Post-Brexit red tape hitting UK-EU trade

Alongside difficulties in trade between Great Britain and Northern Ireland in the first days of 2021, especially for food products, the Scottish fishing industry has been grappling with confusion and uncertainty surrounding the new post-Brexit UK-EU trading arrangements since 1 January. Some firms have seen major disruptions, with deliveries of seafood to the European Union from various smaller companies halted until 18 January, due to issues related to health checks, IT systems and customs documents which led to a huge backlog in shipments, The Guardian reported.

Truck-loads of live seafood and some fish destined for stores and restaurants in France, Spain and other countries have been rejected because they are taking too long to arrive.

Faced with the backlog, DFDS, the UK seafood industry’s biggest logistics provider, suspended its “groupage export service” – which allows several exporters to group products together in a single consignment – last Friday, a week after the UK’s departure from the EU, the newspaper revealed.

The Danish ro-ro shipping and logistics operator said it wanted to fix IT issues and train more staff to help its customers to get the customs documentation right. It is understood that single-load, single-commodity consignments are still being delivered.

DFDS is expecting to resume deliveries next Monday, but the service would take considerably longer than before Brexit, and it highlighted the importance of 100% correct paperwork.

UK high street retail brand Marks & Spencer said last week that the new trading framework was responsible for near-empty fresh food aisles at some of its stores in Ireland.

DB Schenker problems

Meanwhile, DB Schenker has identified “significant problems” relating to the new customs formalities that now apply to shipments between the EU and the UK as a result of Brexit.

It has led to the German logistics services provider placing a temporary hold on the acceptance of orders for land transport consignments to the UK.

DB Schenker said that only around 10% of the customs documents submitted for consignments that the company has been commissioned to ship have been complete and free of errors. Most of the documents are incomplete and/or contain errors.

To effectively manage the increased workload that has resulted from this situation, DB Schenker is mobilizing personnel for the Brexit Task Force that the company established more than a year ago.

“DB Schenker expects shipping volumes to increase further in January. Logistics services providers can only process consignments quickly if the share of correct and complete customs documents also increases significantly. Both shipper and consignees need to ensure that compliant documents are provided,” it said in a statement.

Earlier this week, cross-border e-commerce trade expert Hurricane Commerce warned that the difficulties encountered by businesses in the first few days since the UK left the EU, due largely to a lack of complete and valid customs data, are the “tip of the iceberg” and that “severe challenges” lie ahead in the immediate term.

On Tuesday, parcel carrier DPD was forced to extend the suspension of its road service from the UK to Ireland and continental Europe until at least the end of this week due to unresolved customs clearance issues with post-Brexit parcels.

Customs clearance capacity

As for the issue of sufficient customs clearance capacity being available to firms in the new trading regime, Barney Weston, managing director of Oceanic Resources International – which sources staff for firms working in freight forwarding, shipping, logistics and the supply chain – warned last autumn in interview with Lloyd's Loading List that a serious shortage was ‘unavoidable’ come 1 January 2021.

Commenting on the current situation on the ground, he said: “I think most (firms) managed to get the bulk of their teams in place before the end of the year, but training and ‘filling the gaps’ continues. In most cases a Customs & Compliance Manager/ Brexit Head is in place (in firms) giving the strategic lead on how to handle the UK's new trading relationship.”

He continued: “I know that in many cases training and up-skilling is on-going, and there is still high-demand for people to fill customs clerk positions, but it's hard to accurately quantify this in numbers. Certainly, anyone who has ever sniffed a customs clearance in their career history is still worth their weight in gold!

“I think the whole industry will have a clearer picture on the situation by the end of the month; so much was unknown heading into Brexit.  I think that shortly people will know if they can handle demand with the current staff levels of if more will be needed.

He added: “One positive; I spoke with a top 5 UK supermarket earlier this week who we have been assisting in building their customs teams, and so far, everything is working (to plan).”

The British International Freight Association (BIFA) said its freight forwarder members broadly appeared to be managing the challenges. A spokesperson said BIFA members “are learning the new systems as they go – hard lessons learnt but they are getting to grips with the situation in exceptionally difficult circumstances. BIFA has always said that the preparing and lodging of customs declarations was the relatively easy part of the new procedures, and that the bigger issues would be with non-tariff matters such as safety and security entries and SPS controls. That has already been seen.”

BIFA director general Robert Keen commented: “We receive calls asking technical questions on procedures but so far as we can gauge the members are very busy but coping.”

BIFA said the Road Haulage Association may have a better view in terms of the challenges facing truck, with BIFA’s feedback so far mainly related to paperwork or regulatory issues.

Another source close to BIFA said anecdotal evidence “suggests that cross border trade last week was very quiet; probably because of pre 1 January stockpiling and companies waiting to see how things pan out. The people I have spoken to expect increased volumes this week, but nowhere near normal. So, we probably won't get to see the true picture for some time. And who knows what the new normal might be?”

For More Information:

Read more here