As cross-Channel freight volumes return to normal levels and forwarders, hauliers and exporters struggle with hugely changed systems, UK government modelling predicts an increase in truck tailbacks and shipment backlogs.
As UK-EU cross-Channel freight volumes return to normal levels and forwarders, hauliers and exporters continue to struggle with hugely changed systems, UK government modelling predicts an increase in truck tailbacks and shipment backlogs in the coming days and weeks. And freight forwarding sources believe the problems will continue for weeks or month, as exporters and forwarders deal with complex changes.
Although the main UK-EU Channel ports may be relatively quiet currently, with little sign of previously forecast long lines of backlogged trucks, behind the scenes, drivers and shipments are being held up at warehouses and depots in the UK and Europe because they lack the right documents.
As highlighted in an article today published in Lloyd’s Loading List and the company’s own website, Metro Shipping’s business development director Grant Liddell noted that exporters and freight forwarders have been dealing with significant changes that now make it “arguably simpler to send something (from the UK) to Ghana than it is to send something to Germany”.
He notes that the free trade agreement (FTA) between the EU and UK was only agreed on 23 December ahead of the end of the Brexit transition period on 1 January, “and even with retailers and manufacturers stockpiling – in anticipation of issues in the new year – the lower traffic has not stopped fallout. Citing problems with new border regulations and processes, a number of courier, pallet, and freight carriers are not accepting UK-bound consignments and the cost of moving full truckloads from France to the UK rose significantly above the third-quarter average last week.”
After the initial lull, he noted that “demand for transport with Europe increased last week to 78% of the average for the time of year, and there is a likelihood that rates will increase even further as a result of Brexit”.
Sharp learning curve
As with any new processes, he acknowledged that the first few weeks “are always going to be a sharp learning curve, and the new UK/EU requirements should soon become the norm; but we are dealing with complex changes and it’s arguably simpler to send something to Ghana than it is to send something to Germany”.
He added: “The new regulations add complexity and process, which increases time, resource needs, and costs. And it’s not just about ensuring compliance. Our objective is to find a way to support our customers, whilst keeping their customers happy and delivering as close to the level of service standards as pre-Brexit.”
“Under the new rules, shipments should be pre-cleared and rules of origin will be enforced, with EU officials on the lookout for third-country products and components – which is why it is critical that all commercial invoices carry an appropriate declaration of origin in the specified format that we have advised over recent months.”
Despite the efforts made by freight forwarding and logistics companies to help inform their clients prior to the 1 January, Alan Williams, director of UK freight forwarder Davies Turner & Co said there were still a significant level of unpreparedness, especially among EU-based companies.
“We have been surprised just how un-prepared both European (EU-based) hauliers and (EU-based) exporters are; we expected far more compliance regarding paperwork than we got. The time spent checking and getting the correct information is causing all deliveries to be delayed by at least four days. Export is running much better as we don’t load or depart our trailers until paperwork is complete thus giving it clear route.”
Sternest test ahead?
And the UK-EU border processes could be about to face their sternest test since the Brexit transition period ended on 31 December. UK government modelling indicates that cross-Channel freight will begin to return to normal in the coming days, raising the prospect of tailbacks at ports and other disruptions if lorry drivers continue to arrive without adequate paperwork or negative COVID-19 tests, The Times reports, quoting “a source close to the Cabinet Office”.
At the worst point in the past month, one in five lorries bound for the EU was turned back from the UK border because of incorrect paperwork or because the driver could not produce a negative COVID-19 test, the source added. But now that stockpiles have been depleted and cross-Channel trade is picking up, officials at the Cabinet Office’s border and protocol delivery group have put logistics groups on high alert.
Stephen Bartlett, chairman of the Association of Freight Software Suppliers, said: “We’ve been lucky so far. Traffic volumes through ports have been quite low. But the next couple of weeks are going to be the main test.
“There could be more disruption as trucks come through that aren’t prepared with paperwork or drivers who haven’t been tested for COVID. There will be more issues. Then we could see some of these lorry parks starting to fill up.”
And a digital sumulation by technology firm Simul8 estimates that once post-Brexit volumes recover, trucks heading to the port of Dover could find themselves stuck for up to 20 days in a 70,000-long truck queue, unless new infrastructure is built, extra staff hired and considerable cargo volumes diverted to other ports, one freight trade publication has reported. That compares with the UK government Cabinet Office’s own previous worst-case predictions of 7,000-long truck queues.
Shortage of trained staff
Liddell highlighted that logistics and freight sector associations have long been warning of a shortage of trained staff to fill out the extra expected 500 million customs declarations that are now required each year for goods moving between Britain and the EU.
He added: “The shortfall in customs brokers is massive and has left many shippers unable to find the support they need. EU border authorities insist that trucks arriving from Britain have been almost totally non-compliant in terms of permits and paperwork and have been sending non-compliant trucks back to the UK, yet many exporters are struggling to acquire the required transit documents, because of a shortage of agents with the authority to issue them.
“Transit documents, which allow goods to enter the European Union without delay require Custom’s authorisation and a financial guarantee, to cover any taxes or duties on the goods being moved — but they have almost all been committed and firms wanting to apply for a transit guarantee or increase the size of their existing one have struggled because of delays at HMRC.”
Challenging situation
The British International Freight Association (BIFA) indicated that its members had highlighted significant problems, but it too early to draw firm conclusions.
“Whilst there are clearly many issues, there is nothing substantive for BIFA to say at the moment on the current situation, which is still in a state of flux, and it will take some time before a realistic picture emerges,” a spokesman commented. “So, it is too soon for meaningful analysis. Anecdotal evidence from BIFA members suggest that it is pretty challenging but it has been clearly signalled by the government that there will be disruption to begin with as people get to grips with the changes.”
Liddell said Metro was “monitoring the cross-channel situation closely and continue to submit import and export customs transactions through our CuDoS system, to keep our customers’ European supply chains optimised and moving. Our platform is getting slicker as the experience builds and the rules of trade and transport become clearer on a daily basis.”
Meanwhile, DB Schenker, which last week identified “significant problems” relating to the new customs formalities, today announced it was lifting the temporary hold on the acceptance of orders for land transport consignments to the UK.
“Following a brief suspension of the system freight network, DB Schenker resumes collecting compliant land transport shipments from the European Union to the United Kingdom from January 21, 2021 onwards,” it said in a statement.
Cyrille Bonjean, head of Land Transport Europe at DB Schenker commented: “Resuming the service is made possible by working together closely with our commercial and industry partners on gathering end to end contact and customs information, which are essential for customs clearance”.
DB Schenker underlined that shipments to the UK will only be accepted and collected if the necessary minimum exporter and importer documents have been received and are correct. To support its customers, DB Schenker is providing a “comprehensive document describing the minimum required information which must accompany every shipment to the UK.”
Cyrille Bonjean said that DB Schenker had opted to provide transparency “by actively communicating the multiple customs paperwork challenges that European and British industry were facing, instead of just hoping for the best.”
He added: “By making the hard decision to suspend shipment collections for a short period, we were able to protect our transportation network from potential tailbacks affecting transshipment platforms in the whole of Europe”.
However, significant difficulties are said to be continuing in processing the new paperwork related to the post-Brexit UK-EU trading regime and the customs clearance of goods, particularly for food, drinks, cosmetics and perfumes.
A spokesperson for DHL Express told Lloyd’s Loading List: “Currently we’re seeing a high number of shipments requiring sanitary and phytosanitary checks being held by customs authorities in the EU. As a result, we are temporarily suspending shipments from Great Britain to consumer recipients in the EU, where special sanitary and phytosanitary control formalities are required.
“This does not affect goods being shipped to businesses or Veterinary and Phytosanitary shipments that do not require control formalities (such as authorisations or licenses). We hope that the challenges associated with these types of shipments are resolved soon and we can resume carrying them on behalf of our customers as quickly as possible.”
Source: lloyd´s
