BMP4003 Business Environment - Article Review: Economic Concepts

This presentation provides a review of a BBC article discussing the soaring shipping costs and their impact on the prices of goods, particularly trampolines, in the UK following Brexit. The presentation utilizes microeconomic concepts such as costs of production, demand and supply to explain the article's arguments, highlighting how increased transportation costs and port congestion, exacerbated by Brexit-related regulations, have affected the shipping industry. It further discusses the currency arbitrage and money market chaos resulting from Brexit and how British shipping companies have been impacted. The presentation also touches upon the challenges faced by British ports due to both the pandemic and Brexit, referencing the British Ports Association's toolkit aimed at helping ports navigate these challenges. It concludes by emphasizing the link between Brexit's impacts on the shipping industry and relevant economic theories.

Article Review - Economic Concepts
and Models

Table of Contents
 Introduction
 Impact of Brexit over shipping industry – Article Review
 Conclusion
 References

Introduction
 Economic concepts and models are description of real
situations in a simple manner that are formulated to make with
the hypotheses for testing of economic behaviour.
 The presentation will review an article of BBC news titled as
‘trampoline prices to soar 50% on shipping costs’.

Impact of Brexit over shipping industry –
Article Review
 There are various points that the article highlights, to begin
with the transport costs increase will make the cost of the
larger toys high.
 This can be linked to the costs and production theory. The
increase in transportation cost increases the overall cost of the
product. Increase in price of products leads consumer to shift
towards alternative that are available in the market for such
products.

Continued...
 In the history first time the ocean freight becomes more than
the cost of the item that is transported. Brexit introduce new
rules regarding exports that creates work load for hauliers.
 As a result of which haulage firms are able to work only at
sixty-five percent of its actual capacity as the formal
documentation legalities increase the complexities in the
operations.

Continued...
 Brexit implies varied impact over the shipping industry. To
begin with currency arbitrage benefitted the foreign buyers.
Money market chaos was a result of brexit, the most suffered
commodity is British Pound Sterling.
 British shipping companies that receive pounds in exchange of
their services became more attractive to the foreign buyers as
for their same services they now have to pay low.

Continued...
 There are serious challenges that British ports faced both due
to pandemic and Brexit. Various attempts were made by the
domestic ports to cope with these challenges and also to ease
the entire process. Toolkit published by BPA (British Ports
Association) aimed at guiding and helping the ports to deal
with circumstances being faced by them.
 Maritime sector reconsidered their strategies to fit into the
changing situations. After half a year of Brexit there were fall
in the sum total of freight tonnage, traffic at ports and imports.
According to Gavalas, Syriopoulos and Tsatsaronis (2022) the
impact of Brexit and pandemic were same over the domestic
ports and it is hard to distinguish between the two.

Conclusion
 Based on this presentation the meaning of economic concepts
and theories have been made clear.
 This presentation has reviewed the article of BBC webpage.
Demand and supply and Costs and production are the two
microeconomic theories which have been used in the
presentation to discuss the points that the article highlights.
 This presentation has linked the impacts of Brexit over the
shipping industries with the theories and have supported it with
arguments.

References
 Chang, Y. C., 2022. Accelerating domestic and international
dual circulation in the Chinese shipping industry—An
assessment from the aspect of participating RCEP. Marine
Policy. 135. p.104862.
 Gavalas, D., Syriopoulos, T. and Tsatsaronis, M., 2022.
COVID–19 impact on the shipping industry: An event study
approach. Transport Policy. 116. pp.157-164.