The U.K. confronted threats of food insecurity and panicked shopping days before Christmas as European nations restricted trade and travel to guard against a resurgent coronavirus, offering Britain a preview of the border chaos to come in the absence of a Brexit deal.
Fearing a fast-spreading new strain of the virus that forced a strict lockdown across England, France on Sunday suspended travel from the U.K. for 48 hours and Germany halted arriving flights from Britain. The crisis gave renewed urgency to negotiations for a trade deal with the European Union that remained at a critical stage after weekend talks.
The Port of Dover late Sunday halted freight moved by truck into France while allowing unaccompanied cargo to keep moving. Though traffic into the U.K. is unaffected, truckers often run supplies in both directions and the latest outbreak in the heart of the country may discourage them from entering the U.K.
The disruptions are exposing Britain’s trade vulnerabilities just as a 4 1/2-year odyssey to leave the EU moves from political rhetoric to economic reality. Business groups facing catastrophic losses urged Prime Minister Boris Johnson’s government to act soon, with the 18,000-member Logistics UK calling for rapid Covid-19 testing of truckers departing the country as the quickest way of protecting supply chains.
“This is the nightmare before Christmas,” said James Withers, chief executive officer at the Scotland Food & Drink industry group.
Scottish Seafood
He said there are more than 100 trucks laden with seafood due to cross the border into the EU, bound for Christmas wholesale markets in France and Spain that would normally be held on Wednesday. Fears are growing that live shellfish will spoil if they’re held up at the border, and the government needs to act today to ensure that the freight can keep moving, Withers said.
Container ports and ferry terminals were already congested because of stockpiling ahead of the Dec. 31 deadline marking a final break from the European single market.
The border chaos comes at the tail end of a year that’s seen Johnson nearly die from the virus and come under heavy criticism over his response to the pandemic—which has seen the U.K. suffer the worst hit to output of any major economy as well as a death toll second only to Italy in Europe.
Grocers Scrambling
British supermarket chain J Sainsbury Plc said it is considering using air freight for products sourced from Europe. If the situation doesn’t change, Sainsbury will start to see “gaps” in the coming days sourcing some fruits and vegetables, said Victoria Durman, head of corporate communications.
Outside Dover, trucks began lining up on the M20 motorway as the “Operation Stack” emergency plan was triggered with drivers unable to board ferries. The Department for Transport was also preparing Manston airport in Kent, which is being overhauled to accommodate as many as 4,000 vehicles as part of Britain’s no-deal planning, according to the kent.gov.uk website.
Richard Ballantyne, chief executive officer of the British Ports Association, urged travelers to follow the advice of their carriers. “There could be a period of disruption at some of the U.K.’s ferry ports for the next 48 hours,” he said. “We are confident that the U.K. will continue to be supplied.”
U.K. travel, leisure and retail shares slumped on Monday, while stay-at-home stocks, like Ocado Group Plc, got a boost. Airlines that were expecting a lift around the festive period were among the worst hit, with British Airways parent IAG SA falling as much as 20% and Easyjet Plc down as much as 18%.
Weaker Growth
Economists at Berenberg cut their 2021 growth forecast for the U.K. just last week to 7.3% from 8% because of new lockdowns. On Monday, chief economist Holger Schmieding said the news over the weekend “adds to the near-term downside risks” but that he expects “a rapid snapback of activity once restrictions can be eased again meaningfully by spring at the latest.”
Transport Secretary Grant Shapps sought to downplay the urgency of the situation, telling Sky News the short straits between Dover and Calais account for about 20% of goods to and from the country.
“It’s not the mainstay. Most goods actually come in and out by unaccompanied containers, and those will continue to flow,” he said. “We obviously don’t want these links to be closed for too long, but it’s not unusual for them to be closed and disrupted.”
Asked about the vaccine, he said “virtually all” of it comes across via containers and is unaffected by the stoppage at Dover. Shapps said the French have told U.K. authorities they want to restart haulers crossing the channel “as quickly as possible.”
Still, the economic drag of tougher lockdown and trade turmoil will only deepen the hole the country is in, unleashing more damage stretching from mom-and-pop retailers to already struggling European airlines. The U.K. was the busiest in the region on Saturday with more than 2,200 flights, according to Eurocontrol, with London Heathrow airport having one of its busiest weeks since the first U.K. lockdown.
Grounded Flights
Ireland banned flights with the British mainland at least until Tuesday. Germany did too, and the Transportation Ministry in Berlin cited an EU directive that could keep the suspension in place until Dec. 31. Italy, the Netherlands and Belgium suspended air, train or ferry links.
Eurostar International Ltd., which operates passenger trains through the Channel Tunnel, will scrap services from London to Brussels Monday. Even before the new curbs, Eurostar had been operating a minimal service of one train a day in each direction on most routes to allow for emergency travel. Anyone leaving London faced quarantining on their return as well as possible restrictions at their destination.
Johnson abruptly canceled plans to allow families to mix over the holiday period as the government warned over the weekend that the new strain of the virus is “out of control.” There were scenes of panic at train stations, with people defying social-distancing rules to get out of the capital.
More than 16 million Britons are now required to stay at home, mainly in London and southeast England.The measures ban household mixing in the capital and the southeast, and restrict socializing to just Christmas Day across the rest of England.
Until Friday, Johnson was adamant that close households would be able to mix over Christmas. It was the latest U-turn from a government that has been reluctant to impose limits to movement, unless forced. There is some unease among his Conservative rank-and-file lawmakers.
Transmission Rate
The Covid-19 virus strain said to have triggered the tighter curbs on London may be as much as 70% more transmissible than others currently circulating, preliminary analysis in the U.K. shows.
The World Health Organization is working to understand the extent to which the virus may spread more easily, along with other human behavioral factors that may be driving transmission, Maria van Kerkhove, the body’s technical lead on Covid-19, told the BBC Sunday. She said that current information suggests that the new variant doesn’t have any impact on the vaccines being rolled out.
