The SCR Chambers: Sheffield
International trade under global lockdown
Nick Patrick (pictured), Head of International Trade at Sheffield Chamber of Commerce, discusses the global trade perspective
As we know, the new coronavirus became evident in Wuhan – China in December 2019, however it was not until mid-January that the threat became known around the world. It was only at that stage the Chinese government put in extraordinary measures to halt the spread, shutting down all social and economic activity within a week. The initial consequence from a global trade
perspective in these early days had a devastating effect, the Chinese sea and airports were closed. Ships arriving from around the world found that while they could get their cargo unloaded, there was nothing to load onto the ships for return journeys. The initial effect of this was that many of the
world’s sea freight containers were stuck in China and for Europe, Africa and the Americas, still trading, finding containers to put their goods in became scarce. Sources from the Shipping industry have told me this disruption will not ease until September. The second effect was the supply of raw
materials for European industries dwindled, causing factories to close as the parts crucial to their production were not available. We know that the car industry suffered initially due to this reason. As the now named Covid-19 spread
throughout the world and countries started lockdown, one would think everything would stop. However in many countries, including
the UK, manufacturing stayed open for those factories who could maintain the social distancing rules and as a consequence importing and exporting to and from the UK has continued, driven further by the low value of the GPB. According to the British Chambers of
Commerce the number of Certificates of Origin and preferential trade certificates that are being processed by the UK Chamber network is down approximately 20% by comparison to this time last year. Only about 18% of all goods leaving the UK require this type of documentation, however this is a good guide to UK trade as a whole. Imports are still very active and are showing sign of picking up. Activity in Sheffield according to our figures at
the Sheffield Chamber International Trade Centre does not seem to have dropped. We estimate that online applications for documents have reduced by 18% to 21%, however this has been replaced to a degree with an increase in our Export Office Hub services. Our hub service is a remote export office whereby we do all the
export and import administration for companies. It would appear that as admin staff have been furloughed, we are talking up the slack. One other area which has increased is our Letter of Credit management, which I presume is increasing due to sellers concern for the buying company’s cash reserves in countries affected by Covid-19. At the time of writing
this on 17 April, the UK Government has announced
a further three weeks of lockdown so buy the time this article is published in mid-May things will have moved on.
UPDATE: The British Chambers of Commerce now estimate the number of documents processed compared to the same period last year is now down by 25% to 30%. This is remarkable to say that most of our large exports markets have been on lockdown and highlights the resilience of British products.
Spring 2020 CHAMBERconnect 47
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