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Were we ready for Brexit?

by Rolands Petersons
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The year 2021 began not only with an understanding that COVID-19 restrictions will last for some more time, but also with BREXIT – Great Britain leaving European Union (EU). BREXIT was not a sudden event and the fact that the situation on the borders between UK and EU will change was known for a long time, however, most of the carriers and state institutions were not ready for the actual situation, which created (or rather, continued) chaos in ports and near the Eurotunnel.

The carriers must observe their passport validity periods

Restitution of borders between UK and EU is not only a story of changes in customs work, fees and tax calculations, and other money-related issues, but it also includes a lot of small details, which were previously ignored by the carriers, but now have become critically important.

For example, the validity periods of ID documents and amount of time that UK drivers can spend in EU and vice versa. As stated on the official UK government website, the UK drivers that enter EU must have a passport that is valid for at least six months. Every UK citizen can stay in EU without visa on a condition that he/she does not spend more than 90 days in EU during a 180-day period. It means that every carrier must calculate how many days their employee (driver etc.) has spent in EU at any given time. It does not matter, if the port or airport is located in EU, the countdown begins as soon as you cross UK/EU border. From the 1st of October citizens of EU, EEZ countries and Switzerland will need to present their passports to enter UK. ID card will not be considered as a valid travel document anymore[1].

The number of documents required to cross UK/EU border has also significantly increased. Official UK institutions remind us that from the 1st of January movement of goods across UK/EU border in any direction is to be considered as export and import simultaneously. It means that all documents related to transport and entry of goods from one area into another must be filled and completed. Free movement of goods has ended here. This will create a great load for British ports and airports since all cargo from Europe goes there, while the goods from UK can go in various directions, which distributes the workload of document inspection.

Same old story

It became clear very fast, during the first days of January, that none of the parties have been completely prepared for the new order – institutions, cargo operators, carriers, export/import companies. Nobody. Preparation for the 1st of January was also affected by the chaos at UK/EU border at the end of December, which was caused by EU closing borders with UK due to fear of spreading the new COVID-19 type. The carriers were still processing the “Christmas jamboree”, but the 1st of January was already here – complete BREXIT.

Businesses felt consequences of BREXIT already in the first week – food deliveries were delayed due to issues with customs documents, logistics companies stopped sending goods, while the retailers found out that their delivery chains might have become obsolete[2]. After ten years in close cooperation the UK and EU carriers were suddenly forced to learn a lot in a very short time.

As stated by NewYork Times[3], a couple of days after the 1st of January the European delivery company DPD said it would stop sending packages from UK to the EU until at least the middle of next week as it tried to figure out new cross-border systems. While the retailer Mark&Spenser announced that due to the border crossing issues stores in Paris will not receive deliveries of fresh salad other food products from UK, while also saying sorry to their customers for limited availability of goods due to UK/EU imports legislation.

First to crack were the seafood (crustacean) producers and suppliers. On 18th of January, they came to Westminster to protest bureaucracy of BREXIT, which has caused delays of cargo deliveries to EU, which resulted in a lot of damaged goods and significant losses. Producers of crustaceans have calculated that currently delivery to the client requires 48+ hours, while previously it took only 24 hours.

Representatives of one company were delayed for 30 hours in France to fill 400 forms for one cargo of crustaceans for ten clients in Spain, said “Venture Seafood” director Garry Hodgson[4]. Before BREXIT most of the deliveries required a document of supply, but now each shipment requires an export health certificate, fishing certificate, customs permit, safety documents etc.

In addition, any carrier of mixed or combined cargo can be held at the border due to a single box having improper documentation. Due to this the importers have started to pay additional fees for empty trucks to ensure that the goods through Eurotunnel are delivered on time. This resulted in a movement of partially empty trucks between the countries. It also increases the number of trucks on the roads, because a cargo that could be previously transported by a single truck now is transported by two or even three trucks.

While waiting for the chaos on the borders to subside, many EU carriers have reduced or stopped deliveries from UK, which often results of empty trucks returning from UK to EU. The companies are willing to pay for the trucks to return empty because it is cheaper than to get stuck for 4-5 days in another country.

How will BREXIT affect the shipping industry?

Right now, probably no one can answer this question. Experts are studying data and making estimates, but none of them are optimistic. For example, survey by the Chartered Institute of Procurement & Supply shows that already in January drivers spent 3-5% more time at UK border than before. The experts warn us that the delays will only increase and create real problems both to the carriers and manufacturers of fresh products. Survey results also showed that more than a half of UK companies that import or export goods to EU have had delayed deliveries in January, mainly, due to additional paperwork.

The German logistics software company Transporeon tracks cargo truck movement in Europe in real time. Software Live Tracker summarizes GPS data and shows, how many time trucks spend in lines at each point of crossing. The executive director of the company Stephan Sieberi stated that: “a truck has value only if it moves”. If every day 10 000 trucks spend an additional hour on the border, it means that 10 000 truck working hours have been lost. “Waiting time increase by 5-10% in the port of Dover is a significant indicator for the logistics services providers”, said S. Sieberi.

In the middle of February BBC stated that the British government thinks that the worst has passed and that the total cargo flow has reached the levels of the last year[5]. BBC data shows that outgoing train traffic in the beginning of February was at 98% compared to traffic in February last year, while incoming land vehicle traffic reached 99% compared to the last year. Approximately 80-90% of trucks arrive to the border prepared for the new situation. Truck traffic from Kent to EU by ferries and through Eurotunnel in January and February reached 67% and 82% compared to the 2020. Ferry companies do not keep track of empty returning trucks, the estimates say that approximately 50% of trucks returning to EU are empty. French sources state that around 50-60% of trucks in Eurotunnel are empty. Before Brexit, the number of empty trucks has never exceeded 30%.

It is obvious that changes introduced by BREXIT and unusual effects of COVID-19 will continue to affect the shipping industry, thus all of the parties must actively follow the current trends and be able to quickly make decisions in these very volatile conditions.

Image by Elionas2 from Pixabay
[1] https://www.gov.uk/guidance/transporting-goods-between-great-britain-and-the-eu-guidance-for-hauliers-and-commercial-drivers#drivers-documents-licences-and-permits

[2] https://www.nytimes.com/2021/01/09/business/Brexit-British-economy.htm

[3] https://www.nytimes.com/2021/01/09/business/Brexit-British-economy.html

[4] https://www.theguardian.com/politics/2021/jan/18/fishing-trucks-protest-at-westminster-against-brexit-red-tape 

[5] https://www.bbc.com/news/business-56044610

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