Brexit’s done – or is it?in Trends by Andrew Craston
Boris Johnson’s winning election slogan, “Get Brexit done”, is now reality. But is Brexit really done? And how will it impact ports and supply chains?
Spot the famous White Cliffs of Dover in the distance? This was a sight at least 10,000 lorry drivers waited many days to see around Christmas 2020. They were stuck in massive queues on the motorway to Dover or forced to park at Manston Airport far from the port. Some ended up spending Christmas in their lorries before they could cross the Channel. What went wrong? Britain’s Health Minister, Matt Hancock, had issued a panicky statement on the new corona virus mutation (“We’ve lost control!”) and many countries closed their borders to road, rail and air travellers from Britain. France shut the Port of Calais and the Eurotunnel. Was the resultant chaos a foretaste of Brexit’s impact on ports and European supply chains?
Many of the trapped lorry drivers believed France had closed Calais to force Boris Johnson into signing a last-minute Brexit deal. Some political commentators on both sides of the Channel agreed. Whatever France’s motivation, the fear of empty shop shelves galvanised the British government into action. Late on December 24 a deal was signed – probably the first trade deal in human history to introduce more barriers to trade and customs complications than remove them. But the general view in the UK and EU is that even a bad deal is better than no deal. Resigned before Christmas to a repeat of the blockade from January 2021, every trader, forwarder and lorry driver is now relieved that the worst didn’t come to the worst. But what exactly can we expect to happen now that the UK has “taken back control of its borders”, as evangelistic Brexiteers have been preaching for years?
The indisputable facts
47 years after joining what was then the European Economic Community, the UK has finally left. But in nearly half a century of trading links, it has become heavily reliant on trade with the EU. For example, 74% of UK food imports were from the EU in 2019, and the UK-based car industry is totally reliant on just-in-time parts’ deliveries from European factories (e.g. engines for BMW Minis built at the plant in Cowley, Oxford, come from Holland). The erection of borders between Britain and Europe and between Britain (i.e. England, Wales and Scotland) and Northern Ireland (NI) will have the most significant impact on trade. All these borders now involve customs declarations being filled out and checks carried out on goods transported to and from Britain. However efficient the border processes turn out to be, they will cost significantly more port time than borderless travel. Two factors, software and space, are bound to impact ports most.
Clogged up customs
The British government has been good at shouting about “getting Brexit done” but done little to make it happen in practical terms – much to the annoyance of the Confederation of British Industry (CBI) and the UK Major Ports Group. The software being developed for Brexit, the Customs Delivery Service (CDS), was not ready by the end of 2020; the additional space required to process lorries waiting to board or leave a ferry at a British port did not exist either. Anybody who has travelled through the Port of Dover – 22% of all EU imports and exports – knows how cramped conditions were in pre-Brexit days. As the Christmas chaos revealed, the British government had failed to get urgently required facilities ready in time. Lorry drivers stuck for days on the motorway to Dover had little or no access to toilets, washrooms, food and drink. The much-acclaimed handling centre for EU-bound lorries in Kent was nothing but a sea of mud in December.
As yet, it is impossible to predict the longer-term impact on European supply chains. The prophets of doom were proved wrong in the first days of January when no noteworthy delays were recorded at Dover or Holyhead, the most important ferry port for Ireland. However, traffic is always light in early January with only around 1,000 lorries leaving Dover per day, as opposed to 6,000 on normal days and 10,000 at peak times. Besides, numerous forwarders and hauliers were reported to have decided to delay journeys until they had sorted out all the red tape. On 13 January, a UK Food and Drink Federation spokesperson told Parliament’s Brexit Committee that a job that typically took three hours before Brexit was now taking five days, even for big companies. These delays are now making Scotland’s live seafood exports unsaleable to the major customers in France and Spain because the fish is dead before it reaches the wholesale market in Boulogne, for example.
Once the necessary customs and documentation procedures are up and running, the time lost at ports ought to be minimised. But just-in-time supply chains in the fish, food and car industries, for example, are certainly being badly affected. After ports like Felixstowe and Dover have acquired the necessary land and expanded their facilities, they should be able to handle incoming and outgoing trades more efficiently. At the relevant continental ports, the procedures and facilities are already in place.
Trust the key factor
Successful trade is based on mutual trust. Since the 2016 Brexit referendum, the UK government has destroyed a lot of trust in Britain’s reputation for fair trade through xenophobic rhetoric and the move to unilaterally break a treaty signed with the EU. This lack of trust may well have a longer-lasting impact on UK-EU trades than the current post-Brexit hiccups.