CLECAT says its members are already used to handling trade with third countries, but a no-deal Brexit ‘will almost certainly lead to disruption, delays and extra costs in trade’
European freight forwarders and their representatives have expressed their concerns over the continuing Brexit uncertainty following the vote by UK British Members of Parliament to reject Prime Minister Theresa May’s proposed withdrawal agreement with the EU.
CLECAT, the European association for Freight Forwarding, Logistics and Customs services, said it was “disappointed with the outcome of the vote, which leaves the industry in further doubt”. Meanwhile, the association said the logistics sector – including logistics service providers and customs agents – is continuing to prepare for a situation whereby the UK will leave the EU without a transition period.
Dominique Willems, senior manager of CLECAT said: “Our members are already used to handling trade with third countries. In most cases they already have the competence, experience, permits (including for example AEO) and IT systems in place to deal with such circumstances. The challenges that remain are the amount of human resources needed and the preparedness of importers, exporters and other stakeholders in the logistic chain, which have limited experience in trading with third countries.”
He continued: “Over the past year, and especially over the last couple of months, various measures were already taken to soften the blow of a no-deal Brexit by both government authorities and the private sector stakeholders. Customs authorities in countries such as Belgium, France, the Netherlands and UK have recruited and educated additional employees.
“Various stakeholders such as port operators, transporters and freight forwarders have started good cooperation initiatives to ensure that, for example, any delays at ferry terminals can be minimalised or at least managed in the best possible way. Despite the preparedness of the logistics service providers, CLECAT still considers that a no-deal Brexit on 29 March should be prevented at all cost.
“Regardless of any preparatory efforts, such a situation will almost certainly lead to disruption, delays and extra costs in trade, and it will thus surely damage the economies of both the UK and EU.”
Detlef Trefzger, CEO of one of Europe’s leading freight forwarding and logistics group’s Kuehne + Nagel International, emphasised the importance of open markets, while noting that the UK’s House of Commons “has made a historic decision, which we need to respect”. He added: “Kuehne + Nagel is committed to global free trade in principle which ensures prosperity for everyone. So from our perspective, ‘No Brexit’ would be the preferred solution, since any form of Brexit is bound to increase trade barriers.”
But he said a disorderly Brexit would be “the worst solution”, adding: “It will impose massive restrictions on the exchange of goods between the European Union and the United Kingdom. We appeal to the responsible bodies in London and Brussels to do the utmost to prevent this scenario. As far as we are concerned, we are focussed on ensuring the constant flow of goods for our customers.”
He said Kuehne + Nagel had engaged customers and its own industry experts over the past years to assess all of the various possible impacts. “In order to cope with the effects of a disorderly Brexit Kuehne + Nagel has taken steps to review all options to secure capacity on trade routes with Europe outside of the Kent corridor both by sea and air,” the company said. “Moreover, the company has commenced recruitment of additional customs clerks.”
Kuehne + Nagel said it had been asked to participate and had participating in the UK Government Cross Border Steering Group “and will use this opportunity to define sustainable solutions as the set of Brexit conditions becomes clearer”. Indeed, Lloyd’s Loading List understands that the company has been one of the most consistent participants in this and other UK Brexit steering groups, a move that had also helped to guide the company’s own preparations for Brexit.
A company source told Lloyd’s Loading List that all efforts were now being madeto prepare for a no-deal scenario, because any other outcome would involve a withdrawal agreement and a transition period, which would mean no immediate changes would be needed.
“Will we be ready?” he asked. “We will certainly be more ready than if we were not making these preparations.”
CLECAT highlighted the EU Commission’s announcement on 19 December in which it proposed further steps towards implementing its Contingency Action Plan to mitigate some of the most significant damage that would arise from a no-deal Brexit scenario, including measures relating to road haulage permits, air freight, and several specific customs aspects. In cooperation with Member States and private sector representatives, the Commission is continuing these efforts, CLECAT noted.
Without a withdrawal agreement, the UK will become a “third country” to the EU as of 29 March, meaning that there will be no transition period or any other specific arrangements that could ease the exit of the UK from the EU. “However, just 10 weeks before that date, it remains unclear whether the no-deal Brexit will actually happen as various scenarios are possible like a delay of the UK’s exit, possible amendments to the Withdrawal Agreement or even no Brexit at all,” CLECAT added.