Poor Transport Connections Hold Exporters Back
10 May 2012 in Chamber News
• 20% of firms say poor transport connections are a barrier to exporting
• 41% of businesses are put off by the cost of international transport connections
A survey of more than 8,000 businesses released today (Thursday) by the British Chambers of Commerce, shows that while exporting by UK firms is on the rise, poor transport connections prevent them from exporting more. The survey showed that the number of companies exporting goods and services from the UK has significantly increased. Last year a fifth (22%) of firms surveyed were exporting, compared to almost a third (32%) this year. Despite encouraging signs of more firms exporting, the findings also highlight a number of barriers that prevent companies from selling overseas. One in five businesses (20%) say poor transport connections are a barrier to trading internationally. Exporting plays a vital part in rebalancing the economy and ensuring a lasting recovery, so we would urge the government to boost transport connections to help businesses take their products and services to new international markets.
Transport connections support supply chains and are essential for moving goods to market. According to the BCC’s survey, businesses in the UK believe that the cost and quality of these connections are vital to trade. Time is money, and if firms can’t access markets quickly enough, they end up holding more stock, which hits their bottom line.
Overall, a fifth (20%) of firms see poor transport connections as a barrier to export; increasing significantly for businesses based in Scotland (34%) and Northern Ireland (32%). But more than quality, businesses are concerned with the cost of transport when exporting. 41% say that the cost of trade connections is also an obstacle. Almost half (49%) of firms that would consider exporting are concerned by the cost of trade connections – a worrying finding as the government looks to encourage firms to consider exporting for the first time. It is not just international connections that create problems for exporters. Nearly a quarter of UK businesses (23%) said that domestic transport links are a concern.
Support international trade by improving transport connections
Based on the findings, the BCC is making a number of recommendations to the government, including:
A comprehensive aviation strategy for the UK: Politics and short-termism must not be allowed to hamper efforts to build a world-class system of airports and connections. That means alleviating the South East’s capacity crunch, ensuring regional airports have strong international connections, and maintaining good links between regional and hub airports.
Measures to encourage private sector investment in infrastructure: In addition to implementing the National Infrastructure Plan, the government must encourage more private sector investment. That could include the introduction of a national infrastructure bank or fund that co-funds local and national infrastructure projects.
Accelerate the implementation of road tolling: This would provide funds for new capacity at pinch points, such as the A14 between the Port of Felixstowe, Cambridgeshire and the Midlands. In the longer term, a more comprehensive, nationwide system of tolling or pricing along trunk routes could improve the effectiveness of the UK’s road network for business.
Commenting, John Longworth, Director General of the British Chambers of Commerce (BCC) said:
“Encouraging more British firms to export should be the government’s number one priority. Exports are vital to creating and sustaining an economic recovery. More businesses are exporting in 2012 compared to last year which is good news, but many still face barriers when looking to trade overseas.
“We need to unlock the potential of our existing and future exporters by improving transport links, both locally and nationally, and by slashing burdensome regulation that deters companies from taking their business abroad. Delivering a clear aviation strategy, improving access to sea ports and committing to investment in infrastructure projects would help to tackle some of the major transport issues businesses face when trying to move their goods not just around the UK, but globally. Furthermore, scrapping damaging increases in airline taxes would go a long way to reducing the transportation costs many companies say is a major concern when looking to export. British businesses must also be able to treat Europe as their home turf. Making it easier to trade in these countries is a must.
“We have fantastic companies in Britain with products ready for export. The government needs to get behind these businesses so they can penetrate new markets, and feel confident when taking their goods and services overseas.”