Friday, September 4, 2020

Logistics Industry Has Little Hope of Educating the Government on Brexit at This Late Stage

Whole of the Sector Writes to Again Try to Explain What is Coming
Shipping News Feature

UK – Concerns over the future of the logistics sector after Brexit has driven the leading organisations representing every part of the industry to write to the Chancellor of the Duchy of Lancaster, Michael Gove MP this week requesting a meeting with him alongside the Chancellor of the Exchequer and the Secretary of State for Transport.

The initiative from the Road Haulage Association (RHA) has apparently been backed by such as the British International Freight Association (BIFA), United Kingdom Warehousing Association (UKWA), Logistics UK, the British Association of Removers (BAR), Chartered Institute of Logistics and Transport (CILT), the British Vehicle Rental and Leasing Association (BVRLA), the Cold Chain Federation (CCF) plus some leading firms in the industry. RHA chief executive, Richard Burnett said:

“There are a range of critical issues the Chancellor, Michael Gove and the Transport Secretary need to address ranging from the SmartFreight app and other untried and untested IT systems, to the lack of customs agents and clear processes for tackling the mountain of red tape traders will face. The government’s pace is simply too slow on this and that’s why we, the people who run the UK’s supply chain, need an urgent meeting with those at the top of Government dealing with Brexit preparations.”

Whilst government spokespeople confidently express the view that investment in staff to ensure all customs formalities can be handled efficiently, they seemingly still simply don’t understand the difference between, for example, a freight forwarder and a customs agent. Before Britain signed up for the Common Market, at a time when traffic levels through the Channel ports were a fraction of what they are now, specialist agencies proliferated. BIFA for example had a hundred and twenty five members in Dover alone, now it has twenty five.

Additionally the £50 million which the government has set aside to train 50,000 entry clerks (equating to £1,000 each) is at a time when huge numbers of possible industry candidates are furloughed and there appears no chance whatsoever of achieving that target, or anywhere near it, by the end of the year. This is particularly the case as a raft of new systems, including the conceptual ‘Smart Freight’ for ensuring rapid transits either have not yet been built, or are reliant on completely untested IT systems, and we know the country’s record on such as those.

Smart Freight is one of eight IT systems which hauliers will need to use to move goods to and from Europe after 31 December 2020: these include four UK systems, and up to four other EU country IT systems, depending on their route and goods to be transported. Sarah Laouadi, European Policy Manager at Logistics UK, commented:

“Despite the government’s assertion that the Smart Freight software will be ready before 1 January 2021, this timeline fails to take into account the time it will take for transport companies, their customers, subcontractors and customs intermediaries to agree and co-ordinate the necessary business processes at the right time to gain access to the border. We are concerned that mass user testing of the software will not be possible until October, or maybe even November. This is far too late for the thousands of companies and tens of thousands of people who build our complex supply chains to redesign their own processes and contractual relations before the Transition Period ends.

”This timeline brings Smart Freight on stream at the height of the Christmas peak, traditionally the busiest time of year for the logistics industry, the worst possible time for our members to test and train staff in new working practices. Even if the software is ready by the end of the year, the government’s plans ignore the users’ perspective, our members will need time to learn the new system, adopt it and help to iron out any potential issues in the system.

”This will leave logistics businesses carrying the can for the government’s failure to plan in a timely fashion, something we have been warning about for some time now. We need the means to remedy the border readiness issues Smart Freight is intended to flag, as well as a much more joined-up and streamlined approach to the border with fewer, integrated systems. Without time to plan and implement new systems, the sector is being set up to fail at the start of the New Year, which is not what we expect or deserve.”

When the UK exits it will produce a sea change in the way goods are imported, short sea shipping and unaccompanied trailer movements will proliferate. This will mean the east coast ports in the UK taking on more traffic but the down side will of course be longer transit times. The thought of hundreds of drivers sitting in cabs waiting hours and possibly days for customs clearance is simply not tenable.

One part of the government plan seems to be based on drivers ensuring they have all the necessary paperwork in place before they arrive at a port. Anyone in the industry understands, in an age where drivers often do not even check freight details as the truck is loaded, will know this is totally impractical. A full load of groupage for example will have dozens of different consignments on board and can include hazardous goods, pharmaceuticals etc., all of which require specialist documents.

It is clear that, with some cargoes dependent on fast transits, temperature sensitive products such as food and pharma spring to mind, that clearance at the point of import will probably not work, and more customs clearances need to be handled by suitable facilities further inland. Furthermore the paucity of European transit permits available to UK hauliers will mean most accompanied work being done by European vehicles. In case of problems a British haulier may be able to drop the trailer and go home, impossible for say a Polish driver.

The government plainly has no concept of the many details which go to make up the international logistics trade, and particularly how delays can turn a reasonable job into a loss making nightmare. The signatories to the recent letter will argue that increased expenses for individual companies, and these must always end with the consumer, are simply not understood by the authorities.

Having spoken to some of the signatories it is clear that, despite them having different takes on how the matter should be resolved, they seem united that this government seems likely not to be able to find a solution as it appears incapable of understanding exactly what leaving the EU involves. Some indeed are simply resolved to waiting until July rather than December when the detailed customs entry systems will be fully in place.

What is plain to those of us who can remember the situation before we joined the Common Market, a trade only deal when no political tie ups were on the agenda, will doubtless all regret that, having established a collectively satisfactory system of free trade between a whole bunch of countries, the selfish whims of politicians mean they cannot negotiate to keep the status quo but would rather plunge into countless problems.

So we have history about to repeat itself. The first attempts by the original member states to turn the free trade agreement between them into a political union failed in the 1950’s. Since then we have had the treaties of Maastricht, Rome, Amsterdam etc., all politically based. The question remains if a deal on trade only signed in 1973 as the European Communities agreement (Common Market) which opened the door to free transfer of goods between member states without any political affiliation, was good enough then, why the devil isn’t it now?