(Reuters) — If Britain votes to leave the European Union, the country’s shipping sector faces years of disruption as trade agreements get reworked and currency volatility leads to higher costs at a time when the industry is battling its worst global downturn.

Shipping contributes about £10 billion pounds ($14.23 billion) annually to the U.K. economy and directly employs 240,000 people in multiple areas including maritime services such as ports, transportation, as well as ship broking and marine insurance.

As several shipping segments struggle with worsening market conditions due to global economic uncertainty, a Chinese slowdown and a surplus of ships for hire, alarms are sounding over whether Britain will quit the E.U. in a June 23 referendum.

Renegotiating trade agreements with individual E.U. countries as well as the E.U. itself could take years following Brexit, which would also add to the burden on companies.

“No one has left the European Union before, and the E.U. may seek to ‘punish’ the U.K. for leaving, in order to discourage others from leaving too. The Brexit negotiations are unlikely to be quick or easy,” said Guy Platten, CEO of the U.K. Chamber of Shipping trade association.

“If it is lengthy, with tariffs and other penalties built in, then the consequences could be profoundly negative.”

John Nelson, chairman of Lloyd’s of London, said it was “fantasy” to expect bilateral negotiations to be simple.

“It would be impossible to do that except over many, many years,” Mr. Nelson told Reuters.

Legal experts said there were also likely to be complications over commercial paperwork.

“If existing contracts are drafted in a way that presumes the existence of an E.U. containing the U.K., or makes a reference to the E.U. without specifically defining what that is, such contracts may give rise to disputes as to the meaning or ambit of the contract,” law firm Ince & Co. said in a note.

Potential currency turmoil could also hit port operators given that over 40% of overall shipping traffic passing through terminals in Britain is with E.U. countries.

“The exchange rate could have some impact on trade and therefore on the volumes handled by the U.K. ports,” said Joanna Fic, senior analyst with ratings agency Moody’s.

“If sterling weakens, imports become more expensive. Given imports account for a larger chunk of movement of goods through U.K. ports, you could see some implications for domestic demand.”

Leading operators Associated British Ports and Peel Ports declined to comment. Scotland’s Forth Ports said it would “work within the outcome of the referendum”, declining further comment.

Single market

Britain’s Transport Minister Robert Goodwill told Reuters the shipping industry had benefited from the E.U.’s single market, which had brought fairer competition between shipping firms operating in Europe, cut costs for freight shippers and removed customs duties for U.K. shippers trading within the bloc.

That view was echoed by the City of London Corp., which runs the only global financial center to rival New York and last month formally backed Britain staying in the E.U.

“At a time of increasing competition in shipping markets, we want businesses in the U.K. to be able to keep their eyes strictly on doing business and not worrying about what ifs and a level of uncertainty,” said Jeffrey Evans, lord mayor of the City of London and a senior director with ship broker Clarksons.

Britain ranked in the top 10 of global ship-owning countries as of January 2015, according to the latest report by U.N. trade and economic think tank UNCTAD. The U.K. accounted for nearly 3% of the world total or just over 48 million deadweight tons, versus over 16% or 279 million deadweight tons held by Greece, the No.1 ship-owning nation, the UNCTAD report showed.

Danish shipping company DFDS, which has active business operations with the U.K., said it was better for Britain to stay in the E.U. given the potential impact on the wider bloc.

“We are concerned that Brexit will bring about a prolonged period of uncertainty which could in itself be negative for investments, trade and growth,” DFDS CEO Niels Smedegaard said.