By Jonathan Saul

LONDON, April 5 (Reuters) – If Britain votes to go away the European Union, the nation’s transport sector faces years of disruption as commerce agreements get reworked and forex volatility results in greater prices at a time when the business is battling its worst world downturn.

Shipping contributes some 10 billion kilos ($14.2 billion) yearly to the UK economic system and straight employs 240,000 individuals in a number of areas together with maritime companies resembling ports, transportation, in addition to ship broking and marine insurance coverage.

As a number of transport segments wrestle with worsening market situations on account of world financial uncertainty, a Chinese slowdown and a surplus of ships for rent, alarms are sounding over whether or not Britain will give up the EU in a June 23 referendum.

Renegotiating commerce agreements with particular person EU nations in addition to the EU itself may take years following Brexit, which might additionally add to the burden on corporations.

“No one has left the European Union before, and the EU may seek to ‘punish’ the UK for leaving, in order to discourage others from leaving too. The Brexit negotiations are unlikely to be quick or easy,” mentioned Guy Platten, chief government of the UK Chamber of Shipping commerce affiliation.

“If it is lengthy, with tariffs and other penalties built in, then the consequences could be profoundly negative.”

John Nelson, chairman of the Lloyd’s of London insurance coverage market, mentioned it was “fantasy” to anticipate bilateral negotiations to be easy.

“It would be impossible to do that except over many, many years,” Nelson informed Reuters.

Legal consultants mentioned there have been additionally prone to be issues over business paperwork.

“If existing contracts are drafted in a way that presumes the existence of an EU containing the UK, or makes a reference to the EU without specifically defining what that is, such contracts may give rise to disputes as to the meaning or ambit of the contract,” legislation agency Ince & Co mentioned in a notice.

Potential forex turmoil may additionally hit port operators on condition that over 40 p.c of general transport visitors passing by terminals in Britain is with EU nations.

“The exchange rate could have some impact on trade and therefore on the volumes handled by the UK ports,” mentioned Joanna Fic, senior analyst with rankings company Moody’s.

“If sterling weakens, imports become more expensive. Given imports account for a larger chunk of movement of goods through UK ports, you could see some implications for domestic demand.”

Leading operators Associated British Ports and Peel Ports declined to remark. Scotland’s Forth Ports mentioned it will “work within the outcome of the referendum”, declining additional remark.

SINGLE MARKET

Britain’s Transport Minister Robert Goodwill informed Reuters the transport business had benefited from the EU’s single market, which had introduced fairer competitors between transport corporations working in Europe, minimize prices for freight shippers and eliminated customs duties for UK shippers buying and selling inside the bloc.

That view was echoed by the City of London Corporation, which runs the one world monetary centre to rival New York and final month formally backed Britain staying within the EU.

“At a time of increasing competition in shipping markets, we want businesses in the UK to be able to keep their eyes strictly on doing business and not worrying about what ifs and a level of uncertainty,” mentioned Jeffrey Evans, lord mayor of the City of London and a senior director with ship dealer Clarksons.

Britain ranked within the high 10 of world ship-owning nations as of January 2015, in accordance with the newest report by U.N. commerce and financial assume tank UNCTAD. The UK accounted for practically 3 p.c of the world complete or simply over 48 million deadweight tonnes, versus over 16 p.c or 279 million dwt held by Greece, the No.1 ship-owning nation, the UNCTAD report confirmed.

Danish transport firm DFDS, which has lively enterprise operations with the UK, mentioned it was higher for Britain to remain within the EU given the potential impression on the broader bloc.

“We are concerned that Brexit will bring about a prolonged period of uncertainty which could in itself be negative for investments, trade and growth,” DFDS Chief Executive Niels Smedegaard mentioned. ($1 = 0.7049 kilos) (Additional reporting by Carolyn Cohn; Editing by Veronica Brown and Dale Hudson)

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