Just weeks from a potential Oct. 31 no-deal Brexit, the U.K.’s political system is close to breakdown with almost every conceivable outcome in terms of European Union departure date and trade terms still on the table.
As reported in FreightWaves, the shipping and logistics sectors are doing their best to prepare in this sea of uncertainty. And for Europe’s leading transport associations, that means seeking out marginal gains wherever they might be found.
Welcome news came this week when new measures were announced aimed at reducing the expected trucking and aviation chaos should the U.K. leave the EU Oct. 31.
On aviation, the U.K. Secretary of State for Transport Grant Shapps said the Department for Transport (DfT) would extend the U.K.’s air traffic rights for EU airlines until October 2020. The extension builds on arrangements announced in March this year, which pledged that air services between the U.K. and the EU could continue to operate as usual until March 2020, regardless of whether a new Brexit deal is agreed.
The European Commission also proposed extending the regulation ensuring basic road freight and road passenger connectivity between the U.K. and the EU until July 31, 2020. These proposals follow similar commitments already made by the U.K. government to ensure any potential disruption for hauliers is kept to a minimum after Oct. 31.
U.K.-based Freight Transport Association (FTA) welcomed the extensions but noted that with neither commitment enshrined by law, operators still faced huge uncertainty as they planned for the year ahead.
Pauline Bastidon, FTA’s head of European policy, said seven months was a relatively short time in business and the logistics industry remained wary that it could be left to face yet another cliff edge of uncertainty if a long-term proposal for future road and air access was not agreed to by the EU and U.K.
“It is undeniable that the new agreements will help maintain trading relationships in the short term and are better than no agreement at all, but they do not provide a long-term, sustainable solution for road haulage and aviation between the U.K. and EU,” she added.
“The new EU measures will not protect the current operating levels of U.K. businesses, many of which will find their access to European markets constrained, even with the new accessibility agreements. This is especially true for road haulage.”
The U.K. government’s pledge to spend a further £16 million to help businesses train staff to make customs declarations, and to help businesses which support others to trade goods to invest in information technology, also was greeted with muted applause.
The British International Freight Association (BIFA), which represents U.K. freight-forwarding and logistics companies, welcomed the funding but questioned government claims that it would result in more customs experts being on hand to help businesses on and after Brexit day as the government claimed.
“During our meetings with both HM Treasury and HM Revenue and Customs, BIFA has highlighted the concerns of our members regarding the capability of the Customs brokerage sector to increase capacity, at a time when that sector already faces a huge shortage of staff of suitable quality,” added BIFA Director General Robert Keen.
“We emphasized that it could take up to a year to train staff to be fully conversant to prepare a range of basic Customs declarations, even if there was a sufficient number of trainers to train those staff, as well as relevant courses for them to attend.”
In early August, the BBC reported that of an estimated 240,000 U.K. businesses that currently trade with the EU, less than 1,000 had applied for the grants made available in the first round of funding.
“Worryingly, an analysis of the latest funding by Yahoo Finance U.K. suggests that the applications process may mean that any finance from the latest range of funding may not be received until after the U.K. has already left and customs rules change Oct. 31,” said Keen.
“Yahoo Finance U.K.’s analysis suggests that the timescale of the application process seems to indicate that only companies which are able to source a quote for training and submit their applications by Sept. 10 can be confident of receiving their actual funding before U.K.’s scheduled departure date.
“That just adds to the enormous uncertainty and pressure that BIFA members, which are responsible for managing the movement of a large proportion of the U.K.’s visible international trade, have faced since the result of the Brexit referendum in June 2016,” Keen said.