On the day the U.K. makes its final break with the European Union, the ports are clear of truck backups, goods are moving smoothly and grocery-store shelves are well stocked.
Even so, U.K. businesses that rely on some 1.2 billion pounds ($1.6 billion) of products crossing the border each day are taking no chances. At 11 p.m. Thursday, Brexit gets real.
Companies were already stockpiling goods and exploring alternatives to the crowded truck-ferry route across the English Channel when France unexpectedly closed its border for two days last week, citing a fast-moving outbreak of Covid-19 in the U.K. The disruptions that ensued, producing miles-longbackups at the Port of Dover, served as a warning shot for potential chaos as the Brexit transition period ends.
In response, logistics firms have sped efforts to relieve pressure on truck traffic, stepping up air freight, container ferry and air-cargo shipments. With the New Year coming over a long weekend, concerns of an immediate repeat of last week’s spectacle have diminished. The port and its users will have the chance to ease into the new reality of a customs regime at the formerly open border.
“It should be quiet for at least the first few days,” said Richard Ballantyne, who heads the British Ports Association. “If there are blips of people turning up without the correct documentation, if it’s going to happen at any time, it’s better to be then.”
Brexit Border Chaos Forces Truckers to Shun U.K. Deliveries
The Complex Post-Brexit Path of Pecorino to London Restaurants
Brexit Deal Hands Business a Mix of Relief, Unwanted Change
Dover remains the U.K.’s most important link with the EU, the country’s biggest trade partner. Still, the amount of tonnage hasdeclined steadily — down 14% from 2016, the year of the Brexit vote, to 2019,Department for Transport data show. Meanwhile, other ports have gained business: Liverpool’s traffic grew 7.6% and London Medway surged 43%.
The unanswered question is what happens in the coming weeks and months. With Britain’s departure from the single market come a host of regulations and customs paperwork that threaten to gum up the free flow of trade and add costs for importers and exporters on both sides of the split.
The trend toward other ports and unaccompanied freight moving by train or ferry, along with supplemental air-cargo shipments of vital goods, is expected to continue into the new year, according to port officials and logistics firms.
Container volumes traveling between the port of Tilbury, on the River Thames east of London, and Zeebrugge, Belgium, have increased by a fifth in December, as firms sought alternatives to the short straits.P&O Ferries Ltd. has added an additional ship to the route to cope with demand.
Charles Hammond, chief executive officer of Tilbury ownerForth Ports Ltd., credits the pandemic with changing the logistics industry’s dynamics. Unaccompanied freight is “the answer to a number of the questions of our time,” he said.
Kuehne + Nagel International AG, one of Europe’s biggest freight-forwarding firms, has switched some goods from trucks to container ferries. Its drops off and picks up the goods by truck on either side, something some smaller firms aren’t able to do.
It’s still moving goods across the English Channel via roll-on roll-off truck ferries, after implementing software that’ll make it easier to clear customs. The amount of paperwork has increased five-fold because of the new procedures, Kuehne + Nagel spokesman Dominique Nadelhofer said.
Firms that rely on frictionless movement of parts are opting to maintain their stockpiles for now.
Jet-engine makerRolls-Royce Holdings Plc is holding onto 100 million pounds worth of additional inventory as it monitors the flow of goods over coming weeks, according to a spokesman. It’s not clear when it’ll return to normal levels.
Products that can’t be stockpiled for long remain a concern, while aircraft are being called on to clear up the remnants of last week’s shutdown. The cargo unit ofDeutsche Lufthansa AG will fly another Boeing Co. 777F full of urgently needed goods — fruit, vegetables, clothing, oil-field equipment, medical equipment and jet-engine parts — from Frankfurt to Doncaster Sheffield Airport in England on Thursday.
It’ll follow up with another 100-ton load of fruit and vegetables on Jan. 2 meant for supermarkets such asJ Sainsbury Plc,Tesco Plc, Co-op Food andAldi Stores Ltd.
Lufthansa Cargo has halted some truck shipments and is exploring ways to send freight from France to Ireland directly via ferry instead of trucking it through the U.K., which “currently makes little sense,” spokeswoman Jacqueline Casini said.
A potential shortage of truckers is a lingering concern from last week’s disruption, which stranded fresh seafood in trucks headed for Europe and sentfish prices haywire. Some drivers may be reluctant to return to the U.K. — many will “wait and see,” and others will expect more money to do the work, said Shane Brennan, CEO of the Cold Chain Federation, which represents specialists in moving frozen and chilled goods.
The acid test for British infrastructure will come next week, when traffic returns to normal levels, said Jimmy Buchan, Chief Executive Officer of the Scottish Seafood Association. “At that point buyers will be buying to export and replenish empty shelves,” he said. “Demand will be quite high.”
Ireland, which relies on truck traffic from the U.K. and through it from continental Europe, has hired 1,500 extra staff to deal with issues like tax and customs, as well as animal checks.
Irish officials warned of potential significant disruption to come as Brexit becomes reality. At a briefing on Wednesday, officials said little disruption is expected before next week, as many retailers had stockpiled supplies, but delays may take hold from there.
At Rotterdam, officials have set aside triple the parking area the port expects to need in case too many trucks show up with the wrong paperwork. Ninety percent of ferry users have signed up to its digital system, they said.
Despite the planning, some disruption is inevitable, said Tim Morris, CEO of the U.K. Major Ports Group.
“The ports and shipping companies are as prepared as they can be,’ Morris said. “Outside of our control is how prepared British businesses are and how pragmatic European nations will be about border arrangements.”
— With assistance by Charlotte Ryan, Ellen Proper, and Dara Doyle
Source: Read Full Article