SMMT summit

EU urged to keep British auto supply chains within “Made in Europe” framework

May 13, 2026 | , , , , , ,

The UK automotive industry is urging the European Union to preserve close manufacturing integration with Britain as Brussels advances new industrial policies designed to strengthen European supply chains and accelerate domestic electric vehicle production.

The Society of Motor Manufacturers and Traders (SMMT) has warned that proposed EU “Made in Europe” measures could unintentionally damage one of the world’s most integrated automotive manufacturing relationships if UK operations are excluded from future incentives and industrial support mechanisms.

The concerns centre on the EU’s proposed Industrial Accelerator Act (IAA), a key part of the bloc’s wider “Made in Europe” strategy aimed at strengthening European manufacturing, accelerating decarbonisation and improving competitiveness against the US and China.

UK and EU automotive manufacturing remains deeply interconnected

The SMMT recently met EU representatives in Brussels to discuss how the proposed legislation could affect cross-border automotive manufacturing and whether UK operations would remain eligible for support linked to the “Made in Europe” framework.

The industry body argues that the UK and EU automotive sectors remain fundamentally interdependent despite Brexit, with the EU exporting over €9bn worth of automotive components to UK manufacturers every year, making Britain the largest single export market globally for EU automotive parts.

These flows include battery systems, electric motors, traditional powertrain components, electronics, body panels and high-value engineered parts that move repeatedly between the UK and EU during the manufacturing cycle.

The wider UK–EU automotive relationship is now estimated to be worth around €80bn annually, while UK factories remain the EU’s largest export market for passenger vehicles, worth almost €40bn per year to European manufacturers.

SMMT chief executive Mike Hawes said, “Brexit put the resilience of our shared industry under enormous stress, but manufacturers have overcome those challenges to grow our trade in electrified vehicles alone to record levels.”

The organisation argues that excluding UK operations from future “Made in Europe” incentives could weaken both UK and EU manufacturing competitiveness by disrupting deeply integrated supply chains that have evolved over decades.

Industrial policy becoming increasingly tied to supply chain geography

The proposed Industrial Accelerator Act forms part of a broader shift towards more interventionist industrial policy across major global economies.

The EU’s objective is to accelerate decarbonisation, strengthen domestic manufacturing capability and reduce strategic dependence on overseas supply chains, particularly in areas linked to electric vehicles, batteries and advanced technologies.

The concern for UK manufacturers is whether British suppliers, assembly operations and associated supply chains would qualify for the same incentives and support structures as EU-based competitors.

The SMMT has warned that excluding UK operations from the framework could create new friction across automotive supply chains at precisely the moment manufacturers are trying to accelerate investment into electrification, battery production and low-emission vehicle technology.

Global trade pressure adds further complexity

The debate also comes as the automotive industry adapts to increasingly fragmented global trade conditions.

Following the 2025 UK–US trade agreement, the United States became the UK’s largest export market for cars, with more than 101,000 UK-built vehicles shipped to the US during 2024, worth around £7.6bn. The agreement reduced US tariffs on British-built vehicles from 27.5% to 10% within a quota of 100,000 vehicles, providing important support for premium and luxury manufacturers serving the American market.

At the same time, European automotive manufacturers continue pushing for progress on EU–US trade negotiations amid concerns that tariff disputes and industrial competition could create further instability across international manufacturing networks.

Despite these global shifts, UK automotive leaders continue to stress that Europe remains operationally critical from a manufacturing, sourcing and logistics perspective.

Metro supports automotive manufacturers, suppliers and aftermarket businesses with integrated freight forwarding, customs support and multimodal logistics solutions designed for highly time-sensitive international supply chains. 

From UK–EU customs coordination and inbound production logistics to time-critical component distribution and international freight management, Metro helps automotive customers maintain continuity across complex manufacturing networks operating under changing regulatory and trade conditions.

EMAIL Managing Director, Andrew Smith, today to learn more.

Suez empty

Suez return remains fragile as carriers weigh faster transit against overcapacity

May 13, 2026 | , , , ,

Although some shipping lines have begun selectively routing vessels back through the Suez Canal to reduce transit times and improve vessel utilisation, the industry remains far from a full-scale return to pre-crisis operating patterns.

Diversions around the Cape of Good Hope (COGH) have absorbed substantial global vessel capacity over the past two years by extending voyage times and reducing effective fleet availability. A broader return to Suez routing would rapidly reverse much of that dynamic, potentially releasing millions of TEU of effective capacity back into the market.

Routing via Suez shortens Asia–Europe voyages by more than 3,000 nautical miles compared with Cape routing, reducing transit times, improving vessel productivity and lowering fuel consumption, but the wider implications could be far more disruptive.

Faster transit times could rapidly shift supply and pricing dynamics

Industry estimates suggest that restoring normal Red Sea routings could release around 7% of effective fleet capacity back into the market. This would arrive at a time when container shipping is already facing heavy new-build vessel deliveries and relatively modest long-term demand growth.

The risk is that markets could move rapidly from relative tightness towards oversupply, placing renewed downward pressure on freight rates across major trades.

CMA CGM has increased the number of Suez Canal transits on two selected services, with shippers paying premium fees in exchange for faster transit times and reduced inventory delays.

Other carriers may be evaluating Red Sea routing strategies, although they remain cautious about large-scale network restructuring while regional security conditions remain unstable.

Importantly, any financial benefit from returning to Suez is still being offset by elevated war-risk insurance premiums and ongoing operational uncertainty linked to Houthi activity and wider instability across the Middle East.

Middle East instability continues to cloud long-term planning

Earlier expectations that container shipping could progressively return to normal Red Sea operations during 2026 have weakened significantly following renewed military escalation involving the US, Iran, Israel and regional proxy groups.

Several shipping lines that had previously explored limited Suez re-entry have since adopted a more cautious position, with some reversing earlier routing plans and returning services to COGH diversions.

At the same time, wider global trade patterns are also evolving in ways that partially offset oversupply concerns.

Chinese exporters are increasingly expanding into alternative markets including South America, Africa, the Indian subcontinent and the Middle East itself. These longer and more operationally complex trade flows consume additional vessel capacity and are helping absorb part of the substantial new tonnage entering the global fleet.

Even so, structural pressure continues to build beneath the surface.

Global trade growth is still expected to remain below the pace of new vessel deliveries scheduled between 2026 and 2028. Larger vessels are expected to feel the effects of oversupply first, particularly as cascading tonnage begins placing pressure on secondary and regional trades.

For shippers, the result is an increasingly uncertain operating environment where transit times, freight rates and network structures could change rapidly depending on how security conditions evolve across the Middle East.

While a full-scale return to Suez routing still appears unlikely in the near term, selective transits and gradual network adjustments are already beginning to reshape carrier strategies, pricing behaviour and capacity planning across major east-west trades.

Metro is working closely with customers to assess Suez and Cape of Good Hope routing trade-offs, comparing carrier strategies and identifying the ocean freight solutions most aligned to their supply chain priorities, inventory requirements and risk tolerance.

EMAIL Metro Managing Director Andrew Smith to learn how differing Suez and Cape routing strategies could affect your supply chain, and how Metro helps shippers balance transit times, security risk, insurance exposure, cost volatility and schedule reliability.

EU UK negotiations 2

UK–EU reset could ease border friction for importers and exporters

May 13, 2026 | , , , , , , , , , , , , , , , , , , , ,

On 13 May 2026, the King's Speech set out the government's plans for the next Parliamentary session, including efforts to reset post-Brexit relations, forge closer economic ties with the EU and reduce unnecessary barriers to trade.

The reset is not a return to the single market or customs union. Instead, it is being presented as a targeted attempt to stabilise the trading relationship through closer alignment in specific areas where the government believes reduced friction could support growth, cut costs and improve supply chain efficiency. 

SPS alignment could simplify GB–EU border processes

The government intends to pass legislation by the end of 2026 to enable an SPS agreement with the EU to take effect by mid-2027. The agreement would cover animal and plant health, food safety and related agri-food rules, with the UK aligning to relevant EU legislation in order to ease border procedures.

SPS controls have been among the most disruptive post-Brexit trade barriers, creating additional documentation, inspection, certification and timing challenges at the GB–EU border.

A veterinary-style agreement could reduce the need for some routine checks and help make border movements more predictable. For exporters, this may improve access into EU markets. For importers, it could reduce delays, compliance costs and uncertainty when bringing goods into Great Britain.

Emissions trading alignment could reshape supply chain costs

Alongside the SPS agreement, the government is also negotiating closer alignment between the UK and EU emissions trading schemes (ETS), designed to reduce regulatory divergence and support longer-term industrial and energy cooperation. 

For businesses involved in manufacturing, energy-intensive production, transport and international trade, the implications could extend well beyond environmental policy.

A linked or more closely aligned ETS framework could help reduce friction for exporters trading into Europe, particularly as the EU continues expanding carbon-related trade measures and compliance requirements. It may also provide greater long-term certainty for businesses operating across both UK and EU markets.

Dynamic alignment brings certainty but also new compliance considerations

The proposed reset relies on dynamic alignment in selected areas, meaning UK rules would keep pace with relevant EU law as it evolves. This is central to the government’s ambition to reduce border friction, because smoother trade processes depend on both sides recognising equivalent standards.

For logistics and supply chain teams, this could provide greater medium-term certainty over the regulatory framework affecting GB–EU trade. However, it also means businesses will need to monitor changes in EU rules that may flow into UK requirements over time.

The wider political debate remains active. Critics argue that dynamic alignment could reduce UK regulatory flexibility, while others want the government to go further and pursue a customs union. 

What this means for UK traders

The direction of travel may point toward a less burdensome GB–EU trading environment, but the more realistic reading is:

  • Customs declarations are not going away simply because an SPS deal is agreed.
  • Rules of origin issues are not being removed by the reset as described in this briefing.
  • What may improve is the regulatory layer sitting on top of customs processes for certain categories of goods, especially agri-food.

That distinction matters, because a truck can still need customs processing even if SPS checks become lighter or less frequent.

So the likely benefit is not “no border”, but a border with fewer SPS-related interruptions, fewer compliance mismatches and a lower chance that a shipment is delayed because UK and EU technical rules have drifted apart.

Importers and exporters should now review where SPS controls, border checks, certification or documentary requirements are creating cost, delay or uncertainty in their supply chains. They should also assess whether current customs and compliance processes are flexible enough to adapt as the UK–EU framework develops.

As the UK–EU reset develops, Metro is helping customers assess how changing customs procedures, SPS requirements and evolving regulatory alignment could affect their supply chains, transit times and compliance obligations. 

Through integrated freight forwarding, customs support and cross-border logistics expertise, Metro helps businesses prepare for changing GB–EU trade conditions and maintain efficient cargo flow across European supply chains.

EMAIL Managing Director, Andrew Smith, today to learn more.

HKG port

Peak season uncertainty grows as shippers front-load inventory and freight demand diverges

May 13, 2026 | , , , , , , , , , , , , , , , ,

Container shipping markets appear to be entering an earlier and increasingly fragmented peak season, as geopolitical disruption, rising fuel costs and tighter carrier capacity management reshape freight demand across major trade lanes.

Bookings on several east-west corridors strengthened earlier than normal during May, with carriers maintaining upward pressure on rates as many importers accelerate shipments ahead of the traditional third-quarter peak season period.

Spot rates on Asia–US west coast services have continued to outperform other major trades, rising around 4% week on week and remaining significantly above levels seen before the escalation of Middle East disruption. Asia–Europe pricing has also strengthened modestly, with rates to North Europe and the Mediterranean increasing as carriers attempt to restore margins through capacity reductions and surcharge increases.

However, broader market conditions remain difficult to interpret. What appears to be an early peak season may ultimately reflect precautionary inventory positioning and front-loading activity rather than sustained end-user demand growth.

Front-loading and disruption are reshaping traditional shipping patterns

A growing number of importers are moving cargo earlier amid concerns that operational disruption, congestion and capacity shortages could intensify later in the year.

The continuing closure and instability surrounding the Strait of Hormuz is adding further pressure to global freight markets, with around 1.5% of global shipping capacity estimated to be affected directly by disruption linked to the region.

At the same time, higher oil prices are increasing carrier operating costs across both ocean and airfreight markets, while blank sailings are continuing to tighten effective capacity on key trades.

Capacity reductions on Asia–Europe services have become increasingly aggressive in recent weeks, with shipping lines reducing available space to North Europe and the Mediterranean while also introducing additional blank sailings beyond traditional holiday periods.

The result is a more volatile market where shipment rollovers, reduced allocations and short-notice schedule changes are becoming increasingly common, even where bookings are technically available.

On transpacific trades, carriers have also maintained relatively firm control over available capacity following post-Lunar New Year service adjustments, helping sustain pricing despite ongoing uncertainty around underlying consumer demand.

Additional surcharges introduced on Asia–US services suggest carriers expect demand to remain comparatively elevated through the summer period.

Many importers remain cautious about underlying demand, particularly in Europe where economic conditions remain comparatively weak and pressure on household spending continues to affect purchasing behaviour.

This creates the possibility that some businesses could be holding elevated inventory levels later in the year, potentially resulting in a delayed, compressed or weaker traditional peak season across certain sectors.

Metro survey highlights cautious but stable demand expectations

Early findings from Metro’s ongoing customer survey reflect this more balanced outlook.

Around 38% of respondents currently expect freight volumes to remain broadly stable over the next 12 months, while a similar percentage expect volumes to increase slightly. Less than 1/8 anticipate a significant decrease, while none expect a significant increase in activity.

The findings suggest that many businesses are not currently anticipating a dramatic peak season surge, but instead expect relatively stable trading conditions alongside continued disruption and cost pressure.

At the same time, respondents indicate that ongoing instability across global supply chains is continuing to influence inventory planning, shipping schedules and freight costs.

The divergence between Asia–US west coast and Asia–Europe markets highlights how uneven global freight conditions have become. Rather than moving in a single direction, pricing and demand are increasingly being shaped by regional economic performance, inventory strategies and trade lane-specific operational risks.

Sea–air solutions gaining attention as airfreight costs surge

The disruption is also influencing modal shift decisions.

With the average airfreight rate out of Asia-Pacific over 40% higher than last year shippers are increasingly exploring sea–air solutions to balance cost, speed and reliability.

Airfreight rates have risen sharply as fuel surcharges, restricted airspace and tighter capacity continue to affect global networks. At the same time, ongoing Red Sea diversions are keeping some ocean transit times above 50 days on Asia–Europe services.

For many retail, fashion, e-commerce and consumer goods shippers, sea–air services are becoming an increasingly valuable tactical solution where traditional airfreight costs are difficult to absorb but ocean transit times remain commercially challenging.

For shippers, the key challenge may now be timing. If front-loading activity continues through the early summer period, demand on some corridors could remain firmer for longer than normally expected. However, weaker consumer demand and elevated inventory levels could also limit the scale of any traditional late summer or autumn rebound.

Metro’s survey remains open, and businesses are encouraged to share their expectations and experiences, together with insights into current market conditions, operational pressures and changing supply chain requirements. The survey also provides an opportunity for customers to share feedback on Metro’s performance and highlight where additional support or solutions could help strengthen supply chain operations. 

GO TO THE 2 MINUTE SURVEY

Through proactive capacity planning, multimodal air, sea and sea-air routing options and contingency-focused supply chain support, Metro helps customers respond more effectively to disruption, changing demand patterns and ongoing peak season uncertainty. EMAIL Managing Director, Andrew Smith, to learn more.

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