The UK's maritime sector

The UK maritime sector includes port facilities, the shipping fleet, maritime business services, engineering and the leisure marine sector. Maritime UK, trade body for the maritime industry, reported that the sector directly contributed £17 billion to the economy in 2017 and supported 220,000 jobs.

Looking only at shipping, the sector contributed £6 billion to the economy in 2020 according to the Office for National Statistics, accounting for 19% of the transport industry.

The UK register has been declining in size for several years. As measured by Gross tonnage (a measure of vessel size) for all merchant vessels over 100GT, the UK Ship Register (UKSR) fell 5% to 10 million GT at end December 2020. In 2020 the UKSR declined for the third year in a row, and is now 38% lower than the previous peak in 2017. The DfT suggest that the recent decline in UK-flagged ships may be due to uncertainty around Brexit, as well as longer-term commercial reasons for ship owners to register with ‘open’ flags states such as Panama or Liberia.

This briefing paper presents further information on some of the current issues facing the UK maritime sector:

• Global shipping costs are at a historic high. The World Container Index, compiled by Drewry, a maritime research and consulting firm, shows that costs were 351% higher at the end of August 2021 compared with a year ago. The index for a 40ft container reached $9,820 at the end of August compared with a five year average of $2,260. A combination of supply and demand factors, primarily related to the Covid-19 pandemic, have contributed to this very sharp increase in shipping costs since mid-2020.

• Decarbonisation of the sector as part of net zero targets: In 2021, the Government announced that it would, following advice from the Climate Change Committee (CCC), include international aviation and shipping emissions in the UK’s net zero target, and in its carbon budgets, for the first time. The Department for Transport published ‘Decarbonising Transport: A Better, Greener Britain’ in July 2021, which set out several actions regarding maritime emission.

• Ship-building and naval procurement: The Ministry of Defence (MOD) will publish an update to its 2017 National Shipbuilding Strategy later this year. The MOD’s new defence and security industrial strategy (published in March 2021) laid out the UK’s ambition to develop a “continuous shipbuilding pipeline” that will “drive sustainable growth throughout the UK’s shipbuilding supply chain.”