Thursday, October 17, 2019

Is the Freight and Logistics Community Really as Incompetent as its Masters?

New Audit Report Paints Gloomy Picture of Post Brexit Britain
Shipping News Feature

UK – EUROPE – As the pace of negotiations quicken with the October 31 deadline drawing inexorably closer, this week saw the National Audit Office (NAO) publish its Preparedness for Brexit report, available as a full version or in summary.

This is the fourth report from the NAO since the first in October 2017 and commences with enough scary facts to give Herman Munster the willies. Should there be a no-deal outcome it estimates up to quarter of a million traders will need to complete customs formalities for the first time whilst as few as 30% of trucks travelling to and from France might be ready for the mandatory changes.

The current 55 million declarations to HMRC might jump to 270 million and as few as 5% of small and medium-sized enterprises may be ready for French customs, under the government’s ‘reasonable worst-case scenario’. Dark days ahead so we are told.

Of course this analysis show a degree of contempt for the plethora of freight forwarders who will be at the sharp end when this predicted doomsday arrives. It might be argued by the interested observer that the logistics community has been trying to point the way forward to both the British government and the EU since the original referendum.

The report apparently ascribes the same degree of incompetence to the freight community as the politicians and many civil servants have demonstrated throughout this whole sorry affair. Whilst the UK government says it has allocated ‘up to 1,000’ additional staff to Border Force to ensure the potential extra checks are dealt with, such imprecise numbers are hardly encouraging.

Not that the Europeans have covered themselves in glory, the French customs organised a go slow policy some months ago ‘because of the extra work’. So has the working day in France been extended? Or could it possibly mean those officers concerned might foresee a harder job? Or perhaps they were just indulging in that French industrial game of protesting at anything they didn’t like the sound of.

One of the first to comment on the report was the Freight Transport Association’s Pauline Bastidon, FTA’s Head of European and Global Policy, who didn’t seem too enamoured of the government performance, and went over some of the arguments the logistics sector has been emphasising for months, if not years. She said:

“The NAO report highlights the scale of the challenge for industry. It echoes’ FTA’s messages to government about structural issues that are slowing down preparedness, such as the shortage of customs brokers able to support industry in complying with new customs formalities or the lack of clarity on operational details, not least in relation to how the Irish border would be managed by the Irish Government in a no-deal situation.

“The situation is particularly challenging for UK exports to the continent and Ireland, especially for agri-food products, where a shortage of veterinarians able to sign export certificates is to be feared. In spite of the industry’s best efforts, delays and disruptions cannot be and should not be excluded, at a time when logistics and supply chain managers are less able to mitigate disruptions due to high demand for transport and warehousing capacity ahead of the Christmas period.

“Preparing also comes at a substantial cost, the government estimated last week that the cost of complying with customs requirements alone would be in the range of £7.5 billion per year for the UK industry, which is significant and will be particularly heavy for SMEs. These investments need to be considered in the context of the prolonged uncertainty around the final Brexit outcome. While funding for industry and logistics training in particular is welcome, financial support came late in the day and will not be able to compensate for the lack of operational details.

“And while everyone focuses on day one after a no-deal outcome, we should not lose sight of the future. Logistics currently has very limited visibility over the medium term as many of these arrangements have been deemed unsustainable, as highlighted in the NAO report, and even arrangements for road haulage and air freight are time limited.

“Despite FTA writing to Michael Gove on a weekly basis, we are still waiting for satisfactory responses on the majority of issues raised, both in relation to day one after no-deal and the medium term. The logistics industry is resilient and flexible but preparedness can only be optimal if our members have full clarity on what is being expected of them operationally and what to prepare for at the border and beyond. With 15 days remaining, the government needs to address these critical issues and provide the information needed to keep Britain trading.”