Freight Companies Conscious of Brexit Issues

freight companies brexit cargocare

Haulage Companies across the UK and Ireland continue to have serious concerns about Brexit. There are a number of issues that may cause the industry and its customers problems. Long delays at ports, increased red tape and additional costs are just some of the possibilities on the horizon.

The main concern for freight companies is a possible breakdown in talks on a trade agreement between the UK and EU member states and the uncertainty that this would cause for the industry.

At Cargocare we pride ourselves on providing all our clients with smooth and cost effective solutions and we are focusing on ways to maintain this high standard of service post Brexit.

Keep Britain Trading

freight companies keep britain

The Freight Transport Association’s (FTA) recent Keep Britain Trading conference provided expert analysis from several key industry figures who debated the impact of Brexit. The conference also focused on possible future trade deals and how the FTA could help shape government policy during the negotiations.

The speakers agreed that it is critically important for the industry that new trading deals are struck through a frictionless processes. The best possible outcome would enable haulage companies to move freight between the UK, Ireland and the rest of the EU with as much freedom as possible.

Richard Ballantyne CEO of the British Ports Association (BPA) spoke at the conference and highlighted the fact that ports are bottlenecks in their nature so making sure no additional documentation or checks are required is critical.

An example of where this is especially important is for companies providing express freight services that pass through ports on a daily basis.

Time to Adapt

It is not just transport companies in Ireland and the UK that will need time to adapt to any new systems put in place but also the custom authorities. Construction and fit outs of new buildings and facilities for customs services may be required on both sides of the border and this will take time.

Nobody wants to see a return to the way things were in pre 1993 and there is scope to improve the systems currently in place. The FTA is keen to work with the authorities to help create a system that works well for everybody – transport companies and customers alike.

VAT Rates

One area that could cause an issue at the border is VAT rates. If these aren’t harmonised, processing paperwork could become a problem and different VAT rates are likely to slow things down. One suggestion is to have a deferred payments system where VAT is settled at a later date.

An example of where this might work well would be for low value shipments such as personal shipping. Obviously, then it would be necessary to track what goods are being shipped in road fright vehicles so that personal shipping could be differentiated from other commercial shipping. Currently this information isn’t available and this would need to be addressed.

The Cliff Edge

The UK is at the beginning of a bumpy road as it enters two years of negotiations with the EU. David Jones the Minister of State at the Department for Exiting the EU says there will be an implementation period allowing time to adapt to the new system but could not guarantee an extended period of time after the 2 years’ negotiations for transition.

Completing the negotiations within the 2 year timeframe is going to be a difficult task and having extra breathing space may be necessary to avoid moving to World Trade Organisation rules that include tariffs on goods.

Haulage companies will be looking for stability post Brexit and whilst the implementation may help soften the cliff edge – companies will need to be prepared for disruption and we’ll all need to become more agile to cope with the changes to come.

Five Point Plan

The FTA has created a Five Point Plan that it feels will help keep Britain trading.

  1. Customs officials will need to upgrade their systems to cope with an additional 300 million declarations by 2019.
  2. Haulage companies and shippers that don’t have any experience of EU customs declarations for the past 24 years will need time to adapt.
  3. EU member states must put in place reciprocal arrangements to prevent delays at borders.
  4. State-of- the art digital customs declarations will be needed to prevent physical checks at borders that slow down transportation.
  5. There must be a phase- in period and no cliff edge.

The five point plan aligns well with 10 post Brexit “must haves” for haulage companies discussed in our recent blog post.

Without doubt, the industry is in for change and delivery companies must be ready to adapt and be flexible. As time goes on and negotiations get underway, freight companies will get a clearer picture of what is coming down the line and must use the remaining time to put new systems in place.

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