Photographer: Chris Ratcliffe / Bloomberg
Photographer: Chris Ratcliffe / Bloomberg
On the day when the UK definitively breaks with the European Union, ports are free of backups of trucks, goods are moving smoothly and supermarket shelves are well stocked.
Still, British companies that depend on about £ 1.2 billion ($ 1.6 billion) in products that cross the border every day are not taking any chances. At 23h on Thursday, Brexit gets real.
The companies were already stocking and exploring alternatives to the crowded ferry truck route across the English Channel when France unexpectedly closed its border for two days last week, citing a fast-moving Covid-19 outbreak in the UK. The interruption produced kilometers long backups at Dover harbor – a warning shot to potential chaos when the Brexit transition period ends.
A policeman is at the entrance to Dover Harbor on December 31.
Photographer: Chris Ratcliffe / Bloomberg
In response, logistics companies have stepped up efforts to ease pressure on truck traffic by increasing airfreight, container ferries and air cargo shipments. With the new year coming on a long weekend, concerns about an immediate repeat of last week’s show have eased. The port and its users will have the chance to enter the new reality of a customs regime at the open border.
“It must be quiet at least for the first few days,” said Richard Ballantyne, who runs the British Ports Association. “If there are people showing up without the right documentation, if that is going to happen at any time, it is better than that.”
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Dover remains the UK’s most important link with the EU, the country’s largest trading partner. Still, the tonnage quantity has has steadily declined since the year of the Brexit vote – down 14% from 2016 to 2019, Department of Transportation data display. Meanwhile, other ports gained business: Liverpool’s traffic grew by 7.6% and London Medway increased by 43%.
Avoiding Dover
The unanswered question is what will happen in the coming weeks and months. With Britain’s departure from the single market comes a host of regulations and customs paperwork that threaten to obstruct the free flow of trade and add costs for importers and exporters on both sides of the division.
The trend towards other ports and unaccompanied cargo moved by train or ferry, along with shipments of supplementary air cargo of vital goods, is expected to continue into the new year, according to port officials and logistics companies.
Container volumes traveling between the port of Tilbury, on the River Thames, east of London, and Zeebrugge, Belgium, increased by a fifth in December, as companies sought alternatives to the short straits. P&O Ferries Ltd. added an additional vessel to the route to meet demand.
A military man checks the paperwork of trucks at the port of Dover on December 31.
Photographer: Chris Ratcliffe / Bloomberg
Charles Hammond, CEO of owner Tilbury Forth Ports Ltd. attributes the change in the dynamics of the logistics sector to the coronavirus pandemic. Unaccompanied freight is “the answer to a series of questions of our time,” he said.
Container Ferries
Kuehne + Nagel International AG, one of the largest freight forwarding companies in Europe, exchanged some truck products for container ferries. He goes down and picks up the goods on trucks on both sides, something that some smaller companies cannot do.
The company is still transporting goods through the English Channel using roll-on roll-off truck ferries, after implementing software that will make customs clearance easier. The amount of paperwork has increased fivefold because of the new procedures, said Kuehne + Nagel spokesman Dominique Nadelhofer.
Companies that depend on moving parts without friction are choosing to keep their inventories for now.
Jet engine manufacturer Rolls-Royce Holdings Plc is holding £ 100 million in additional stock while monitoring the flow of goods in the coming weeks, according to a spokesman. It is not clear when it will return to normal levels.
Grocery store route
Products that cannot be stored for long remain a concern, with aircraft being called in to clean up the remnants of last week’s shutdown. The charging unit Deutsche Lufthansa AG will fly another Boeing Co. 777F full of urgently needed goods – fruits, vegetables, clothing, oilfield equipment, medical equipment and parts for jet engines – from Frankfurt to Doncaster Sheffield airport in England on Thursday market.
Photographer: Ralph Orlowski / Bloomberg
This will be followed by a load of 100 tonnes of fruit and vegetables on January 2, destined for supermarkets like J Sainsbury Plc, Tesco Plc, Co-op Food and Aldi Stores Ltd.
Lufthansa Cargo is exploring ways to send cargo from France to Ireland via ferry instead of transporting it across the UK, which “currently makes little sense,” said spokeswoman Jacqueline Casini.
A possible shortage of truck drivers is a persistent concern with last week’s interruption, which stranded fresh seafood on trucks bound for Europe and shipped uncontrolled fish prices. Some drivers may “wait and see” before returning to the UK and others will demand more money, said Shane Brennan, CEO of the Cold Chain Federation, who represents carriers of frozen and chilled products.
The UK government on Wednesday extended a commercial credit insurance program that protects sellers against non-payment, a move that will provide additional support to the supply chain.
The definitive test for British infrastructure will take place next week, when traffic returns to normal levels, said Jimmy Buchan, CEO of the Scottish Seafood Association. “At that point, buyers will be buying to export and restock empty shelves,” he said. “The demand will be quite high.”
Ireland, which relies on truck traffic from the UK and across it from continental Europe, has hired 1,500 extra staff to deal with issues such as taxes and customs, as well as animal control.
Irish officials have warned of possible significant disruptions that will occur as Brexit becomes a reality, although delays may not occur until next week. Two new ferries Rosslare’s service to Dunkirk, France will begin on Saturday, increasing one that has already been added.
In Rotterdam, authorities have reserved three times the parking area the port expects to need for trucks that appear with the wrong paperwork. Ninety Percent of ferry users signed up until their digital system, they said.
Despite the planning, some disruptions are inevitable, said Tim Morris, CEO of UK Major Ports Group.
“Ports and shipping companies are as prepared as possible,” said Morris. “Out of our control is how well prepared British companies are and how European nations will be pragmatic about border deals.
– With the help of Charlotte Ryan, Ellen Proper and Dara Doyle
(Irish ferry updates added in 21st paragraph)