Brexit – unexpected result for the OMB shipping & transport sector

A majority of voters in the 23 June 2016 referendum called for the UK to leave the EU. Our OMB survey, conducted before the referendum took place, returned the opposite result: the majority (61%) of OMBs in the Shipping and Transport (S&T) sector did not think Britain should leave the EU – a result closely aligned with the views of OMBs generally (60% of the total survey sample).

OMBs that wanted to stay in the EU said there was “too much uncertainty as to the other options” and that a Brexit would “cause massive reduction in business opportunities at least for the first few years after exit.” Several OMBs felt UK trade would be damaged. One said it was “essential to remain within the EU for the continued stability of our businesses.”

Another had noted that the UK was an “important bridgehead for overseas investors and this might diminish if the UK is outside the EU.”

Another 18% of S&T OMBs  had not yet made up their minds by the time of our survey, but 21% of S&T OMBs did want Britain to leave the EU (compared to 17% of all OMBs surveyed). They gave reasons such as the desire to “remove the Brussels red tape stifling businesses,” gain “more control over our borders” and address “the movement of unskilled labour into the UK.”

Some criticised EU bureaucracy and inefficiency and one thought the money saved by no longer
contributing to the EU could be usefully invested in health, education and other public services. One OMB noted: “The EU exports more to the UK than the UK exports to the EU, therefore the EU needs the UK more than the UK needs the EU.”

How Brexit could impact OMBs
When surveyed before the June referendum, S&T OMBs were less likely than OMBs generally to think that leaving the EU would have some negative impact on their business – 29% doing so, compared to 46% of OMBs surveyed overall. Reasons given included an expected negative impact on European subsidiaries, disruption to trade contacts, a loss of free movement within the EU, and an unfavourable reaction to Brexit from US clients and pipeline prospects.

The majority (61%) of S&T OMBs thought that Brexit would have no impact on their business, compared to 49% of OMBs overall. Little exposure to or trade in Europe were typical reasons. As one S&T OMB
commented: “Shipping companies work worldwide.”

These findings reflect the international nature of the S&T sector. S&T OMBs are operating in a market that crosses many borders, not just intra-EU ones, reducing their sense of dependence on the EU area. The international nature of the S&T sector is also underscored by the fact that only 32% of S&T OMBs said that they employed no one originating from mainland EU countries – compared to 50% of OMBs overall.

“Certainly in the shipping sector, businesses may be UK based, but they definitely are not wholly British staffed,” says Richard Greiner. “The profile and reputation of a business is strongly linked to having a competent workforce who can practice their chosen expertise, regardless of the countries they are drawn from. Ready access to a large pool of skilled labour is a significant benefit of
being inside the EU.”