Freight News, Logistics, Business

Traders’ woes mount in post-Brexit world

[ February 12, 2021   //   ]

British Chambers of Commerce director of trade facilitation, Liam Smyth, says his members have suiffered additional costs in terms of both time and money, and many businesses had turned away from international trade as a result.

He told witnesses at a House of Commons International Trade Committee enquiry on 11 February that many firms – on both sides of the Channel – were reconsidering where they sourced material and components from.

Fergus McReynolds, director of EU affairs at manufacturers’ association, Make UK, agreed that traders were seeing extra costs while the level of disruption to trade caused by Brexit was even worse than anticipated. The deal signed by the UK and EU did nothing to protected the integrated manufacturing supply chains that had grown up during the single market era.

National chair of the Federation of Small Businesses, Mike Cherry said many problems now being seen were due to  the Eleventh Hour nature of the deal that was signed. Fergus McReynolds agreed, saying that the final draft of the very complex Roles of Origin were not received from Government until late December. As Rules of Origin have to be decided on a virtually case-by-case basis, it was virtually impossible to give companies any meaningful advice. Most FSB members have had no experience of Rules of Origin before 1 January.

Chief executive of the Food and Drink Federation, Ian Wright, said that figures received from the British Ports Association and the Road Haulage Association indicated that food exports by UK producers to the EU had probably declined by 50-60% in January. This could be partly explained by pre-Brexit stockpiling but it was nevertheless “a big number to recover in the next few months”.

William Bain, trade adviser to the British Retail Consortium said that exporters might eventually get to grips with new requirements such as the need for health certificates, customs declarations, safety and security declarations or the new VAT arrangements but he feared that some of the problems were more structural in nature and would result in considerably less cross-border trade than in the past.

He said that companies were establishing new entities in the EU and taking jobs with them.

Moreover, the UK still had to go through the imposition of import customs controls from 1 April: “Only then will we get a true sense of how the border will operate,” he told the committee.

Fisheries consultant, Terri Portmann, described the situation as “an unmitigated disaster”, with some seafood exporters shutting their doors and many others only just hanging on.

Chief executive of the British Poultry Council, Richard Griffiths, said that the customs clearance system that had been imposed on traders had never been designed for just-in-time trade with near European neighbours. Many poultry exporters had had their products rejected at Border Inspection Posts and in some cases had had them destroyed.

Portmann, added that the systems set up by Government involved fish trader rekeying the same information several times and moreover, veterinary certificates were expensive £150 for a pallet of cuttlefish, for example.

Richard Griffiths said that Export Health Certificates were often required in three languages and he was also concerned at the lack of government resources being allocated to their administration. He said: “Vets and officials have done an extraordinary job, given the circumstances, but there is just not enough resources…We have serious doubts about whether back offices are able to cope with their processing.”

Groupage traffic to the EU had been particularly hard-hit by the new trading environment, he continued. “To my knowledge, there have been very few attempts at groupage and it has proved the most problematic.”

Portmann said the situation  was similar for the fish trade: “Groupage has been most affected. Bigger operators doing full loads to one customer have had less of a problem.”

The trade had also suffered because of the delays in the supply chain. “For 40 years we’ve built trade on Day 2 delivery – we’ve gone to a Day 3 delivery…and it completely throws out the business model.”

The issues had been aggravated by the lack of customs agents in the EU, she added.

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