Wednesday, July 12, 2017

Delays to Trade Talks During Brexit Negotiations Concern Road Haulage Freight Interests

Speed of the Essence for Logistics Industry
Shipping News Feature
UK – EUROPE – With the commencement of talks beginning last Friday to negotiate Britain's exit from the EU, concerns over the real effects which will impact on freight trucks passing into and out of the UK were raised by the two trade associations most concerned with such traffic. Both the Road Haulage Association (RHA) and the Freight Transport Association (FTA) spoke up to point out the immense problems which will ensue if matters are not well handled by both sides.

Last month talks got off to a poor start from a British point of view when trade was seemingly side-lined when the EU insisted that three other major elements are finalised before the future picture of export/import between the two was settled. Now trade will not be discussed until at least October, a blow to all concerned and a delay which will doubtless disappoint the lobbyists who spoke out after Friday’s opening gambits.

The RHA noted comments from the EU Chief Negotiator, Michel Barnier that ‘frictionless trade’ will not be possible after Brexit. He was quoted as saying leaving the customs union would in any case involve border formalities. This would be particularly damaging for companies that operate on a ‘just in time’ basis. For a manufacturer, this would mean keeping products in stock for three or four days instead of a few hours. The knock-on effects of which would be extra warehouse space rental and increased transport costs. RHA chief executive Richard Burnett said:

“Leaving the customs union and the single market will impose significant extra bureaucracy on businesses, resulting in friction and cost for all concerned. However, while extra costs for processing customs and other formalities are inevitable, these processes don’t have to interrupt the physical flow of goods. We expect businesses will be able to adapt to any new customs arrangements and systems to minimise costs and disruption to supply chains.

”It is essential to have clarity on what will be needed to ensure fluidity across borders and sufficient time must be given to deal with the extra work involved. Any reduction in service levels through supply chains will be catastrophic and punishing for business and trade. Businesses need to know that they can get the goods they need, when they need them. Any uncertainty over transit times, through ports or over the Irish/UK land border and must be avoided.”

The FTA picked up the same comments from Mr Barnier’s speech prompting James Hookham, Deputy Chief Executive of the FTA to comment in some detail on the possible pitfalls which lay ahead unless both sets of negotiators rise to the occasion. He said a ‘wait and see’ approach will not work for the logistics industry while negotiations continue on other elements of the UK’s departure from the EU, adding:

“Mr Barnier’s speech predicted full inspection of all loads entering Europe after Brexit. This should act as a wake-up call for those assembled at the Chevening summit. We are pleased that logistics and trade issues have been put back on the table by the European Commission and that the practical solutions to keep Britain trading with the European Union after Brexit can now be discussed. Working with its members, FTA has developed the priority areas and practical solutions that need urgent agreement to ensure the British economy does not grind to a halt after March 2019.

“A week may be a long time in politics but two years counts as short-term planning in most companies. [Friday’s meeting] marks the starting point for serious development of how the new trading procedures and formalities with the EU will work post-Brexit. We are calling on government to prioritise this dialogue to ensure that industry can continue to move goods and services where they are required to Keep Britain Trading.

“FTA members are very clear about what needs to be done to Keep Britain Trading: a ‘no deal’ walk-out by the UK Government, where full Customs checks are imposed literally overnight, is not an acceptable outcome. British consumers and businesses rely on the logistics industry to keep essential supplies flowing and production lines moving, and without proper consideration of the supply chains that feed, clothe and supply Britain there is a real risk that irreparable harm will be caused to people’s living standards and job prospects.

“The workload is huge. We need an immediate start on building the new Customs systems for the 300 million additional declarations that will be required to be made, the learning programmes for the 180,000 businesses that will need to learn how to use them. We need to get equal treatment of British goods by the 27 other Customs administrations across Europe and new 21st century approaches to inspecting and checking loads to Avoiding the need to check vehicles checks in our congested ports.

”Above all there must be no cliff-edge in arrangements while all this work is being undertaken. We need business as usual until the new arrangements are in place. The UK’s departure from the EU can be negotiated to ensure that frictionless trade can continue, provided the logistics industry is at the heart of the discussions. We urge Mr Davis to bear this in mind [during these] talks and works with industry to prove Mr Barnier wrong.”

Photo: Mr Barnier opens talks.