Business, Freight News, IT, Logistics

Traders struggling with paperwork as EU trade slumps

[ March 12, 2021   //   Chris ]

Figures released by the Office for National Statistics (ONS) on 11 March showing a 40% fall in exports to the EU and a near 30% fall in imports during January – the biggest since the biggest monthly falls in both imports and exports from the EU since records began in 1997 – show the severe disruption as a result of Brexit, says a freight industry IT specialist.
James Coombes, chief executive of vector.ai – which works with freight forwarders and custom agents to process paperwork more efficiently – said that more than two months since the UK officially left the EU, businesses continue to struggle to adapt to the new requirements, with long delays at ports and, in some cases, perishable goods going to waste. “This is damaging their business and, quite frankly, it’s killing business morale in the supply chain too,” he added.
Government grants of a maximum of £2,000 to pay for practical support are “like applying a plaster to a wound. It doesn’t negate the fact that businesses still need to process the swathes of customs paperwork which demands hundreds – if not thousands – of employee hours. And, right now, there is a huge skills shortage that is yet to be filled. The government promised it would recruit 50,000 custom agents to help with post-Brexit paperwork but only 10,000 have been recruited so far. Our own customers are bearing the brunt of the increased form filling too. One freight forwarder has had to hire 40% more staff since the start of the year. For them, the £2,000 grant doesn’t even cover a fraction of the cost.”
He said that it was time to get rid of “archaic processes” and customs paperwork by using technology to automate data entry.
The ONS said that the fall in trade was the result of temporary factors. It said that there were notable reductions in imports of machinery cars, chemicals and even medicines and pharmaceuticals, despite the movement of the Covid vaccine from Continental manufacturers.
Logistics UK general manager of public policy, Alex Veitch said that the ONS figures were broadly in line with the survey evidence the association had gathered from member companies about the impact of Brexit on their work in early 2021. This showed that there were issues in January, perhaps caused by the implementation of new processes but also COVID-19 restrictions, but there have been improvements since then in the flow of goods across the UK’s border.
Chief executive of the One World Express platform, Atul Bhakta, meanwhile described January’s decline in exports to the EU as inevitable as businesses “were given precious little time to make practical preparations for Brexit” and changes to customs procedures, VAT charges and clearance regulations will have dissuaded UK and EU businesses from trading. Indeed, One World Express’ own research revealed 44% of UK businesses planned to cut trading ties with EU partners altogether.
But he added: “Nonetheless, there are reasons to be optimistic. At the moment, we are transitioning out of a challenging period. UK businesses are slowly adjusting to the UK’s new relationship with the EU. During this time, new opportunities are emerging, including new trading prospects in jurisdictions outside of Europe. High demand for “Brand UK” in South East Asia or India, for example, could prove very lucrative to some organisations.
“I have no doubt that the EU will remain an important trading destination with the UK, so businesses should not be disheartened by this temporary trading lapse. However, I urge businesses to explore all trading options available to them and seek advice from experts where necessary.”