‘It will only get worse’: Post-Brexit cargo freight chaos

Cargo freight from France and Germany to Britain is down 50 per cent on the same point last year amid post-Brexit turmoil at border points and ports, a London-based accountancy firm has warned.

‘The Government needs to step up now and explain how this is going to be resolved’, Alex Altmann, a partner and head of the Brexit advisory group at Blick Rothenberg said.

Some businesses who usually send mountains of goods from overseas to Britain by lorry, ship and plane are now ‘avoiding’ sending those items here until they get more clarity from the Government on post-Brexit trade practices and costs, Mr Altmann claimed.

The boss of the British Ports Association, Mark Simmonds, has also revealed to This is Money that the BPA has today written to the Government calling for a crucial set of rules formulated by the EU and set in law in Britain via the Port Services Regulations, to be scrapped to ensure UK ports receive the investment they need to thrive.

Confusion: Reports suggest there has been disruption of trade between Northern Ireland and the rest of Britain since the Brexit transition period ended 

Time for change: The BPA has written to the Government calling for the Port Services Regulations to be scrapped 

‘It is a rational business decision that many freight forwarders now avoid routes to the UK and are monitoring how the new border situation develops’, Mr Altmann said.

He added: ‘Unfortunately, the UK Government has not done much to convince the transport sector that they have the situation at the border under control. From this point it will only get worse.

‘The numbers of freight forwarders who currently decline routes to the UK are dramatic and will have an impact on our supply chain situation in the weeks ahead.

Mr Altmann, who is also a chairman at the British Chamber of Commerce in Germany, also believes EU freight carriers need more guidance on how specific new customs rules work, particularly in respect of domestic deliveries across the Irish sea.

‘The guidance provided from HM Revenue & Customs is not good enough’, he said.

Mr Altmann added: ‘The new UK customs code says that EU companies cannot file import declarations and require an agent to do this. 

‘With a lack of at least 20,000 customs agents in the UK it is not particularly assuring for freight carriers that the new customs border will run frictionless once capacity increases. 

‘We need updated guidance from HM Revenue & Customs on how this particular issue will be handled.’

Avoiding Britain: ‘Many freight forwarders now avoid routes to the UK’, Alex Altmann, a partner and head of the Brexit advisory group at Blick Rothenberg said

On reports of disruption to trade between the mainland Britain and Northern Ireland, Elizabeth de Jong, a director at Logistics UK, said on Friday: ‘Issues which have occurred at the GB/NI border are due, in part, to businesses not having a full understanding of the new border requirements for moving goods to and from Northern Ireland. 

‘With only five days from the announcement of a new trade deal with the EU to the end of the Transition period, some confusion is inevitable, but it is now vital that government steps up communication with industry to ensure that loads can be dispatched with the correct paperwork and declarations.’

‘We need to secure investment for UK ports’

Mark Simmonds is the boss of the British Ports Association, which represents 86 per cent of Britain’s port freight activities. 

Mr Simmonds has revealed to This is Money that the BPA has written to Parliamentary Under Secretary of State Robert Courts to get him to reassure it that the EU-derived Port Services Regulations will be abolished for good in the not too distant future.

The Regulations came into effect in 2019 in Britain with the apparent aim of bolstering competition and financial transparency at ports all over the EU.

Scrap those Regs: The British Ports Association is calling for the EU-derived Port Services Regulations to be scrapped

The Government has previously vowed to axe the Regulations from the UK’s statue book, but the BPA is worried that this will not happen happen any time soon given the current situation with coronavirus. 

The BPA has long-campaigned for the Regulations to be axed, claiming they are not suitable for Britain’s port network, which is, unlike many other countries in the EU, independent from the state and ‘fiercely competitive.’

Mr Simmonds argues that the Regulations hamper investment into and competition between UK ports.

‘The UK policy framework supports ports competing against one another as separate entities, whereas the EU it is more common to have that landlord model with the competition being within an individual port’, he said. 

Summing up how the Regulations operate, he said: ‘It is like forcing Costa, Starbucks and Cafe Nero to offer each other’s coffee. 

‘That might seem reasonable if one of them overwhelmingly dominated all the others but there is already competition between them so there is no need to do that.’

Speaking to This is Money, Tim Morris, chief executive of UK Major Ports Group, added: ‘The UK’s ports sector is unique in Europe in the way its owned and operated, separately from the state. 

‘An opportunity to place alongside the challenges of the UK’s exit from the EU is to configure a rule book that’s right for the UK’s quite different circumstances. 

‘That includes repealing as soon as possible the EU Port Services Regulation, with its red tape and unnecessary bureaucracy. The UK can and should maintain high standards, but ones that right for our own ports sector.’

This is Money has contacted Parliament Under Secretary Robert Courts for comment.