Scrapping “Kermits”, fines, mountains of custom documents, driver shortages, phased implementation and new shipping routes are all part of post-Brexit trade…with lots more changes to come.
In late April, the British government removed with great fanfare a much-maligned bit of Brexit trade-related bureaucracy, when authorities scrapped “Kermits.”
In order to drive through the county of Kent, truck drivers were required to obtain permits that proved the haulers had pre-cleared customs to the European Union, and several hundred had been fined £300 (pounds) each for not having the paperwork. Kent is where both Dover and the Eurotunnel are located. The M20 motorway leading to the vital Channel crossing at Dover was a nightmarish scene of monumental traffic jams in the days leading up to January 1, when Brexit took effect. The French, worried about the spread of a new strain of COVID-19, closed their ports to haulers from Britain for two days beginning December 21.
In lifting the need for Kent access permits, commonly known as “Kermits,” the Department for Transportation trumpeted what it said was “normal levels” of trade.
True, traffic may have been operating well. However, that belied all sorts of post-Brexit realities: The British government delayed customs checks on imports until January 1, 2022. Covid-19had decimated tourist traffic between Britain and the EU. A truck driver shortage, made more acute by Covid-19, has limited the number of available haulers. And, British exports had plummeted. That was made all the worse because, in part, truck drivers were refusing to take loads to Continental Europe, fearing long delays, and in part because traders recoiled from the time-consuming process of clearing cargo for export.
More than a half year after Brexit ended borderless trade between the UK and the EU, the best that can be said about commerce and logistics is that it hasn’t been nearly as horrific as some had feared and those December traffic jams had presaged.
“There were a lot of people at the start of January who were saying that the supply chain to Northern Ireland was going to collapse within five days, crazy statements like that,” said Seamus Leheny, policy manager for Northern Ireland at Logistics UK, a trade association representing freight transport. “Over 200 days later, the supply chain hasn’t collapsed. It’s got stronger. And that shows the resilience of the industry.”
But that doesn’t mean it’s now completely smooth going. What’s more, much of what the British government has blithely labeled “teething problems” appears to be around for the long term.
“Things have changed and they’ve changed for good,” said Aidan Flynn, general manager of the Freight Transport Association Ireland.
But Flynn and others emphasize that logistics on both sides of the new UK-EU border are adapting as best it can. Routes are being refined and changed. Methods and procedures were tinkered with and improved. It’s driven digitization and advanced tracking and tracing, for example. It’s forced shippers and haulers alike to become more efficient and cut down on the number of pick-up and delivery points, easing layers of red tape.
“You want to remove as much of the admin as possible,” said Leheny.
One of the great ironies about the transition is that the pandemic actually provided some breathing space. The British economy in 2020 fell almost 10%, the worst performance in centuries and the steepest decrease among pretty much all developed countries. That decline continued into the first quarter of 2021, although it’s turning around now. Second quarter saw an increase of 4.8% from the previous quarter, while the Bank of England predicts the third quarter will be up by about 3%.
“The economy was so suppressed because of Covid, it afforded people and businesses [time] … to really get a grip,” said Flynn. “One was trying to find decent customs brokers and agents that would help their business. And two, putting new plans in place in terms of supply chains.”
Northern Ireland represents one of the most critical — and controversial — aspects of the free trade agreement. Under what is termed the Northern Ireland protocol, borderless trade and movement continues between Ireland and Northern Ireland, which is part of the UK. That means Northern Ireland still abides by EU rules and regulations, especially when it comes to foodstuff and live animal transport.
So, customs must now take place in Northern Ireland to insure British goods don’t enter the EU — or vice-versa — unchecked. The Irish Sea effectively becomes a border clearance, with British goods now checked at the Northern Ireland ports of Belfast and Larne.
So far, at least, the winners have been Northern Ireland exporters. In the first quarter of this year, exports from Northern Ireland to the Irish Republic jumped 60%, despite a Covid-induced economic drain. By contrast, British exports to Ireland fell by 13%.
British authorities unilaterally decided to delay their inspections and certification on fresh foods bound for Northern Ireland until a four-step phase-in. That begins in October with fresh meat checks and could last until 2023. That decision has irked EU authorities and appears to be simply an excuse to postpone the day of reckoning.
Alternatives to the UK “Land Bridge” 2
Getting goods from Britain through Northern Ireland to the Irish Republic has already meant significant additional paperwork, however. Archie Norman, the chairman of Marks & Spencer said on the BBC last month that the department store and grocery chain must now complete 40,000 pages of customs documents per week to move British goods into Ireland. That will triple, he said, in October. One mistake on a form, Norman said, could trigger an entire truck of 650 items from being denied entry.
The fate of the so-called “land bridge” remains uncertain. For most commerce, this is the long-preferred route in which goods travel by truck from Ireland to Britain and then onto the EU and vice versa. But since the advent of Brexit, the prospect of customs checks into and out of Britain has suppressed demand.
On the other hand, since the beginning of this year, direct ferry service from Ireland to France has been a huge success. This includes a new 24-hour service from the port of Rosslare, Ireland to Dunkirk, France, close to the Belgium border and just three hours from Paris.
While these ferries offer both driver-accompanied and unaccompanied trailers, there’s a noticeable shift toward unaccompanied service, according to Flynn. This provides better efficiency. It also helps alleviate a driver shortage that is only becoming more acute over time as competition by both revived industry and delivery services cuts into long-haul.
However, Flynn continued, “the land bridge has been coming back a little bit” in the last couple months.
Adapting to and Post-BREXIT Conditions
As they come to grips with cross-border trade in the post-Brexit era, logistics specialists are attempting to offer solutions that can more easily handle these new realities. For example, Leheny reported, freight forwarders want to modify the current practice of sealing a truck after customs inspection to being able to seal individual pallets, much as is done with airfreight. This would offer shippers greater flexibility as well as minimize the possibility of being held up at the border because of another shipper’s carelessness.
Shippers and handlers as well are counting on the possibility of a trusted traders scheme. This would enable accredited shippers to cross borders with simplified checks, and possibly self-certification, providing customs authorities with electronic access to processing and transport. It’s being bandied about as first a way to minimize disruption of trade from Britain into Northern Ireland and, eventually, a method of transporting goods from the UK to the EU.
However, there’s nothing to indicate that agreement on such a scheme is anywhere near completion and that would favor only the biggest traders, not the vast bulk of shippers.
“All we can do is keep our heads down, keep going and trying to prepare and plan as best as we possibly can,” concluded Flynn, reflecting the attitude of the logistics industry