No-deal Brexit looms closer

London, UK: Britain’s logistics industry faces a potentially catastrophic future in the short term as Britain’s new prime minister threatens a no-deal departure from the EU, writes Global Cold Chain News joint editor Dean Stiles.

The UK’s Conservative party has chosen its new leader, who will today become prime minister of the UK. Boris Johnson has already appointed his cabinet which consists of mainly enthusiasts for a no-deal Brexit, Johnson’s declared position prior to his appointment.

He still faces the problem of a two deal majority and a House of Commons hostile to a no-deal exit from the EU. But the risk of a no-deal departure has greatly increased and logistics companies may soon have to face the consequences of this decision.

The impact of a no-deal exit on the UK’s supply chain will be enormous and certainly in the short term, near catastrophic. The Freight Transport Association, which is not given to sensational, warned that despite working closely with government over the past three years to develop contingency plans for a no-deal Brexit it remains “hugely concerned at the fragility of these plans and the state of readiness of traders, carriers and agencies on both sides of the border to implement them flawlessly as early as 31 October”.

The mantra, ‘no deal is better than a bad deal’ continues to be trotted out by politicians. But for the Road Haulage Association’s members, who, between them operate nearly half of the UK’s 496,000 trucks, the prospect of a future without a Brexit deal looks extremely bleak.

A no-deal Brexit will create massive problems for international hauliers – whether UK or mainland Europe based. It is time for a reality check, says the RHA. According to its chief executive, Richard Burnett, “The Dover Strait handles 10,000 lorries each day and processing them through the port is currently seamless.

“The stark reality is that if customs controls are put in place, it will take an average of about 45 minutes to process one truck on both sides of the channel. If that happens then the queues of HGVs in Kent will make the jams seen in the summer of 2015 appear as little more than waiting for the traffic lights to change.”

Government Brexit enthusiasts claim that Britain will maintain a free-flowing border at Dover by not imposing checks at the port. But that does not include the French authorities likely to apply EU border inspection and document rules.

The Road Haulage Association warns that British hauliers that make international journeys will be forced out of business, causing irreparable damage to the supply chain.

“The foods we take for granted, oranges from Spain for example will become an expensive luxury. Supply and demand for basic foodstuffs could even mean the introduction of food rationing. Is this just scaremongering? No. Could it be the death knell for the thousands of hauliers that deliver 98% of the UK economy? Quite possibly,” it says.

James Hookham, deputy chief executive of the Freight Transport Association said: “As an apolitical organisation, we do not dispute the decision of the referendum but we are convinced by our members that a ‘no-deal’ Brexit would be the worst possible outcome for the economy and is to be avoided at all costs. 

“We are however encouraging our members to prepare for all eventualities, but in order to do so, they need urgent action from government, starting with the extension of easements previously conceded for 29 March, some of which will have expired before 31 October.

“Many pieces of the “jigsaw” remain incomplete if traders and hauliers are to continue to operate effectively after 31 October, but government preparations seem to have stalled.  We need these procedures to be completed and pending questions to be clarified and answered as soon as possible Livelihoods are dependent on cross border trade, both in Ireland and on the mainland, and the clock is ticking if businesses are to adopt and adapt to new trading processes and learn new procedures.

“Most importantly, there needs to be certainty around the what will happen at the Irish land border for the haulage businesses that will be the first to cross it on the first morning of a ‘no-deal Brexit.”

A no-deal Brexit will create severe problems for Northern Irish businesses and oblige the Republic of Ireland to build border inspection posts, a report commissioned by Northern Ireland’s Department for the Economy and published last month has warned.

Firms will have “limited room for manoeuvre” as they face an array of export checks, inspections and declarations. It was a sobering reflection on the challenges if the UK leaves the EU without a deal, according to its authors, Eric Pickett and Michael Lux, lawyers who specialise in EU and international customs law. “In particular, it confirms the Northern Ireland civil service’s concern about the impact of EU tariffs on food exports to Ireland, and the ability of micro and small enterprises with no experience in customs procedures and operations to continue to export to Ireland,” said a cover note. More than 80% of small Northern Irish exporters trade only with the republic.

The study said Ireland would need to establish inspection posts close to Northern Ireland to monitor trade in animal and food products, raising the spectre of a hard border that has prompted alarm from politicians and police chiefs who worry about attacks by dissident republicans.

The report said use of technology such as electronic monitoring could be expanded but would not obviate the need for physical inspections. It also said the UK and EU could seek an exemption from World Trade Organisation rules requiring tariffs and checks, but that it would probably be temporary.

The EU has strict rules for checking animals and food products at border inspection posts (BIPS) near the point of entry. Ireland’s existing posts at Dublin airport, Dublin port and Shannon airport are more than 60 miles from the border. “Consequently, Ireland will have to establish BIPS which are closer to the border,” said the report.

The findings are a blunt reminder that there is no easy fix to the Irish border conundrum that has bedevilled the UK’s attempt to leave the EU.

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