With the uncertainty of Brexit still clogging news feeds across the UK and Ireland, there has once again been some positive news for Dublin. This time in the mould of the Shipping Industry. There has been a marked increase in business as a result of Brexit as many companies are beginning to bypass British ports.
Although it has put some pressure on the shipping lanes and
ports the news has been generally welcomed by those in Dublin and other
Dublin port recently announced that Luxembourg based CLdN ro-ro shipping company has added two new Mega-vessels to its direct Dublin route from the ports fo Rotterdam and Zeebrugge.
A representative of CLdN said: “As a company, we have taken a long-term view on Dublin Port and invested accordingly. Our next generation of Ro-Ro vessels, MV Celine and now MV Laureline, are a testament to that commitment. Since entering the Dublin market mid-recession in 2009, we have grown our direct services from Dublin Port to some seven weekly calls to Zeebrugge and Rotterdam. We believe we are ideally positioned to develop this trade further as a direct alternative to the UK landbridge. Customers want certainty on consignments that can travel on direct routes, even if that means a slower journey time, and our newest addition Laureline is now in place to meet growing demand.”
With such commitment from outside companies and expected investment and growth set to continue, Brexit uncertainty has certainly had mixed results fro Ireland. With the European landbridge becoming less important, Dublin port and other regional harbours are reaping the benefits of direct routes to mainland Europe.
The Landbridge is the transit point linking Ireland and mainland Europe. An estimated 3 million tonnes of goods move through the UK and the landbruidge each year. Currently, more than two and a half times that amount move on direct routes between Dublin and Europe.
This number is only expected to rise.
CEO of Dublin Port Eamonn O’Reilly said: “We’re starting to see alternatives developing, options over the landbridge as people grow concerned about the issue”.
“We’re starting to see faster-moving consumer goods
which in the past would’ve been guaranteed access to the Irish market through
the UK, we’re now seeing a switch, these goods are coming directly to Dublin
from continental Europe.
“Those companies who don’t need to use the UK are
beginning to avail of those options, and make sure they have established
commercial relationships to be able to move goods no matter what happens with
“The shipping industry can adapt very quickly, the one
thing Brexit is not going to do, it’s not going to increase the number of goods
flowing in and out of Britain.
“So if there are ships going in and out of Britain that
doesn’t have enough business, they can easily run in and out of Dublin.
“The shipping industry can redeploy ships at very short
notice to make up any shortfall, and respond to an increase in demand.
The port says the addition of the ClDN “super ferry” is a vote of confidence in Ireland’s port system.
Since the announcemtn of Brexit plans have been developed to deal with almsot every eventuality.
While politicians still mill over the particulars of Brexit, Industries have began moving forward.
Eamonn O’Reilly, Chief Executive, Dublin Port Company, said: “The arrival of Laureline at Dublin Port is further evidence of the shipping industry responding to market demand with Brexit upon us. It is a vote of confidence by CLdN in expanding its Dublin service so soon after the introduction of Celine and is mirrored by other significant customer investments such as Irish Ferries’ new ship W.B. Yeats servicing both freight and passenger demand between Dublin and Cherbourg.
While Teresa may and others have tried to dampen the impact of Brexit and the potential need for Customs checks, EU leaders have stated that there will need to be some mechanism put in place.
For this reason many companies have opted to bypass UK ports altogether. Although in the short term it might mean a reduction in the number of ships on the lane overall it will mean more business for Irish ports.
As we have seen already seen Brexit has had a mixed effect on Dublin. Although the long term implications are not yet known as Brexit still has not gone through, for the time being, it is looking positive for Dublin’s economy.
We have seen other recent reports about the exodus of financial businesses form London to Dublin and other European cities.
Barclays has continued the trend of major UK institutions moving their operations to Dublin post-Brexit. The company is set to move its mainland European operations to the Irish capital over the coming months.
This move will set Barclays as the biggest bank in Ireland in terms of assets. Its UK and European operations have been valued at close to €190 billion by accounting firm EY.
The evaluations of these operations have come about from the accounting firm EY. They have used a process of mutual benefit in estimating the value of operations in different countries in comparison to Ireland.
A spokesperson for EY said “The basis of the value for the consideration is ‘market value’ – the price that would be paid in a transaction between a willing vendor to a willing purchaser, each of whom is acting for self-interest and gain, and both of whom are equally well-informed about the companies and the market in which they operate,” noted EY in relation to the valuation placed on the French business”
Some of the operations being moved from other European countries include Credit card and corporate investment from Germany and legacy mortgages from Italy.
Barclays has followed a similar line to many other businesses in the UK in recent months. They have made efforts to push through legal frameworks which will allow them to continue operations in the EU, other notable companies include Aviva and Standard life.
The high court judge presiding over the legal changes
criticised the aggressiveness of the changes. Highlighting some of the
desperation reflected by the uncertainty of Brexit.
TheMr justice Richard Snowden said, “This was a significant, complex, and in certain legal respects, a novel scheme,”.
He added: “It could not at any point in the design process have been thought that the court would simply wave the scheme through without having time for consideration.” Although the grievances remianed the legistaltion was still passesd. Thsi has allowed Braclays to proceed with its move.
The bank is expected to double its number of staff in Dublin to 300 by the end of the year. This will include the hiring of new staff and the movemetn of some employees from its London offices.
Dublin remains popular choice
Another survey conducted by EY shows that Dublin remains the most popular choice for financial service firms post-Brexit. Exisiting connections, a strong and educated workforace and easy transiton are just some of the reasons highlighted fro Dublin.
The survey noted that while London is and will remain a financial center for long period of time there have been notable moves by some of the largest institution in the UK.
Cormac Kelly, Financial Services Brexit Lead for EY in Ireland, noted that the major reason for companies wishing to move was the uncertainty surrounding Brexit. He cpmmented that many companies wanted to relocate their business and people to places in which they could freely operate within the EU.
“We are seeing this first-hand with the arrival of these firms who are taking new office space and recruiting talent as well as seconding experts from their worldwide offices into high value, skilled roles in Dublin,” Mr Kelly said.
Companies that have announced Irish investments connected to Brexit include Barclays, Morgan Stanley, TD Securities, Wasdell, Delphi /Aptiv, Simmons & Simmons, S&P Global, Thomson Reuters, Equilend and Coinbase, the IDA said.
EY estimates that almost 7000 jobs could be in jeopardy in London’s financial sector. Omar Ali, financial services head in EY said: “The relocation of 7,000 high-paid finance jobs will inevitably hit the UK tax base,”. “Even using a conservative estimate . . . the direct loss to the Exchequer from employment taxes would be around £600m. In reality, the average salary and therefore tax loss is likely to be much higher.” recorded the Finacnial Times.
Paris and FRankfurt are also two other prominent locatiosn for finacnial frims moving from the UK.
US firm citigroup and Bank of America have made substancial finiancial investments to both Paris and Dublin in recent months. This has inlcuded the leasing of property and the movemtbn of some services to these areas.
With so much uncertainty we are going to see an increasing number of firms move away from the UK. The uncertainty of new policies and the political stalemate will do nothing to soften some of the moves an positions of these companies in recent months.
Hopefully for Dublin at least this trends continues and Dublin will grow as a financial center to rival its other European counterparts.