Lloyds Market Matters

Metro CEO joins Lloyds Bank to examine the changing global trade outlook

Sep 30, 2026 | , , , ,

Metro CEO Grant Liddell joined Lloyds Bank’s Markets Matter briefing to examine how geopolitical disruption, changing sourcing strategies and rising transport costs are reshaping global supply chains and why underlying trade remains surprisingly resilient.

The Lloyds Bank’s Markets Matter series brings together its economists and market specialists with business leaders to give corporate and commercial clients practical insight into the economic, financial and operational issues affecting their businesses.

For its latest briefing, Navigating Markets Beyond Monetary Policy, Grant joined Lloyds Bank specialists to bring a logistics perspective to a discussion spanning interest rates, inflation, energy prices, government finances and the wider risks facing UK businesses.

With freight costs among the channels through which geopolitical disruption and higher energy prices can feed into inflation, the discussion turned to what Metro is seeing across international supply chains and how businesses are responding.

Global trade is proving resilient

Global logistics provides an unusually immediate barometer of international trade, and Grant highlighted the contrast between the economic headlines and what is actually moving through supply chains.

Global container volumes reached a record level during July, while containerised trade continued to grow year on year. Intra-Asia and Asian export trades have been particularly strong, despite tariffs, geopolitical tensions and changing sourcing patterns. 

The picture is not uniform. European demand remains relatively subdued compared with the US, Far East and some emerging markets, while India is experiencing particularly strong growth.

That demand has consequences. Freight operates as a highly responsive market, with rates capable of rising or falling rapidly as available capacity moves out of balance with cargo demand. Grant highlighted dramatic increases on some Indian ocean and airfreight trades this year, while transpacific ocean rates have returned towards levels last experienced during the pandemic. 

Those increases do not stop with the freight invoice. Components and raw materials frequently cross borders several times before a finished product reaches its customer. Higher transport costs can therefore enter the production process at multiple stages, creating an indirect inflationary effect as well as increasing the final cost of distribution. 

From just in time to ‘just given time’

One of Grant’s most interesting observations concerned the way businesses are responding to disruption.

The highly optimised just-in-time model used across many manufacturing and industrial sectors has become much harder to maintain as Red Sea diversions, geopolitical conflict, closed airspace and port congestion extend and destabilise transit times.

Grant described the reality as increasingly becoming “just given time” with businesses adapting their inventory and production strategies to supply chains where predictable lead times can no longer always be assumed. 

That change is also accelerating interest in alternative sourcing locations. India is attracting manufacturing in sectors including technology and electronics, while Metro customers are increasingly considering production in the UK and Europe. North Africa is becoming more prominent and Turkey has attracted manufacturing across garments, automotive and engineering.

Some businesses had already begun reducing their dependence on China before the pandemic. Subsequent disruption has pushed resilience and diversification much higher up the agenda.

Yet this does not necessarily mean less international trade. Goods may travel shorter distances or move by truck rather than deep-sea container or airfreight, while rapidly expanding intra-Asian trade demonstrates how changing manufacturing footprints can create new freight flows rather than eliminate them. 

Reliability becomes the critical supply-chain risk

Asked what businesses should be considering as they plan for 2027, Grant put reliability high on the list.

Strong demand is combining with congested ports, delayed vessels, weather disruption and geopolitical uncertainty. The resulting challenge is not simply securing a competitive freight rate, but ensuring components reach production lines and finished products reach markets when required. 

That reinforces a theme running throughout the Lloyds discussion.

Higher freight and energy costs matter, but their wider economic impact depends partly on how businesses respond: whether costs are absorbed, reflected in pricing, influence wage decisions or become embedded in future contracts.

For supply-chain managers, the equivalent challenge is building enough flexibility into sourcing, inventory and transport strategies to withstand disruption without creating excessive cost.

Suez could change the equation again

There are also reasons why the freight outlook could change during 2027.

Grant highlighted the increasing use of the Red Sea and Suez route by carriers serving Asia, with several lines already using the route regularly.

A wider return would release effective vessel capacity because ships would no longer require the additional 15+ days associated with Cape of Good Hope diversions. That could improve supply and place downward pressure on freight rates. 

But the outlook remains complicated by energy prices, aviation fuel costs and continuing geopolitical risk.

Near-shoring can provide another layer of protection, but changing a manufacturing footprint is neither quick nor straightforward. Establishing new suppliers and supply chains can take months or years.

The result, as Grant characterised it, is a mixed picture for 2027, and while significant risks remain businesses are actively changing how and where they source, manufacture and move products to manage them. 

Turning global risk into practical supply-chain decisions

Perhaps the clearest message from the discussion was that geopolitical and economic uncertainty has not stopped global trade. Instead, it is changing its routes, costs and priorities.

With businesses already planning for 2027, the discussion provides useful context for understanding how economic and geopolitical risks could affect costs, sourcing and supply-chain decisions in the months ahead.

Click HERE to catch up with the full Lloyds Banking Group Markets Matter recording.

India industrial revolution 1440x1080 1

India’s sourcing growth creates pressure at both ends of the supply chain

Sep 2, 2026 | , , , , , , , , ,

UK businesses sourcing from India face rising logistics costs before and after production, as more expensive Asian imports combine with tight westbound capacity and strong India–Europe demand.

India continues to strengthen its position as a manufacturing and sourcing alternative for UK and European businesses. But the cost of moving goods through the supply chains supporting that growth is rising.

The pressure starts well before finished products leave India. Many manufacturers rely on machinery, components, chemicals, electronics and other inputs imported from China and neighbouring Asian markets. Freight costs on those inbound routes have risen sharply, increasing the cost base for Indian production.

At the same time, strong exports are tightening India–Europe container capacity and pushing westbound freight costs higher.

For UK buyers, that creates a potential double freight squeeze, with logistics inflation entering the product cost upstream before another layer is added on the journey to Europe.

Asian imports into India become more expensive

The first pressure point is emerging on eastbound services into India.

During August, Shanghai–Nhava Sheva spot rates have almost doubled compared with July, while Shanghai–Chennai rates have increased by around 60%. Costs from other Asian origins, including Singapore, have also risen significantly.

Strong seasonal imports ahead of India's festival period are contributing to demand, while congestion at major Asian hubs has disrupted schedules and tightened available capacity.

For Indian importers, the impact extends beyond freight rates. Changing schedules and less predictable transit times make it harder to manage inbound inventory and maintain reliable production flows.

Higher freight feeds into manufacturing costs

The significance for UK buyers comes from China's deep integration into Indian manufacturing.

Rising transport costs for the raw materials and components feeding Indian factories may initially be absorbed through manufacturer margins. If elevated costs persist, however, some will inevitably feed into production costs and finished-product pricing.

That creates a supply-chain exposure that may be difficult to see when procurement decisions focus primarily on the factory price.

An Indian-made product can already contain significant logistics costs before it enters a container for its journey to the UK.

Strong exports tighten the westbound market

The second pressure point is India–Europe shipping.

Indian containerised exports to Europe reached an estimated 518,000 TEU during the first half of 2026, with stronger-than-expected demand creating a pronounced capacity squeeze.

Westbound rates increased again during August and are approaching levels last experienced around four years ago. Space has become increasingly difficult to secure, with some leading India–Europe services selling out several weeks ahead and additional spot capacity appearing only as carriers release allocations.

The problem is not simply growing demand. Available capacity has struggled to keep pace.

Blank sailings, congestion and rolled cargo at Nhava Sheva and Mundra are reducing effective space, while some capacity has been redirected towards growing Latin American flows using Indian ports for transhipment.

For cargo owners, guaranteed space can therefore command a premium, while less flexible shipments face greater rollover and delay risks.

Look beyond the supplier price

India's manufacturing scale and expanding trade relationships continue to make it an important sourcing market. But the changing freight environment reinforces the need to assess the complete landed cost of sourcing there.

A product assembled using Chinese or other Asian components may now carry substantially higher inbound logistics costs. Moving the finished goods from India to the UK then adds a second layer of freight inflation.

For lower-margin or freight-intensive products in particular, those combined costs could materially affect sourcing economics.

Timing matters too. With strong westbound bookings and constrained capacity, waiting for cheaper freight could leave importers competing for even tighter space.

Businesses can reduce that exposure by understanding upstream supply flows, consolidating shipments where appropriate and planning westbound capacity earlier.

Manage the whole supply chain, not just the final leg

The growing relationship between Chinese inputs, Indian manufacturing and European demand means these movements cannot always be managed effectively in isolation.

Metro can connect the complete Asia–India–UK supply chain, providing visibility from upstream suppliers through Indian production and onward to the UK. 

With extensive Indian based capabilities, global carrier relationships, consolidation and alternative routing options, we can identify where cost and capacity pressures are building and act before they reach your bottom line. EMAIL Andrew Smith, Metro’s Managing Director, to learn about protecting your landed cost from origin to destination.

currency screen

Sterling strengthens against the US dollar; what it means for importers and exporters

Aug 5, 2026 | , , , , , , , , , , , , , ,

The pound has been strengthening against the US dollar, improving sterling buying power for many UK businesses purchasing goods and services priced in dollars.

For importers, that's welcome news. A stronger pound can reduce the sterling cost of overseas purchases, international freight, fuel and other dollar-linked expenses. However, exchange rates are only one part of the equation.

The recent rise in GBP/USD has been driven largely by a weaker US dollar rather than a dramatic improvement in the UK economy.

Several factors have combined to support sterling:

Markets expect US interest rates to fall

Investors increasingly believe the US Federal Reserve could begin cutting interest rates sooner than previously expected as economic growth moderates.

Lower interest rates generally make the dollar less attractive to investors, reducing demand for the currency.

The Bank of England remains more cautious

Although UK growth remains subdued, inflation—particularly in wages and services—continues to influence Bank of England policy.

With UK interest rates expected to remain higher for longer than US rates, sterling has become relatively more attractive.

Investors are taking less defensive positions

During periods of global uncertainty, investors typically move money into the US dollar because it is viewed as a safe-haven currency.

As market sentiment has improved, some of that demand has eased, allowing sterling to recover.

The UK economy has proved more resilient than expected

Economic growth remains modest, but the UK has avoided some of the more severe downturns previously anticipated.

That has helped maintain confidence in sterling despite ongoing economic challenges.

Yet, the pound could weaken again

Foreign exchange markets can move quickly and remain highly sensitive to:

  • US employment figures
  • Inflation data
  • Federal Reserve and Bank of England announcements
  • Geopolitical events
  • Changes in investor confidence

Exchange rates can reverse rapidly as market expectations change.

What this means for your business

For companies involved in international trade, a stronger pound creates opportunities, but also some important considerations.

Purchasing goods in US dollars

If your suppliers invoice in US dollars, sterling now buys more dollars than it did only a few weeks ago.

This can reduce the cost of imported products, raw materials and overseas services.

However, savings may not appear immediately if:

  • purchases are already hedged
  • contracts are fixed at earlier exchange rates
  • suppliers review prices only periodically

Freight and fuel costs

Many international transport costs are linked directly or indirectly to the US dollar.

These include:

  • ocean freight
  • air freight
  • bunker fuel
  • aviation fuel
  • fuel surcharges
  • equipment charges

A stronger pound can reduce these costs in sterling terms.

However, exchange-rate gains can easily be offset by rising oil prices, emergency carrier surcharges or changes in freight market capacity.

Export revenues

Businesses selling into dollar markets face the opposite effect.

Each dollar of revenue converts into fewer pounds when sterling strengthens, potentially reducing margins unless prices are adjusted or currency exposure is managed.

Budgeting and pricing

Periods of exchange-rate movement are a good opportunity to review:

  • customer pricing
  • freight assumptions
  • tender calculations
  • landed-cost models
  • cost recovery mechanisms

Rather than relying on a single exchange-rate assumption, businesses should consider a range of scenarios when preparing longer-term quotations or contracts.

Practical steps to consider

Businesses with significant US dollar exposure should consider:

  • Reviewing how much of their purchasing and sales activity is linked to the US dollar.
  • Checking whether pricing mechanisms reflect current exchange-rate movements.
  • Understanding whether freight costs are based on spot exchange rates, fixed pricing or published conversion indices.
  • Considering hedging or fixed-rate arrangements where currency exposure is significant and predictable.
  • Regularly updating budgets and tenders to reflect changing market conditions rather than relying on outdated assumptions.

Understanding how changing exchange rates could affect your freight costs or supply chain. Metro's finance experts can help you assess the wider logistics impact and identify opportunities to improve cost control across your international shipments.

EMAIL Laurence Burford, Chief Financial Officer.

Trade handshake

UK trade deals open new opportunities

Jul 22, 2026 | , , , , , , , , , , , , , , , ,

The UK's trade agenda continues to gather momentum, creating new opportunities for businesses trading internationally, while reshaping the way they access global markets. 

The most recent agreements with major trading partners across Asia-Pacific, the Gulf, North America and Europe have expanded market access, reduced tariffs and strengthened supply chain resilience.

For UK businesses, these agreements represent far more than diplomatic milestones. They offer practical commercial advantages, from lower export costs and simplified market access to stronger supply chains and improved regulatory cooperation. While some negotiations remain ongoing, the overall direction is clear: the UK is building an increasingly diverse portfolio of international trading relationships that extends well beyond traditional European markets. 

UK-EU relations continue to evolve

Although the planned UK-EU summit scheduled for July has been postponed following the change in UK political leadership, negotiations have continued behind the scenes.

Officials are progressing work on the mandatory five-year review of the Trade and Cooperation Agreement (TCA), alongside wider discussions aimed at improving the trading relationship.

Several areas could deliver tangible benefits for businesses. Negotiations on sanitary and phytosanitary (SPS) standards are intended to reduce border checks on food and agricultural exports, while discussions continue around linking UK and EU emissions trading systems, cooperation on electricity infrastructure and broader regulatory alignment.

While no major changes have yet been agreed, businesses trading with Europe should continue to monitor developments, as incremental improvements to customs procedures and border processes could reduce friction for many exporters over the coming months.

CPTPP becomes a reality for UK exporters

One of the most significant developments has been Mexico's ratification of the UK's accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 22 June 2026.

With Canada expected to complete implementation in September, UK businesses will soon benefit from preferential access across all twelve CPTPP member economies, creating one of the world's largest free trade areas spanning Asia-Pacific, North America and Latin America.

Collectively, CPTPP countries account for around 15% of global GDP and more than 500 million consumers. For exporters, the agreement opens new opportunities across manufacturing, consumer goods, food and drink, automotive, technology and professional services, while giving businesses greater flexibility to diversify international supply chains beyond traditional markets.

Gulf agreement strengthens access to a fast-growing region

May’s new Free Trade Agreement with the Gulf Cooperation Council (GCC) represents another important step in expanding Britain's global trading relationships.

Covering Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates, the agreement is expected to remove hundreds of millions of pounds in annual tariffs on British exports once fully implemented.

Products including food, beverages and consumer goods are expected to benefit from lower duties, while wider provisions covering digital trade, investment and business mobility should make it easier for UK companies to establish and grow commercial operations throughout the Gulf.

For businesses already trading with the Middle East, the agreement offers greater certainty at a time when the region continues to play an increasingly important role in global logistics and supply chains.

Switzerland opens new opportunities for UK exporters

The UK's latest agreement with Switzerland further expands opportunities for British exporters, particularly across agriculture and food production.

The new Free Trade Agreement removes or reduces tariffs on a wide range of British agricultural exports, including lamb, vegetables, dairy products, beef and sparkling wine, while also strengthening services trade between the two countries.

The agreement, which was finalised on 13 July is expected to increase bilateral trade by more than £7 billion annually, reinforcing Switzerland's importance as one of the UK's highest-value trading partners.

UK-US cooperation goes beyond tariffs

The UK and United States continue to strengthen their trading relationship through pharmaceutical supply chain agreement signed at the end of 2025.

The arrangement protects more than £5 billion of annual UK pharmaceutical exports from tariffs while creating closer cooperation on medicine availability, manufacturing resilience and regulatory alignment.

Beyond the life sciences sector, the agreement demonstrates a growing emphasis on supply chain resilience rather than simply reducing tariffs. Greater cooperation on trusted sourcing, manufacturing capacity and regulatory processes reflects the increasing importance governments are placing on securing critical supply chains in strategically important industries.

Turning opportunity into competitive advantage

Securing a trade agreement is only the first step. Real commercial success depends on understanding customs requirements, managing international logistics and building resilient supply chains capable of supporting long-term growth.

Metro helps businesses take full advantage of emerging global trade opportunities through integrated freight forwarding, customs expertise and end-to-end supply chain management. Whether you're looking at new sourcing options or expanding into Europe, North America, the Gulf or the Asia-Pacific region, our global network and local specialists help simplify international trade while reducing cost, risk and complexity.

To discover how Metro can help your business unlock new international trading opportunities, EMAIL Managing Director Andrew Smith today.

Category: Finance

Economics | Finance | International Trade | Metro | News

Latest News in this category