As Brexit Vote Delayed Freight and Road Haulage Interests Speculate on What Lies Ahead

UK – EUROPE – In a week in which Voyager 2 has 'left the solar system', so the Brexit negotiations also enter uncharted territory. With the clock ticking so the European Court of Justice has ruled today that Britain can revoke Article 50 and cancel Brexit without recourse to the other 27 EU member nations. This on the same day that Prime Minister Theresa May has backed down on having a vote to commend her leaving deal which looked increasingly as if she would lose support and suffer a humiliating defeat.

The question now is how will this impact on the future of trade with the Continent? Judging by comments from those in the road haulage and international freight industry the picture is either increasingly bleak or potentially profitable, dependent on one’s position in the supply chain.

That vote of course may still happen. At the time of writing the PM is explaining her reasons for cancelling a vote that last week Downing Street assured all who would listen would ‘definitely go ahead’. For the meantime, confusion reigns as European Commission spokeswoman Mina Andreeva today said there would be ‘no further negotiation’, whilst parliament looks as if at the very least it will only support the current withdrawal agreement after including several, amendments, particularly the ruling that the so called ‘backstop’ will be able to be modified with a unilateral statement.

If the vote goes ahead, which it presumably must, and the amendments are compatible with approval of the agreement, then the government can go ahead and the UK leaves on 29 March 2019 as planned. If however the amendments are not compatible, or if the vote goes against the government, it will have 3 weeks to set out its plans, presumably after consultation with the EU negotiators.

The plans could include a second vote, renegotiation if the EU will come to the table, a general election or even a second referendum. The other alternative is the fabled ‘no-deal’ scenario which is what the freight sector is probably most concerned about. At a meeting in Lille today Richard Burnett, the Chief Executive of the Road Haulage Association (RHA) spelled out clearly a problem even more troubling than the paucity of transit permits being made available to UK hauliers, saying the situation was dire.

Earlier the Border Delivery Group, charged with ensuring border traffic can flow unhindered post Brexit, claimed although much extra customs paperwork will be needed, it’s hoped it can be done away from the border to avoid queues, saying it recognised the challenges but will prioritise 'flow and fluidity'. It claimed considerable preparation work had been done on contingency planning.

Telling a meeting of French businesses and officials at the Hauts de France regional government headquarters that this planning for road transport in the event of no deal was simply 'not robust enough', Burnett illustrated the potential problems by citing one case of a haulier who has 8,000 different shipments on a lorry, each requiring an Import and Export declaration and a Safety and Security Declaration. With 3000 trucks a week crossing the channel for that one firm alone that would mean millions of pieces of paperwork. He said:

”With each declaration taking 10 minutes you would need 170 people working 8 hours a day to process one load. Customs processes simply won’t work. It’s critical we keep volume moving in case of a No Deal Brexit and UK haulage businesses are deeply concerned about the lack of clarity and information.”

Of course in business every cloud tends to have a silver lining for somebody. The United Kingdom Warehousing Association (UKWA) has reiterated that a no-deal result will almost certainly mean boom time for the country’s warehouse keepers as firms stockpile goods. With customs clearances likely to be a major stumbling block it is far easier to clear goods in bulk, which theoretically takes no more time than for a smaller quantity and, if in a full container or truckload, means perhaps only one entry, rather than waiting for the problems of someone else’s shipment to be sorted.

The net result is that it may well be more viable to retain a stock of non-perishable goods in the UK, as opposed to ordering piecemeal when delays can be expected. UKWA CEO Peter Ward commented:

”We said from day one that whatever the outcome of Brexit, whether It’s deal, no deal, hard, soft, whatever, in the overall sense this will be good news for the warehousing sector because there’s inevitably going to be some sort of interruption in the supply chain.

“It’s not scaremongering, I think it’s just a question of separating out a little bit, if I dare say, the media frenzy from the reality. But, of course, businesses are preparing for that day one, no-deal, worst case scenario. So, there is an upsurge in demand.”

So, as we say, confusion reigns supreme, whether you favour Canada plus Two, the Norway or indeed the French option (the one where you simply agree terms then do whatever you want later with a Gallic shrug). Or of course it might be simpler just to emigrate and avoid the whole thing completely. The most oft heard comment from those we have talked to in the logistics industry is that the original status held by Britain, as a member of a Common Market with no political ties, is beginning to look like the Good Old Days, and somewhere it might be nice to return to.