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The Calais Crisis Is Economically Distressing Traders As Well As Freighters

The Calais Crisis Is Economically Distressing Traders As Well As Freighters

The Calais crisis has been a major blow to the cargo industry and it is costing millions to the UK trade industry currently. There are speculations that the Calais crisis is costing the UK about £250m a day in the trade sector. Although this claim seems unlikely, one cannot deny the fact that this development has affected the cargo industry as well businesses to a great extent. The numbers were issued by the Freight Transport Association (FTA) based on a study on the value of trade that passed through the port of Dover in 2014. According to – economics consultancy Oxera, a study was carried out and they calculated the overall annual value of the goods to be £89bn that passed through the port, which was quoted by the FTA as the overall yearly worth of the UK.

Traders and carriers are hoping that they won’t have to face a situation when Calais. Dover also claims that the freight traffic is steadily expanding and moving up considerably to about an estimated figure of £100 billion a year. The ferries are known to have about 63% of market share on the Channel crossing which means we can expect a rough estimate of 140bn-£160 billion combining the ferry trade and the tunnel trade on an annual basis. Although there has been a substantial amount of damage, it is nothing drastic since the port has been closed for only a few days now.

Almost a quarter of the ferry traffic was diligently diverted when Calais was closed and many of the ferry traffic go to alternative French port like Dunkirk.  There was a long queue of trucks in the Operation Stack and quite a lot of disruption around the tunnel area, but nevertheless trade has not been completely affected. Despite all these road blocks, services have been running although they are running at a slower pace.  The loss in the UK market is bound to happen, but the percentage will be quite small and nowhere near the alleged £250 million in daily rate. The wait and delay in crossing the Channel have affected freight drivers and suppliers to quite an extent.

About £750,000 a day was incurred in costs due to issues like delays, spoiled cargo and lot of fresh produce was lost during this phase. About £2 million of fresh produce had to be discarded and dumped on each week. Apart from this a detour from the Calais area also costs freighters and traders big in terms of fuel charges.  The Calais migrant crisis is turning out to be a threat to companies and firms in the UK since the delay costs to travel through the tunnel is leading to loss. The lapse in security is affecting many industries, especially ones that deal with perishable goods. Industries are also dealing with difficult situations wherein the insurance companies are declining to cover the costs based on certain clauses that state civil disorder are not covered in policies.  The pressure is going to lead to a crisis soon since the higher costs will eventually be passing on to customers which will make everything fallout.

Source From: http://www.theguardian.com/uk-news/2015/jul/30/calais-crisis-cost-uk-250m-a-day-trade