Brexit freight reforms will be a boost towards building an “easy to do business with” UK

Brexit freight reforms will be a boost towards building an “easy to do business with” UK

No single industry sector has the potential to be influenced by Britain’s exit from the EU more than the freight and logistics industry. Being an island and the 5th largest economy in the world means that the efficiency of our supply chain is critical to the economic performance of the UK. Oft-repeated but still true – 95 % of our imports and exports by volume go through our seaports. So how are the logistics industry and associated transport services facing up to the challenge?

There is natural uncertainty. We are not sure if a special deal will give us seamless freight movements or whether political maneuvering will create some new border barriers to be overcome. But there is a new determination, a new energy to improve efficiency, to grasp new trading opportunities and open up new trade routes to exploit the freedoms which independence will bring.

The Chartered Institute for Logistics and Transport (CILT) has been drawing together experts from all parts of the supply chain to identify the priorities facing the industry and the Government and on Dec 5th 2016, produced its first report for discussion.

In summary, there are three.

Firstly, we need to quickly reassure the thousands of European passport holders living here and working in the UK logistics industry that their citizenship and residency is secure. Many of these staff are highly skilled managers and technical experts. But we also need to rapidly increase our own skills base through apprenticeships and further vocational training.

Secondly, it is likely that there will be a greater volume of customs and tariff adjustments to be cleared using existing and new computer systems coming under the control of HMRC. The industry works well with HMRC, but the challenges everyone will face with adjusting to a new system in 2019 must be recognised now. We need to be sure that a wide range of users are fully trained to understand the requirements and use the software. And we need transparent, independent scrutiny of the new HMRC system’s reliability to ensure it is fit for purpose. It is no good signing new international trade deals if we have systems that break down or which are difficult to use.

And finally, there is the issue that, at the moment, we have over 30 Government agencies covering a diverse range of border checks and requirements, ranging from animal health and welfare to lorry weighing, and finally, security and safety. The freight and logistics industry wants to work with Government to streamline and rationalise these interfaces and move towards creating multi-agency platforms. This will further improve efficiency and reduce the risk of border delay.

An international accreditation system called Authorised Economic Operator (AEO) already exists and many businesses in the supply chain are certified users. The advantages are that the supply chain has security, both of customs and tariff payments away from the physical port of entry or exit, and in addition, provides security guarantees for the product being transported. This simplifies the task of the Border Force who only need random checks to be carried out for those certified.

The UK has a parallel certification system for EU imports and exports called the “Trusted Trader” scheme. It is time that this was moved seamlessly into AEO compliance so that we had just one system. Then the task is to encourage as many non-members as possible to train up staff to secure AEO certification.

It must be a primary objective of UK negotiators to ensure that they do not accept proposals from EU negotiators which introduce deliberate barriers to entry for the purpose of blocking or slowing down trading movements.

But whether we have a Canadian-type deal, whether we are in and out of the Customs Union, we need the earliest start to systems planning and rationalisation of border systems. The speed with which we start planning, the better the chance of our businesses and manufacturers taking advantage of streamlined border clearance and building the flexible, “easy to do business with” UK that the Government aspires to.

(Photocredit: Flickr)