Wednesday, July 31, 2019

No Deal Today's Top Subject with CBI Comprehensive Report and Comment from the Logistics Sector

All the Separate Parts of the Freight Transport and Shipping Professions Address UK Government
Shipping News Feature
UK – Nobody could accuse the freight and logistics community representatives of sitting on their heels as the Brexit No Deal scenario looms ever larger day by day. After our earlier report detailing the response of road haulage professionals comes comment from those of an ever wider perspective, starting with the response to the new Cabinet by the Chartered Institute of Logistics and Transport (CILT).

CILT says it does not lobby (although writing to Boris Johnson this week might be seen as such) and is apolitical being ‘totally impartial and modally agnostic providing evidenced based advice and guidance acting as a sounding board in policy development’ when addressing government. The organisation can however claim to have a wealth of experience in the field of logistics and therefore deserves a full hearing.

In a joint letter to the Prime Minister, Kevin Richardson, Chief Executive and Sue Terpilowski, Chair of CILT’s Public Policy Committee, offered any assistance required, and encouraged the Government to attain a deeper understanding of supply chains and the value of freight to the UK economy, to take practical and urgent action to prepare businesses for Brexit, and, as a footnote, to ensure the UK responds to the challenge of climate change.

The letter says CILT will support strong and decisive leadership and that having effective supply chains is vital in delivering many of the pledges made during the new PM’s leadership campaign. Its main concern is that across government there is little real understanding of supply chains and of the true value of freight and its contribution to the growth of the UK.

Since the referendum in June 2016, CILT says it has worked closely with the Department for Transport, Border Delivery Group and HMRC providing support and evidence based advice to enable Brexit planning to be prepared, and that this balanced expertise from amongst its members has been well received. Now there are several practical things which government must do to ensure British businesses are prepared for walking away.

The short-term border measures that were in place for March 29th to October 31st must be reset, with the variety of in-transit document control and vehicle load examination checks up stream of the port zones put in place, including pre-information on the motorway network that will minimise transit document failures and turn-backs for both the export and import environments.

The campaign to prepare the public for the likely effects of the exit should be substantially stepped up. The UK should extend short term measures for the ferry ports to all British ports, and deliver the upgrades to common customs IT systems necessary for handling substantially higher volumes of declarations.

Government must actively incentivise companies to become AEO businesses and make sure that HMRC are proactive in helping businesses achieve this; ensure the swift trialling and implementation of self-assessment for customs, agreement on increased benefits for the post Brexit UK AEO(C) and AEO(S) scheme along with new logo and getting it published, and not least ensuring that someone in government is standing by to get AEO Mutual recognition agreements signed for the first day after a no deal departure.

Whilst welcoming Sajid Javid’s review into the £30,000 salary threshold for immigrant’s post-Brexit, CILT asks that the authorities note that the logistics and transport sector relies heavily on non UK workers, has concerns over the future labour market and requires the continued ability to access EU and non-EU workers.

Meanwhile the Freight Transport Association (FTA) has outlined the importance of the industry at an exclusive meeting with Secretary of State for Northern Ireland, Julian Smith, at Stormont this week. With over 13,500 vehicles crossing the border every day, Seamus Leheny, FTA’s Policy Manager for Northern Ireland, stressed to Mr Smith the need for clarity over how goods and services will be moved after the UK’s departure from the EU, and whether permits will be required. He commented:

“Northern Ireland’s economy is dependent on a seamless supply chain and has many complex and interdependent relationships with businesses on both sides of the border. [This] meeting provided a great opportunity to outline the intricacies of the system to the Secretary of State, and highlight those areas which still cause concern for logistics businesses.

“70% of freight crossing the Northern Ireland border is classed as intermediate, ingredients, components and the like. As such it may require additional journeys in order to render finished products for sale, and it is vital that, at this late stage in the Brexit process, logistics businesses are provided with answers on how these vehicle movements are to be organised, the duties payable and collection methods to be used. Mr Smith listened closely to the concerns of industry, and has promised to provide the answers industry needs in a timely fashion.

“A No Deal Brexit would pose problems for our sector, as well as for others involved in today’s meeting, and we were all encouraged by Mr Smith’s willingness to engage with and understand our concerns. It is critical to the future success of Northern Ireland’s supply chain that FTA is involved in meetings like this, and we will be maintaining our dialogue with Mr Smith and his team to ensure that the country’s logistics industry is protected as far as possible as the UK leaves the EU.”

Meanwhile the body primarily responsible for the interests of the nation’s freight forwarding profession, the British International Freight Association (BIFA) said that the Confederation of British Industry’s (CBI) new comprehensive report with its 200 recommendations ‘hits the nail on the head’ with its warning that neither the UK nor the EU is ready for a no-deal Brexit on the proposed date in October.

Earlier this month the news that very few companies have registered for a new government online system designed to protect value added tax revenues on foreign parcels in the event of a no-deal Brexit led BIFA to question whether government is actually listening to advice from industry experts. Robert Keen, BIFA Director General commented:

“As the trade body that speaks for the sector of the economy that is responsible for managing the supply chains that underpin the UK’s visible international trade, we’ve been vocal in our concerns that our members cannot prepare for a no-deal Brexit, given the ongoing uncertainty over many issues that affect how they conduct that trade.

“In the last few days, we have a seen a completely new government installed, which is intent on the UK leaving the EU with, or without a deal. With less than 100 days to the Brexit deadline, departments in that new government must urgently step up their preparations, engage with and listen to trade associations such as BIFA, immediately step up their preparations and deliver clear advice on how trade will be conducted after October 31st, deal or no deal. Talk is all well and good, but what we now need is clear information and instructions.”

Photo: Secretary of State for Northern Ireland Julian Smith MP meeting Northern Ireland business leaders at Stormont, Seamus Leheny of the FTA is third from the left, directly opposite Mr Smith.