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At the end of a difficult year for much of humanity, the Irish and British had a reason to have a merry Christmas in 2020.
The news that a trade deal had been reached between the EU and the UK on Christmas Eve meant they could finally stop hearing about the ‘B’ word that dominated the news day after day for the past five years or more, or at least until I had to share the headlines with a new coronavirus.
Yet somehow, Brexit has only just begun.
The conversation is practically over, but the nuts and bolts of Brexit became apparent very quickly as consumers were suddenly faced with the occasional empty supermarket shelf in the early days of January and the news that Percy Pig may no longer adorn their bowls. sweets.
Unavoidable delays
With an entirely new trade regime coming into effect overnight, it was inevitable that there would be some ‘upfront problems’ and it would take a while to adjust.
British Prime Minister Boris Johnson told MPs just two weeks after the new regime came into force that the end of the Brexit transition period had not led to long lines of trucks at ports.
Despite your optimistic view of things, it is not the case that trading has flowed smoothly.
Here, the Treasury Department said earlier this week that about 80% of goods were now passing through ports here without delay, but that means a sizable minority of goods still require checks or more documentary evidence.
“It’s one in five trucks that would not have stopped before Brexit,” said Simon McKeever, executive director of the Irish Exporters Association.
“And remember, volumes are already down 30% to 40% at this time last year.”
The reduced volumes were explained by the traditionally quieter post-Christmas period, but also by the large amount of warehousing that companies had done over the past year to obtain them during the initial trading months after the end of the transition period.
He said carriers were reporting that the goods were stuck in warehouses in the UK because companies there did not have the correct documentation to export the product to Ireland under the new trade rules.
“Behind the goods supply chain is an information supply chain that includes codes and electronic paperwork. Companies don’t know what information they are supposed to provide.”
That, he said, was prompting shippers to return to Ireland with empty trucks, a situation that was confirmed by the Dixons transport company.
“For anything we collect in the UK, the challenge is getting Irish import clearance,” explained Brendan Dixon, COO of Dixon Transport.
“We cannot ship the trailer until import [clearance] in Ireland it has been done. We are having problems with UK clients relaying information on time because agents have gone home, are absent or too busy. “
As Dixons is an export-focused company, they have to return the trucks in time for the next load to leave Ireland.
That now means going back without a return burden that is costing the company and ultimately the exporter.
“We have run 180 empty trailers so far this month to keep service running for our export customers. At some point, we will have to say enough is enough.”
Slowly improving
Dixon said the situation had improved a bit as the month progressed, but it was still nowhere near where it should be.
The Head of Revenue Customs Operations at the Port of Dublin, Tom Talbot, said volumes arriving through the port have been steadily increasing.
“We know that some companies continue to trade successfully with Great Britain,” he said.
“And this has been largely due to their level of preparedness and also their ability to address the challenges that this new change has brought to all,” added Talbot.
However, even with extensive preparations, some companies still have problems transporting goods to or through the UK.
Daniel Plewman, CEO and co-founder of Happythreads, a company that makes scrubs for medical personnel, said that as much as € 70,000 of his shares, which were destined for the UK market, got stuck somewhere in the system in the early days of the new regimen.
“We are reshipping the product, so some customers might end up with the same order two or three times, but we have to try to get it.”
Plewman said it was his understanding that the product had left Ireland.
“We think the problem is on the UK side, but there is a little bit of everyone blaming others,” he said.
“It is especially frustrating because we invested so much to prepare for Brexit and nothing has changed.
“We wonder if we should have done something because it’s like our products are being treated the same as a business that did nothing and is shipping things and hoping for the best.”
He’s fixing the problem right now using a Northern Irish entity he created last year before Brexit, a solution that many companies seem to be adopting.
However, it is a temporary solution, as the controls will take effect on the traffic of goods from Northern Ireland to Great Britain from April.
Facing the abyss
Northern Ireland hauliers told a Stormont committee in recent weeks that the industry would face “the abyss” once the grace period ended in April and another in July.
They expressed serious concerns about financial losses incurred by carriers in the North due to the new customs requirements and additional delays they are already experiencing and warned that some companies could be forced to close.
That concern is also reflected on this side of the border.
McKeever said it was unsustainable for carriers to transport goods to Britain and return with empty trucks because goods get stuck in the system.
He believes the industry will see some consolidation as it adjusts to importing goods from markets other than the UK.
That will likely see changes in the use of the land bridge – delivering goods to the mainland by driving them through the UK – which Simon McKeever believes will never be used again to the same extent as before.
“Purely Irish-British freight across the Irish Sea was about 2 million trucks a year, while the land bridge was 150,000 trucks. That is a significant amount of international trade between the two countries,” he said.
“If it is still difficult to bring material from Britain, then over time companies will look to source outside of Britain and what does that mean? Who has the capacity and wherewithal to handle that?”
However, direct shipping to and from the mainland is limited by the availability of services at the current time.
Several new routes to France have been added in recent weeks, but not enough to meet the demand of exporters looking to bring material directly to the continent.
Dixon said that several of his clients who exported high-value goods, such as pharmaceuticals and medical devices, did not want to risk having their product stuck in the UK at the land bridge and were paying a premium to ship directly to France.
In his experience, there have been no significant delays to the land bridge since the new trade regime came into force and given the capacity shortage on direct ferry routes, he appealed to customers to consider going back to the land bridge.
He was more optimistic about the prospects for that route in the future.
“Once trust is restored, they will go back to the land bridge and find that they did not have to pay the additional premium for direct shipping. It’s just a matter of time.”
In the short term, minds are focused on the supply chain and ensuring that store shelves can stay stocked for months to come.
Some believe the problem could get worse before improving through mid-February, a particular tightening point here.
Then there are the April and July dates when the UK begins enforcing health certification and full physical inspections.
The reality is that nothing will rival the single market for the smooth transfer of goods, but until everyone is familiar with the rules, some level of continued disruption can be expected.
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