Wednesday, February 12, 2020

Vision of Post December Customs Controls Means Freeports and New Stockholding Practices are Welcome

UK Warehousing Boss Speaks Out on Radical Solutions Required in a Post Brexit World
Shipping News Feature

UK – The government has confirmed plans to introduce import controls on EU goods at the British borders after the Brexit transition period ends on 31 December 2020. Speaking at a recent Border Delivery Group event the Chancellor of the Duchy of Lancaster, the Rt Hon Michael Gove MP, made it clear that the policy easements put in place to mitigate the risks of a 'No Deal' scenario are no longer on the table.

One person listening to that speech was Peter Ward, CEO of the United Kingdom Warehousing Association (UKWA) and the warning that, as soon as January next year, traders and their intermediaries will be required to submit customs declarations and be liable to checks on various products that enter and leave the UK has prompted him to comment.

The UKWA continues, as one of the major logistics lobby groups to work with government on such matters, to urge both its members and all other stakeholders in the supply chain to engage with it in a bid to shape the policies that will impact upon the way logistics companies operate in the coming years.

Should the negotiators fail to win a deal, and cynics will say this is almost a certainty given the views expressed by the EU which seems determined that Britain will not be given the same status as other non-European countries with approved trade deals. Just this week EU Chief negotiator Michel Barnier said that come what may the EU will impose checks at the border, ‘as it does with every other country in the world’.

In the light of this need for more documentation the UKWA estimates this will equate to more than 200 million additional UK customs declarations. This scenario is far from ‘frictionless’ and there seems little doubt that the changes to the way Britain trades with the EU is going to have a significant impact on most supply chains.

Ward says there will certainly be an interruption of the flow of goods, which to maintain equivalent lead times, is likely to be mitigated by companies holding additional inventory and, accordingly, demanding additional warehousing space. This is happening at a time when the market is almost at capacity as the industry recalibrates to accommodate the massive shift from high street retailing to online and ecommerce fulfilment.

He points out that the issues around new build warehousing are well documented, not least the time that it takes for real estate to come out of the ground, so while fully aware of the challenges the new world view will bring, the UKWA can also recognise the potential opportunities for its members and for the wider logistics community and calls on association members and non-members alike, 3PLs, retailers as well as real estate developers and industrial agents, to join in developing an imaginative, coherent response to the Government’s proposals.

Welcoming the initiative of government plans to open new Freeports across the UK, inland as well as adjacent to ports, he continues:

“We believe many companies with existing facilities and operations stand ready to meet the new challenge. For example, those already involved with food distribution could, if given the necessary policy framework, adapt to provide inland inspection depots.

”While land use and planning changes are most certainly required to allow for more warehousing nearer point of consumption, this is a longer-term strategy. Right now, we need to respond urgently to the spike in demand for warehousing services that inevitably lies ahead.

”Bottlenecks at ports seem inevitable as UK businesses grapple with the process, systems and documentation they will need to move their goods to and from the Euro zone, whilst both public and private sectors face the challenge of recruiting additional staff, knowledgeable and trained customs administrators within the logistics sector, and for HMRC and Border Force the increased workforce that will be needed to police the new customs formalities.

”With demand for storage space set to rise, it is more important than ever that policy makers, both nationally and locally, acknowledge the importance of the logistics industry and take on board the need for well-located, high quality warehousing and distribution facilities close to populations, reviewing land use, planning and infrastructure legislation to allow for the growth of the warehouse space that is required now and in the future.