The UK export industry is in as strong a position as it has been for a number of years, with trade values up 25 per cent year on year. And the timing of this renewed vigour in exports could not be better, as the UK economy looks to reposition itself on the world stage post-Brexit
Fittingly, most of the new opportunities seem to be springing up from beyond Europe. Although UK overseas trade is still heavily weighted towards imports, with a balance of payments deficit of £156.2 billion last year, exports to non-EU countries have been growing steadily for the past decade.
Going forward, strengthening the domestic manufacturing base is viewed by many as essential to ride out whatever uncertainties the eventual departure from the EU will throw up. But rather than just battening down the hatches and hoping for the best, UK manufacturers have a once-in-a-generation opportunity to ride the waves of the global market and seek their fortunes on distant shores.
The question is how to capitalise on that potential.
The EU has come to dominate UK international trade, accounting for 44 per cent of all exports. Those relationships will not disappear overnight, but they will change, as the UK will no longer be in the same trade club as its partners of the past 40 years. Looking for new opportunities to mitigate the impact of changes in our relationship with Europe is at the very least prudent.
Where those new opportunities lie will vary from sector to sector. In general terms, analysis by BMI research predicts that exports to emerging markets, spearheaded by China and India, will grow steadily each year to 2025. Sales to the EU will decline, while trade with the US, currently the UK’s biggest single export market, will flatline. The increase in trade with India in particular could approach 90 per cent, while other markets tipped for strong potential growth include Indonesia, Pakistan, Bangladesh, Vietnam, Kenya and Nigeria.
Documentation and finance
One of the biggest challenges facing manufacturers when exporting to new markets is handling all of the documentation and red tape involved, especially when it comes to finance. Not only can this work be time and resource intensive, it can also throw up practical difficulties such as impact on cashflow extended gaps between production and payment can have.
The simplest advice is, you don’t have to take it all on yourself. Specialist freight services can help you with things like letters of credit and invoice financing, which can be time consuming to arrange but provide vital security and assurance in the extended supply chains exporting creates.
Transporting goods overseas for export inevitably means outsourcing key goods handling and logistics operations to agents based in the countries you are trading in. Anyone in business knows that outsourcing should always be made on the basis of thorough due diligence to ensure potential partners are reliable, competent and trustworthy.
Carrying out these sorts of background checks in distant countries, in markets you are not familiar with, is not always easy. Again, this is an area where freight carriers and service providers can help, sharing their expertise to offer independent, objective advice on your choice of partners.
Alliance Shipping Group is a leading provider of blue chip sea and air freight services worldwide. For more information, please visit www.allianceshippinggroup.co.uk.