Post-Brexit trade rules face early testing

However, the real test of the UK’s new relationship with the EU will come in the coming weeks, experts and trading companies say, as shipment volumes increase and the gap between teething problems and permanent obstacles will widen. makes it more evident in one of the largest shops in the world. borders.

For the first time in almost half a century, goods circulating between the EU and the UK from 1 January have undergone customs controls and the need to comply with separate sets of rules and regulations. In an additional complication, goods moving to Northern Ireland — part of the United Kingdom — from the rest of Britain face controls, following a commitment to avoid a land border with the Republic of Ireland. , located in the EU.

Large UK supermarkets have marked only small disruptions in food imports, while the country’s ports report few problems with container traffic accounting for 60% of UK trade or problems with their other large companies. .

But many smaller companies in the UK that move goods to the EU by truck crossing the canal on ships or through the English Channel say they are experiencing additional costs and long delays, and worry that this will pose a permanent obstacle to its exports to continental Europe.

“In the ports themselves, the level of backward trucks is much lower than expected by the government, and the flow of unaccompanied goods, large cargoes, is largely uninterrupted,” said Tim Morris, chief executive of the UK’s Major Ports Group. United, a commercial body.

“But it’s too early to cheer, because you have to see this system tested at normal levels of trade,” he said.

Covid-19 closures, a post-Christmas calm and storage before the January 1 change mean shipments to ports in Kent, the busiest part of the UK border, which are set to 40% of typical volumes, according to government data from last week. . Mr Morris also believes some smaller companies do not go to ports because they do not have the right paperwork, further underestimating possible problems.

Under the new trade agreements, the British government estimates there will be an additional 215 million customs declarations a year (about 600,000 a day), which companies say will take time and cost money to get organized. Some companies will have to pay inspection fees, look for import licenses, and figure out how to account for value added tax. British food and animal exports to the EU will be reviewed on arrival.

For EU-based companies, the possible problems are not yet entirely obvious, as the UK does not initiate full customs controls until July.

For some British companies, they are already a reality.

White, the transportation manager for Whites Transport Services Ltd., said the truck carrying lamb had to wait 44 hours because of what he described as a minor discrepancy in cargo procedures. Ten of the company’s trucks have spent a total of an additional 135 hours in French ports awaiting permission to proceed.

“Extra time means extra costs … we are a family business,” he said.

Meanwhile, the UK marine sector complains that additional documentation has made it difficult to deliver fresh produce to mainland Europe before it goes bad, threatening the viability of these exports. To highlight their plight, the industry staged a protest on Monday driving trucks through central London, decorated with slogans criticizing the government.

Two of the largest logistics companies in Europe, DB Schenker and DFDS A / S, suspended deliveries to and from the UK because incorrect procedures created huge delays. DB Schenker said last week that the recipients of only 10% of goods arriving in the UK had the correct paperwork.

On Monday, DFDS had restarted its services in Britain. The problems occurred with so-called groupings, where smaller shipments are made in a single load and papers are missing that contain the entire truck, a spokeswoman said.

“The big shipments were fine and the systems were in place,” he added.

Supermarket chains, for example, say they have been preparing for Brexit-related changes for a long time and that food is moving on a regular basis, although there has been a shortage on the shelves in Northern Ireland.

Tesco PLC chief executive Ken Murphy said Britain’s largest supermarket had seen some disruption, but extensive supply chain and inventory planning meant it had “weathered the storm”. The company expects Brexit-related cost increases to be minimal, he added.

Business associations claim that smaller companies did not have their computer systems ready to deal with the new regime or legal and logistical experts to interpret the 1,500-page document of the new rules that landed on Christmas Eve, when London and Brussels agreed on new trade arrangements.

Lynsey Harley, executive director of Modern Standard Coffee Ltd., uses a transport company to make sure the specialist coffee maker documentation is in order, allowing it to export from Scotland to the EU with few problems.

“Before Christmas, we assumed there would be massive delays, but so far it has gone well,” he said.

The British government describes any disruption as teething problems. He says leaving the EU will allow him to benefit from concluding his own trade agreements and give him more control over policies like immigration.

However, some companies say that business changes are likely to present permanent challenges.

While Ford has not seen any disruption to ports, the new rules of origin, which set out where a product comes from, mean that two EU-made car models are now subject to UK tariffs because they have engines. Mexico. While these models account for a small share of the company’s UK sales, fares have added £ 1,500, the equivalent of about $ 2,050, to the price of these cars for British consumers.

Before January 1, Dartmouth Crab Co. he would land his shellfish on the south coast of England on a Friday, load the catches into the trucks and sell them to Portugal on Sunday morning. Today, it is said that the nine different documents you need on paper for each load – about 40 pieces of paper – and the controls at the French border mean that the fish can take until the following Wednesday to reach Portuguese customers.

“It’s easier to export to the Far East than to France, and that’s crazy,” said Mark Moore, the company’s manager.

—Saabira Chaudhuri contributed to this article.

Write to Alistair MacDonald to [email protected]