Exports collapse – three out of four trucks leave the UK without a load
| Reading time: 4 minutes
After the traffic jams at the turn of the year, the movement of goods between the EU and Great Britain normalized – but only in one direction. British exports have plummeted. Prime Minister Boris Johnson dismisses these as “teething troubles”.
BIn January, the first month since the end of the Brexit transition period, ritical exports to the EU fell by 68 percent compared to the previous year. This is confirmed by estimates by the Road Haulage Association (RHA) after surveys of internationally active freight forwarders. The numbers would largely agree with his own information, confirmed Richard Ballantyne, managing director of the British Ports Association, the “Observer” the development.
Up to three quarters of the trucks that deliver to Great Britain would also drive back without a load. On the one hand, this is due to operational disruptions on the British side, but also to the fact that numerous British companies have stopped exporting to the EU due to many uncertainties.
Since the beginning of January, the rules of the EU customs union and the internal market no longer apply to trade with Great Britain. Shortly before the end of the year, both sides agreed a free trade agreement that largely avoids customs duties. Nevertheless, a large number of additional documents and border controls have since become necessary, from extensive forms to veterinary checks.
The industry information has not been officially confirmed. The government merely pointed out that problems and waiting times at the border are minimal and that traffic flows well through the port of Dover. Prime Minister Boris Johnson and his ministers have in recent weeks more often dismissed references from industry associations and companies to numerous trade obstacles since Brexit as “teething troubles” that would take care of themselves over time and become more routine.
The practitioners see it very differently. In a letter to Michael Gove, the Minister for the Cabinet Office who is also responsible for Brexit implementation, RHA boss Richard Burnett warned last week that urgent measures should be taken. “We have tirelessly pointed out the severe consequences of the changes, but it is very clear that the government is doing nothing to address them,” several British media quoted from the letter.
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The number of customs agents must be increased particularly urgently. Around 10,000 are currently available to help companies with the forms and documents that have also become necessary as a result of Brexit. Months ago the government itself estimated that 50,000 would be needed.
Criticism of the border controls in Northern Ireland
The RHA also reiterated its demands to temporarily relax the checks on the inner-UK border into Northern Ireland to ease pressure on transporters and ensure supplies to the region. In order to prevent a land border on the Irish island, the rules of the internal market continue to apply in Northern Ireland. This leads to checks in the ports.
Current data from the statistical office for January are not yet available. Dmitry Grozoubinsky, founder of ExplainTrade, a consultancy on trade issues, pointed out that the weak export data would also reflect inventory levels from December and the corona pandemic. Freight figures cannot be transferred one-to-one to trade development either. Still, the situation looks pretty difficult.
Customs controls for food from April
Observers warn that the situation is likely to worsen significantly in the coming weeks. So far, customs controls have only been carried out on the EU side. However, controls on imports into Great Britain are also gradually being tightened.
For the first product groups, especially food, this tightening will apply from April, and more will be added in July. Many companies are still facing some of the biggest problems, warned the consulting firm KPMG.
Other indicators also point to delivery difficulties for UK companies. The IHS Markit Purchasing Managers’ Index shows extreme delays in deliveries for January, which are by far the highest since data collection began, with the exception of April 2020, the start of the first lockdown.
“While manufacturing is providing much-needed support for economic growth in many states, while services are being hit hard by Covid-19, manufacturing in Britain is near a standstill,” said Rob Dobson of IHS Markit. “A mixture of strict Covid-19 restrictions and Brexit has led to almost record high disruptions in supply chains, lower exports and rising costs.”