Border issues continue to hinder UK-EU freight flows
Customs clearance issues and other new administrative challenges continue to hinder the flow of goods at the UK-EU border almost three months since the new rules governing trade in the post-Brexit era were introduced, a leading European road haulier has told Lloyd’s Loading List.
“While there is more familiarity (with the new trading requirements), errors are still made by officials in the EU and UK, some of whom are unable to provide accurate guidance, and there continues to be a shortage of Customs agents,” claimed Jason Breakwell, commercial director at Luxembourg-based Wallenborn Transports, whose core business is the European air cargo road feeder services (RFS) market.
“This can result in longer transit times and higher costs. The initial problems and extra charges faced by small traders and UK exporters of animal and plant-based products have not gone away.”
He said the UK government decision this month to postpone the phased introduction of import controls from 1 April and 1 July this year gives traders and logistics operators some breathing space.
Closer alignment needed
“But we need closer alignment and simplification of processes,” he added. “For example, the integration of GVMS (the Goods Vehicle Movement Service) with the S&S (Safety and Security) GB service (which handles digital communications between customs administrators and carriers or their appointed representatives) before the UK introduces import controls in January 2022 would help, as would the alignment of the requirements of EU members states.”
He continued: “The expected chaos at Channel ports didn’t happen, so the Kent Access Permit needs to be ‘retired’.”
Breakwell also highlighted how the current arrangements also further increased the already substantial imbalance on UK-EU road freight trades.
He observed: “As long as controls apply at EU borders and not at UK borders, EU exporters have a significant advantage over their UK competitors.”
40% drop in UK-EU exports
The UK’s Office for National Statistics (ONS) recently published official figures highlighting the extent that UK-EU trade collapsed in January, including a more than 40% drop in UK exports to the EU, as traders and their freight and logistics providers adjusted to new post-Brexit trading arrangements and challenges related to the COVID-19 pandemic.
Asked if there was evidence of such trends in Wallenborn’s own volumes, Breakwell replied: “The vast majority of cargo we move from the UK is booked on flights from EU hubs to the rest of the world so it’s not UK-EU trade. We experienced a dip in demand during the first ten days of January but once it was clear our services were not disrupted, demand quickly returned and is currently extremely high.”
He continued: “The ONS data showed a slight increase in exports to the rest of the world in January in stark contrast to the 40% collapse in exports to the EU. Our UK export volumes (again, to the rest of the world) in the first two months of this year were up by approximately 6%.
“Demand for our services has been higher in every country this year compared with 2020 but this variance will settle down from March onwards as that’s when demand increased last year.”
But he rejected the idea that the UK’s drop in exports to the EU reflected a drop in overall trade, or that it was primarily due to pre-stocking ahead of anticipated post-Brexit border problems, noting: “The ONS stats show that UK trade outside the EU was not as heavily affected in January as trade with the EU27, indeed export values were better than every month last year except January.
Pre-stocking ‘red herring’
“I think pre-stocking is a ‘red herring’ because UK exports fell by 38% YoY whereas imports fell by 16%.”
He added: “It’s clear many traders are still not back to normal after Brexit and trade volumes especially from the UK to the EU are depressed by a combination of extra costs, longer transit times, extra Customs procedures and SPS requirements at EU borders.”
Various freight industry sources have highlighted that although UK-EU road freight vehicle numbers may have recovered towards their pre-Brexit levels, the numbers of trucks travelling from the UK to the EU had risen sharply. For example, at the start of this month, the Road Haulage Association estimated that trucks were going back to the continent about 40% empty compared to around 20% empty pre-Brexit.
Breakwell noted: “I’m not sure anyone can say whether the proportion of empty trips has increased because prior to this year, the contents of trucks weren’t reported as there were no Customs controls.”
He added: “We’ll need another two months of ONS data before we know if there is a structural problem.”
Other UK and European freight operators have highlighted that there appears to be a structural problem for groupage and smaller or lower-value shipments, as well as SPS goods, which appeared to be particularly affecting small and medium enterprises (SMEs). One freight specialist noted that “a lot of the small parcels and sole trader volumes selling B2C have dropped significantly with the high cost of export and import customs entries as well as VAT. It just doesn’t make the process worthwhile for goods with a purchase value under £500.” He added that stories of 40% of trailers travelling empty from the UK to the EU “may be accurate, but pre-Brexit, 25% were returning empty”.