6. Transport Links to Key Trade Destinations

6. Transport Links to Key Trade Destinations

This chapter provides an update on the key trade destinations highlighted in chapter 3. In 2018, the countries included in Scotland's top five trading partners (imports and exports) were largely unchanged in terms of order from the previous year. One significant change however was that after two consecutive years in Scotland's top five export destinations, China was replaced by the Republic of Ireland which had last featured the top 5 in 2015. This chapter will explore key freight and passenger links to and from Scotland's leading trading partners.

Although Spain is not considered to be one of Scotland's largest trade partners in terms of value, data in chapter 4 highlighted the importance of this nation as a destination for Scottish tourists. Therefore, this chapter will explore key links between Spain and Scotland.

As highlighted earlier in this report, key export commodities from Scotland include beverages, fish, petroleum related products and power generation machinery. Many of these goods are produced by businesses operating in one of Scotland's Growth Sectors. Similar categories of goods are also imported by Scotland along with gas and telecommunications & office equipment. An overview of the key commodity categories that Scotland trades in is included in Table 2 in the Annex. Details of the transportation of these goods to and from the aforementioned countries is discussed below.

6.1 Norway

Since 2013, Scotland has imported more goods from Norway than any other nation. Over that time, imports from Norway have totalled more than £25.5 billion (including Q2 2019). The majority of goods imports from Norway are related to the energy and fuel markets, reflecting both countries' close involvement in North Sea oil and gas production and exploration. Natural gas, petroleum products and related materials are transported to Scotland using ports and pipelines connecting Norway and the UK.

As mentioned above, a large proportion of natural gas (Scotland's largest import good from Norway) travels from Norway via pipeline. Scotland imported around £3.3 billion of natural gas from Norway in 2018.

Large machinery items and transport equipment form a significant portion of Scottish exports to Norway. Some of these larger high value items travel in cargo planes bound for Norway, while other smaller items are able to travel in the hold of passenger flights. This is similar to seafood which is traded with Norway, with an increasing amount being transported via commercial and passenger aviation.

Freight ferries travel twice weekly from Immingham on England's east coast to Norway with road links from Scotland to Immingham via the A1(M) and A180(M).

In terms of passenger flights, Scottish travellers can fly to Norway from Aberdeen, Edinburgh or Inverness, with flights into the Norwegian capital, Oslo, leaving from Scotland almost daily.

6.2 EU Countries

Four of Scotland's top five export trading partners are EU nations; the Netherlands, France, Germany and the Republic of Ireland. There are two EU nations in Scotland's top 5 sources of imports, the Netherlands and Germany. The largest commodity group for goods exported to and imported from these countries in terms of value is machinery and transport equipment. The EU was also the top global region for Scotch whisky exports, valued at £1.39 billion in 2018, 30% of all global Scotch whisky exports^[58].

As highlighted in Chapter 3, freight to and from mainland Europe can be carried in a number of different ways. Some perishable goods are transported via the trunk road network in Scotland and England to the Channel Tunnel, Channel ferry terminals or airports. Less time sensitive perishables may be transported on freight vessels from Scotland's ports or transported to North Sea ferry service terminals in Newcastle and Hull which offer overnight ferry services to continental Europe.

At the moment there are no direct rail freight services from Scotland to mainland Europe, although non-perishable freight can be carried by rail to hubs in England for transfer by rail or other modes to European destinations. However, there is a route linking Scotland and continental Europe in the opposite direction. GB Railfreight currently carries clay slurry from Antwerp, Netherlands through the Channel Tunnel direct to Irvine, Scotland once a week. It is conveyed in bulk wagons owned by Imerys.

6.2.1 France

Scotland imports a large amount of power generating equipment from France. This includes engines for vehicles, turbines, regulators and generators. These goods are often shipped via coastline shipping, with bulked smaller items being transported by air.

France is also the largest EU market for Scotch whisky and seafood exports. In terms of volume, France was Scotland's largest export destination for Scotch whisky in 2018, shipping 187.8 million 70cl bottles, an increase of 5.3% compared to 2017. France were second to the United States in terms of value for Scotch whisky exports. The main wholesale market for Scotland's seafood on the European mainline is Boulogne sur Mer located close to Calais in northern France. This is accessible via the Dover Channel crossing. Scottish freight vehicles can travel to the Channel in a day, so this corridor is of vital importance to trade with France and the rest of Europe.

Scotland's primary links for trade with France are via road and port. HGVs carry goods down to Dover where they board ships to transfer over to France. Scotland has a number of air links with France, with flights to 20 different French airports available from one of Scotland's 5 major airports.

6.2.2 Germany

Similarly to with France, Scotland has a number of air links with Germany, with direct flights from Scotland to 17 German airports.

An important Scottish commodity exported to Germany is beverages, with £147 million of exports from Scotland in 2018. This represents 3.4% of total Scottish beverage exports in 2018, and 5.4% of all Scottish exports to Germany. While Germany is the UK's largest trade market, this is not the same for Scotland with Germany accounting for 8.2% of all Scottish trade in goods (imports and exports) in 2018. Having said that, transport links between Scotland and Germany are vital for Scottish trade, with Germany being the largest economy in Europe in terms of GDP and one of the strongest economies in the world.

In terms of road transport, Germany was one of the only countries with 2018 road freight data that could be accurately disaggregated. This showed it is a key market for Scottish road freight. Road freight travelling from Scotland to any of the countries in continental Europe, as mentioned before, is likely to go via the Dover to Calais ferry crossing or through the Channel Tunnel.

Sea links between Scotland and Germany usually involve either chartered ships carrying special goods into one of Germany's many Northwest ports (the three largest ports are Bremen, Hamburg and Wilhelmshaven) or shipping to ports in France or the Netherlands before a modal shift to road or rail for the remainder of the journey.

6.2.3 The Netherlands

As highlighted earlier, the Netherlands is Scotland's number one export destination (£6.9 billion in 2018), largely as a result of the dominance of the Dutch port of Rotterdam. The port acts as an international shipping hub with goods shipped on to other destinations from there. Due to the method in which export and import data is collected it is difficult to ascertain the final destination of goods which pass through Rotterdam.

Freight is typically carried by chartered vessels originating from Scottish ports or by road to ports on the east coast of England. Some of the freight bound for the Netherlands is carried by road via the Channel ports. While there are no regular scheduled sailings between the Netherlands and Scotland, the overnight ship between Newcastle and Amsterdam is an option for passengers and for HGVs.

The main import goods from the Netherlands are office machines and telecommunication materials. Key exports to the Netherlands from Scotland include petroleum products, medicinal & pharmaceutical products, and beverages, with these three good categories accounting for 91% of total Scottish exports to the Netherlands in 2018.

Scotland's top 4 airports for passengers (Aberdeen, Edinburgh, Glasgow and Inverness) offer regular passenger flights to Amsterdam.

6.2.4 Republic of Ireland and Northern Ireland

The Republic of Ireland regained its position in Scotland's top 5 export destinations in 2018, demonstrating its importance as a core market for Scottish goods. Scotland traded £2.0 billion worth of goods with the Republic (imports and exports) accounting for 3.5% of Scotland's total trade in goods in 2018. The main category of goods traded with the country are gas (natural and manufactured), petroleum and petroleum related products, and beverages.

Northern Ireland is also an important destination for Scotland's goods, however given the nature of export data and the fact that Northern Ireland is part of the UK, values and goods exported to or imported from the country are included in overall UK figures and are not easily disaggregated at a Scottish level.

The main freight corridor between Scotland and the island of Ireland is via the ferry services which operate from Cairnryan and Loch Ryan. There are a total of 13 daily sailings to Larne or the Port of Belfast, with an estimated 400,000 freight units carried on this corridor (around 1,200 per day). Two main trunk roads link the port with the central belt (A77) and England (A75). The two roads are estimated to carry a combined total of £67 million worth of goods per day^[59].

All of Scotland's main airports have regular flights to a variety of destinations in both Northern Ireland and the Republic (with flights available to Belfast, Derry, Dublin, Cork, Knock and Shannon).

6.2.5 Spain

Spain is an important market for Scotland both for trade in goods, but also and arguably more importantly, for tourism. In 2018, Scotland traded £1.7 billion worth of goods with Spain (imports and exports). Scotland imports more from Spain than it exports, with the key import markets being other transport equipment, vegetables & fruit and beverages. Over 20% of Scottish exports to Spain in 2018, were beverages.

As noted earlier in the report, Spain has been Scotland's number one tourist destination for the last decade. Scottish airports fly to 27 destinations in Spain and the Canary Islands.

The Spanish market is crucial to Scottish people. In 2018, over 4 million passengers boarded a flight bound for a Spanish airport, a slight decrease on the previous year of 3%.

6.3 Further afield

While the ports in mainland Europe are vital for Scottish trade, Scottish businesses regularly transport goods even further overseas, with chartered aircraft and ships travelling to Africa, South America and Asia, carrying a variety of goods.

6.3.1 USA

Like the EU countries featuring in Scotland's top trade partners, the USA is a key market for Scottish beverage exports, indeed more so than France, Germany and the Netherlands combined. In 2018, the USA alone accounted for nearly a quarter of all Scottish beverage exports.

The Scotch Whisky Association noted in their whisky analysis for 2018, published in February 2019, that The United States is Scotland's single largest overseas market for Scotch whisky, accounting for £1.04 billion in Scotch whisky exports in 2018. This represents a 13% increase from 2017 and accounts for over 22% of all Scotch whisky exports.

Over the last decade a number of scheduled passenger flights have been introduced from Glasgow and Edinburgh airports to the United States. Scheduled airlines now fly from Edinburgh to New York JFK, New York Newark, Chicago, Washington DC, Philadelphia and Boston. Glasgow has a direct route to New York Newark.

These flights are often used to carry low volume freight, for instance time sensitive blood and human tissue. Dedicated air freighters regularly use Prestwick Airport to carry aircraft engines between Scotland and the USA. These are usually entire engines which are transported to Scotland for overhaul or repair before being shipped back.

In addition to these air links, a number of chartered ships leave regularly from Scotland to the USA. Scotland ships goods including agriculture bulk goods and forestry goods from the Clyde ports to the USA regularly. Aberdeen Harbour handles machinery and equipment goods imports from the US, and ships oil related goods back.

Both the USA and China are important import and export destinations for Scotland's ports, particularly in relation to office, automatic data processing (ADP), power generating and other transport machinery. These items can only be handled by main ports such as Clyde Port and Aberdeen Harbour due to their bulkiness.

6.3.2 China

While China continues to be a key market for Scotland, it fell out of Scotland's top 5 exporting markets in 2018 due to a sharp fall in oil related product exports to the country.

HMRC RTS shows that Scotland exported in excess of £1.7 billion of petroleum related products to China in 2017. This figure fell by more than half to £810 million in 2018. These goods travel via tanker to China and are likely to be loaded onto ships from various ports around the UK, especially Forth Ports.

In addition, Scotland exports other goods including steel and power generating equipment to China from a number of its ports, particularly the Forth and Clyde ports.

In March 2018, Scotland secured its first direct air route to China, with direct links between Edinburgh and Beijing. This created a direct link for Scottish goods exporters, particularly in the food and drink sector. China is a major importer of such goods from Scotland.

Scotland's transport links with China not only promote trade with Chinese businesses, but provide Scottish exporters access to additional markets in and around South East Asia. Therefore, this is a vital gateway into other emerging and developing market economies for Scottish goods.

Previous Page | Next Page