Brexit: short sea shipping

09/04/2018

Recalling the recent story about Irish shipping bypassing the UK, it was quite significant that the three UK papers which lifted the story from the Financial Times all took a similar line.

The most strident version was the Express, which headed its story "Brexit Punishment", while the latecomer of the trio, The Sun accused European shipping companies of "plotting to bypass Britain when trading with Ireland after Brexit".

The thrust of the story was that ferry company CLdN SA was preparing to deploy its newly-built, giant ro-ro ferries, the Celine and the Delphine on the Rotterdam-Zeebrugge-Dublin route, by-passing the UK route to the continent via Holyhead.

The tone of the media reports is sadly all too typical of the way Brexit is being treated, a tone that is generally inappropriate and, in this case, more than usually so. Virtually aspect of the reports is either wrong or misleading.

In the latest of my own reports, I remark that this development marks an opportunity to route trade from Ireland directly to the Continent, bypassing the UK, but I also note that transferring traffic from the roads to shipping is part of a long-term European Union programme.

The generic title of this programme is Motorways of the Sea, initiated by the Transport White Paper of 2001 – long before Brexit was even close to being a realistic proposition.

The ultimate objective of the "Motorways of the Sea" (MoS) project is to integrate so-called short-sea shipping into the Trans European Transport Network (TEN-T) so that it encompasses all modes of transport. The intention being to reduce road traffic and replace it, where possible, with more efficient sea transport. To date, just short of €2 billion in EU funds has been spent on MoS projects.

The budget for the MoS comes from another, altogether more ambitious programme called the Connecting Europe Facility (CEF). It is described as "a key EU funding instrument", to promote growth, jobs and competitiveness through targeted infrastructure investment at European level. It is also expected to help promote "the transition to a low-carbon and climate- and disaster-resilient economy and society".

CEF comprises three elements: energy, telecom and transport - with a total budget of €30.4 billion running from 2014 to 2020, of which €22.4 billion is allocated to transport. And it from this fund that there has been EU support under the TEN-T programme for the redevelopment of the Port of Dublin.

Specifically, the works encompass the reconfiguration of Alexandra Basin, "allowing for the port to accommodate larger ships and to provide for a substantial increase in capacity through the provision of multipurpose berths for multiple modes". Total cost has been in the order of €221 million, of which the EU contribution is ten percent. Completion is scheduled for the end of 2019, providing the facilities which can handle the Celine and the Delphine.

Now, this is where it gets interesting. The purpose of the funding is, as the programme title implies, to improve connectivity between European (EU) nodes and a condition of the funding is that it involves at least two such nodes. However, since with Brexit the UK ports are no longer in the EU, Dublin must look to other EU ports in order to qualify for EU money.

Thus, by a coincidental combination of circumstances, Dublin Port is gearing up to handle a massive increase in traffic to Continental ports, benefiting from a programme that is part of EU core policy, devised a decade-and-a-half before the EU referendum. Far from intending to "punish" the UK, the programme was put in place and executed without any reference at all to Brexit.

A further indication of the lack of evil intent on the part of the EU (and the Irish) comes in an article in the Spanish newspaper El Mundo. This acknowledges that Brexit could bring disadvantages to the EU – not least, as the European Parliament suggests, a shortfall in funding. But, says the CEO of the state port service, José Llorca, Brexit does not have to limit the Motorways of the Sea – the implication being that lack of funds could curtail ambitions.

Spain has already shown some enthusiasm for exploiting the concept, having in February 2016 sought funding for a link between Gijón in Northern Spain and Saint Nazaire in Western France, thereby reducing road traffic crossing the Pyrenees.

Llorca now believes that, as a result of Brexit, short sea shipping lines could be increased, especially as routes which are currently centred on the UK can be re-routed via Ireland – exactly the idea that I rehearsed in the Saturday blogpost.

With the delays and increased costs arising from border checks when goods pass through the UK, he argues that sea traffic from Ireland will increase. "The motorways of the sea are a real alternative, with lower costs", says Llorca.

Nevertheless, there are those who argue that the EU's programmes to date have not been particularly successful, even though short sea shipping is worth €100 billion and employs 180,000 people, already carrying around 40 percent of the goods traded within the EU.

For the EU, therefore – with funding already in place until 2020 – Brexit could be the impetus which re-activates the programme and gives it a major boost. In so doing, it dovetails with Commission president Juncker's plans for the future of Europe, where a high priority is being given to "connecting Europe".

With that coincidental combination of circumstances again coming to the fore, Ireland could find itself at the centre of the EU's plans to revitalising the economies of the Member States – its plans for by-passing the UK becoming a mainstream policy initiative.

Needless to say, EU plans will no longer include the UK which means the entire island, including its ports and airports, drop out of the Trans-European Transport Network. Crucially, unless we can negotiate joint consultation arrangements, we will no longer be involved in network planning.

Ironically, though, the Connecting Europe Facility Regulation is part of the EEA acquis. If only Mrs May has not decided to quit the Single Market, we wouldn't have to worry quite so much about such problems. But then, doubtless, that is a small price to pay for taking back control.