Transport firms reviewing UK-registered ships ahead of Brexit

LONDON (Reuters) - Sweden’s Stena and Bermuda-registered Stolt-Nielsen are reviewing their UK-registered ships ahead of Britain’s departure from the European Union, the two leading transport companies told Reuters separately on Wednesday.

FILE PHOTO: A Stena Line ferry sails past Poolbeg lighthouse in Dublin, Ireland, February 27, 2018. REUTERS/Clodagh Kilcoyne/File Photo

Such commercial decisions could complicate any attempts by the British government to secure extra space on ships to help cope with potential disruption to trade if it fails to secure a negotiated departure from the EU.

And any possible loss of ships will also be a blow to the UK’s ship registry, which forms part of the country’s maritime services industry. Shipping companies in many flag states pay corporation tax based on vessel tonnage rather than profit.

“In the light of the Brexit process we are considering whether the UK flag can become a possible issue for us when it no longer will be an EU flag post the 29th March 2019, but we have taken no decisions and are reviewing different scenarios,” said Ian Hampton, chief people & communications officer with Stena Line.

“Our fleet needs to be as flexible as possible.”

All commercial ships have to be registered, or flagged with a country, partly to comply with safety and environmental laws.

Stena Line is one of Europe’s largest ferry operators with a large part of the business concentrated around the UK.

The wider Stena group also has chemical tankers and other ships registered with the UK flag, shipping data showed. A Stena Group spokesman said it was also reviewing the other ships in the UK fleet.

A spokeswoman for Stolt-Nielsen, which is listed in Oslo and whose business includes ships and terminals, said the group was also examining its UK-registered ships.

“We are happy with our current arrangements with regards to our UK-flagged fleet but are reviewing the situation. We have not reached any decision yet, because there is no clarity on what kind of Brexit agreement will be in place,” the spokeswoman said.

“All businesses will be considering what is best for them according to their trading model and re-flagging is a consideration.”

Earlier this month, British ferry and shipping freight operator P&O announced it would shift the registration of its UK vessels to Cyprus ahead of Brexit, in part to keep its tax arrangements in the bloc.

As of Jan 30. 2019, there were 1,306 vessels registered with the British flag representing just over 16 million gross tonnage. This was down from 1,317 ships in 2017, 1,328 in 2016, 1,330 in 2015 and 1,327 in 2014, official data showed.

Separate data from valuation company VesselsValue showed the UK flag was ranked 16th in the world, with Panama at no.1 with 6,546 ships and over 207 million gross tonnage.

Less than two months before the UK is due by law to leave the EU on March 29, investors are trying to gauge where the crisis will end up, with options including a disorderly Brexit, a delay to Brexit, or no Brexit at all.

Editing by Alison Williams and David Evans