Tidmouth Harbour is deep, well-sheltered, and has been known for centuries as a safe place in which to take refuge during storms. Up until the late nineteenth century, the harbour was mostly used by smugglers who alternated as fishermen. The harbour's rise as a major commercial port was mainly due to the drainage system installed by A. W. Dry & Co.
By 1905, the Ulfstead Mining Company had become dissatisfied with Knapford as a port and adopted A. W. Dry's suggestion of extending their tramway along the coastal road to Tidmouth. A. W. Dry & Co, however, faced considerable opposition when wishing to use the harbour as a base. Boat building was among their various activities and they had produced a new design of fishing boat which fortunately found favour with the working men of Tidmouth. This resulted in an amicable arrangement. Supplies and equipment for the drainage project could then be brought in by sea via the harbour.
It was not until the formation of the double-tracked NWR in 1916, connecting Tidmouth at last with the outside world, that the harbour's potential was realised and its development could really begin. The port's growth was phenomenal, turning Tidmouth into the Island's commercial capital. During the 1950s and 60s, the port was heavily congested, which resulted in Sir Charles Topham Hatt redeveloping the harbours at Knapford and Arlesburgh to relieve and supplement Tidmouth.
Tidmouth Harbour is also a major fishing port, with the fishermen of Tidmouth having developed a special kippering process. Since 1935, The Flying Kipper has departed from there nightly to deliver fish across the Island and to the Mainland.