By James Hookham, Deputy Chief Executive of Freight Transport Association (FTA).
The possibility of the UK leaving the EU after Brexit without an agreement on the country’s future trading arrangements is now becoming a very real option. And to ensure that goods and services can continue to flow freely across the UK’s borders, FTA, which speaks for the UK’s logistics sector, is urging the UK and EU-27 leaders, including the European Commission, to prioritise the formulation of urgent and co-ordinated mitigation measures. These need to focus on trading areas which will not be able to function without agreements, like air freight and international haulage, to keep trade flowing freely after the UK leaves the EU.
A no-deal Brexit would require new agreements to permit trucks, planes and trains to cross our borders with the EU, to keep goods flowing and shops, factories, hospitals and schools supplied with the products they need. Border delays and disruptions, as well as additional costs and red tape are serious worries for FTA’s members, but the biggest showstopper of them all would be drastic reductions to the international movement of freight vehicles and planes. The main priority for the logistics sector is to obtain clarification on how these vehicles, planes and freight trains are to operate cross-border after Brexit; simply saying that things will be sorted out or that both sides will take unilateral measures in isolation, as suggested repeatedly on the EU side, is no insurance or reassurance for businesses which are currently negotiating contracts with no knowledge of whether or not they will be able to provide the services they are committed to without market access being permitted.
With March 2019 drawing closer – and UK-EU negotiations making little progress – the government has now begun to reveal its no-deal contingency planning by publishing a series of White papers detailing its proposals. FTA welcomes the publication of these papers, not least because they will now help traders and logistics companies plan for the worst case scenario. They demonstrate that contingency agreements are needed to at least protect basic transport connectivity between the UK and the EU. It is clear that the government has made efforts to secure such agreements, either with the EU or with member states bi-laterally, and believes that now is the time for EU-27 leaders and the European Commission to recognise the need for these contingency measures for freight transport, a sector which supports the entire economy.
While these papers offer some level of helpful insight, there are still several aspects of the trade process that must be agreed if the economy is to be protected. The papers reveal UK driving licences would only be accepted in partnership with an international driving permit, which will cause unnecessary delays to the “just in time” logistics sector. And these permits will only be available at approximately 2,500 post offices – not the whole network – making it difficult for some operators to obtain the document. And as these permits will go on sale from 1 February 2019, it leaves operators very little time to prepare before Brexit day.
The UK relies on easy, fast access across the Channel to move the £274 billion worth of goods and services it exports to the Continent each year. But no clarity has yet been given on the of number British lorries that will be granted permits to and from the Continent. The UK could only be granted access to up to 1,224 permits overall – and when you consider up to 10,000 freight vehicles pass through Dover on peak days alone, it is easy to see how this shortfall would have significant impacts on both the transport industry and wider economy.
While FTA welcomes the government’s proposal to pursue bilateral agreements on permits, it would still impose administrative burdens and costs British hauliers simply do not need. In addition, there would be no guarantee these permits would cover all transport moving across borders.
The logistics industry is the beating heart of the economy, reliant on a fully integrated supply chain which keeps our “just in time” economy functioning. Any break in the chain could have significant implications across the UK. Most businesses and public services, such as shops, hospitals, and schools, rely on the transport industry to deliver the goods, services, raw materials and ingredients they need to operate. If an agreement is not reached, the short term impact could be a stagnation in the economy. Without vehicle permits, trading between the UK and the EU, its biggest market, would be severely curtailed.
FTA believes that a no-deal agreement should only be seriously considered once every opportunity to reach a deal has been explored and is urging government negotiators to press forwards towards an agreement which suits both the UK and the EU. The logistics industry needs a very real commitment from government that air and road agreements are at the top of the agenda in its negotiations. The delicate supply chain could crumble if agreements are not reached on several aspects of transport, including customs and border arrangements and the continuity of trade agreements and vehicle permits.
The longer negotiations take, the less time there is for logistics operators to implement the necessary legislation and operational guidance. The clock is ticking for business and there’s little time to reach a viable solution.
As an industry, logistics is a problem solver, and is prepared to work through the challenges which a no-deal Brexit would undoubtedly bring, but it is imperative that negotiators keep working towards an acceptable solution for both parties – and should this fail, towards minimal contingency measures to allow both the UK and the EU to keep trading
FTA will continue supporting its 17,000 members in their efforts to prepare for Brexit. To help operators understand and adapt to the changing international landscape, FTA has launched a series of exclusive International Road Transport Operator Conferences, which will take place at venues across the country in October 2018. For more information and to book a place, please visit www.fta.co.uk/irtoc