that this country has excelled and continues to do so”.

"During my time in office over the years, I've been around the world and people want to buy our frigates, the Type-36s, Type-31s etc. These are a massive UK export,” he added.

£17bn sector

The DIT tweeted that the UK’s maritime industry contributes £17bn to the economy and supported 220,000 jobs in 2017. The UK shipping technology sector is worth £4bn and is expected to grow to £13bn by 2030.

OECD figures claim that global maritime trade is set to treble between 2015 and 2050.

Bumper year for builders

The Maritime Executive reported that 2021 set records, exceeding forecasts after years of slow performance.

Total global volume of new orders for containerships based on gross tonnage was the largest since the agency started tallying the market in 1996. Volume was reported to be about 12 times the total volume of new orders placed during the first three quarters of 2020. 

Global players have posted record profits as shipping costs haves soared during the pandemic and they are rebuilding their fleets:

  • Chinese shipping major Cosco Shipping Holdings has signed an agreement with affiliate shipbuilder Cosco Shipping Heavy Industry Yangzhou for the construction of ten containerships at a cost of $1.5bn
  • Hapag-Lloyd has commissioned the South Korean shipyard Daewoo to build six ships, each with a capacity of over 23,500 TEU. It had already placed an order for six ships of the same size at the end of 2020
  • Industry giant Maersk is also looking to decarbonising its fleets as the sector aims for a greener future. It has announced the order of eight large ocean-going container vessels capable of being operated on carbon neutral methanol

    More than half of Maersk’s 200 largest customers are setting ambitious science-based or zero carbon targets for their supply chains

Far East competition

Global shipbuilding is dominated by companies in the Far East, such as China, South Korea and Japan, who account for 80% of orders, reports Ship Technology.

“We’re not going to compete with the massive shipbuilding nations of China and Korea,” Maritime UK boss Ben Murray told the Telegraph, noting the bulk of the value in a ship is in the systems inside it, rather than the hull.

“The real opportunity is in decarbonisation,” he added.

New UK flagship

According to the Telegraph, a final design for the new £250m national flagship – seen as a replacement for the Royal Yacht Britannia – will be unveiled ahead of the Queen’s Platinum Jubilee celebrations later this year.

The ship will be used to drum up trade around the world.