After more than three years of negotiation, the UK has officially left the EU and entered into the transition period; now, both sides have until 31 December 2020 to determine the shape of their future trading relationship. As the only business group representing all of the logistics sector, FTA is calling on government to answer critical questions on the future trading arrangement as soon as possible as logistics businesses need clarity and adequate time to prepare for any new trade deal, writes Seamus Leheny, Policy Manager for Northern Ireland, FTA
Without time for effective planning and testing, delays at the border and other interruptions to the supply chain are very likely to have a critical impact on the availability of time-sensitive goods, such as fresh food and medicines, and a knock-on effect on the productivity and profitability of UK plc.
The direction of UK-EU Trade
At an event hosted by the Border Delivery Group on 11 February 2020, Michael Gove, the Chancellor of the Duchy of Lancaster, shared some of the UK government’s ambitions for post-Brexit trade with the EU; his speech provided logistics operators with some much-needed direction on the expectations for trade moving forwards, even if not all the developments were welcomed and many critical questions remain.
Firstly, he announced that there will be no extension to the transition period, a decision which gives businesses a finite deadline to which to work. And the news of the provision of government funding to help industry prepare for operations outside the EU is certainly welcome by our industry; it is certainly clear, in FTA’s view, that Mr Gove understands the work required to make a success of any new trade agreement and is confident that agreement can be reached with the UK’s trading partners in Europe.
However, as representatives of the logistics industry, we are naturally disappointed that the promise of frictionless trade has been replaced with a pledge to make trade as seamless as possible, but not until 2025. Until then, a costly “make do and mend” approach is to be employed to government which will increase the burden on logistics businesses already required to invest in order to adopt new trading processes.
Industry asks
FTA’s members have a series of key asks of government to ensure the UK can achieve the ‘seamless’ EU trading relationship they have promised, once the Brexit transition period ends on 31 December 2020.
To start, FTA is calling on government to include representatives from the logistics sector in every step of the process as the transition period draws to a close; this participation will be vital to ensure any new trade and transport arrangements are fully considered, so that industry can confirm that they will work in practice. The UK’s supply chain is one of the most interconnected in the world, with vehicles and shipments arriving to support UK manufacturing in delivery “windows” of only minutes. FTA is also asking for government to mitigate the risk of disruptions at UK-EU borders by prioritising the smooth flow of goods and seeking to minimise the red tape and costs logistics businesses may face. We also want government to commit to maintaining road, air and rail freight connectivity, in addition to funding training on any new procedures.
In addition, FTA needs government to recognise the logistics sector’s reliance on non-UK workers and to ensure they are excluded from any restrictive post-Brexit immigration policy; these individuals currently comprise 13% of the nation’s entire logistics workforce. And with 64% of logistics businesses already struggling to fill vacancies, taking away the pool of non-UK workers on which the sector relies would have devastating impacts for UK plc and the wider economy.
We also need to examine how trade flows between Northern Ireland (NI) and Great Britain (GB) will be managed at the end of the transition period. Within the Withdrawal Agreement, there is provision for Republic of Ireland / NI protocol which avoids the need for border checks on the island of Ireland. As a result, NI remains part of the Single Market for goods, while still being within the UK customs territory; this raises the likelihood of formalities for goods entering NI from GB. With more than 425,000 goods vehicles entering NI annually from GB via roll-on/roll-off ferries, this could mean new administrative responsibilities and checks on this trade flow.
The government must provide more clarity on the nature of the UK’s future trading relationship with the EU as soon as possible; with just 10 months until the Brexit transition period ceases, logistics businesses do not have long to prepare and we need answers to critical questions.
FTA has already been in contact with the new administration and shared its list of requests; we will continue approach key officials in the coming months to ensure the concerns of the logistics sector are heard.
Efficient logistics is vital to keep the UK trading, directly having an impact on more than seven million people employed in the making, selling and moving of goods. With Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. A champion and challenger, FTA speaks to government with one voice on behalf of the whole sector, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers.
For more information please visit www.fta.co.uk
