What It Means: Freight Leaders Plan For No Deal On Brexit

Expectations within the freight industry are that Chaos in the UK parliament will lead to a no-deal exit from the eucausing more chaos at the borders. 

Freight transportation experts are planning for a no-deal Brexit following this week's events in the UK parliament, which saw Prime Minister Theresa May postpone a meaningful vote on her negotiated Brexit deal with the EU, leading to a challenge on her leadership.

The chaos in UK politics is expected to be matched by confusion on the UK's borders, said the Freight Transport Association's (FTA) head of European policy and Brexit Pauline Bastidon. The only responsible course of action for freight transport is to plan for a no deal Brexit, Bastidon said.

"Since Theresa May cancelled the vote on the deal with the EU, we consider that a no-deal Brexit is most likely," She said. "There is little time to develop changes to the deal or to put anything else in place. There is nothing that points to a different outcome [to a no deal Brexit]."

May cancelled the Brexit vote in Parliament because of the high level of opposition to the EU withdrawal deal, leaving her unable to win any such vote. The primary point of opposition to the May deal is the Irish ‘backstop' which would keep Northern Ireland, currently under UK jurisdiction, subject to EU laws and regulations after the rest of the UK had left the EU in order to prevent a hard border between the Republic of Ireland and Northern Ireland.

The backstop would only come into force if a trade deal could not be agreed upon following the UK's withdrawal from the EU. However, the EU insisted on a clause within the backstop ruling that both parties, the UK and EU, would have to agree to end the backstop, leading to fears among Brexiters that the UK could be held indefinitely within the backstop, making the country subject to EU regulations and never being able to leave.

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Irish border issues are not to be underestimated. Following the cessation of hostilities between the Catholic and Protestant communities in the early 1990's, the Good Friday agreement — which was the basis for the peace accord — specified that there would no longer be a hard border between the north and south of Ireland.

Theresa May is, however, reliant on the Democratic Unionist Party (DUP), a Northern Ireland Protestant party, to maintain power as the Conservatives failed to win a majority of the seats in the UK's 2017 elections. The DUP for its part will only support May's Brexit deal if Northern Ireland is treated the same as the rest of the UK. With the backstop effectively drawing a line in the Irish Sea allowing Northern Ireland to be treated as if it remained in the single market or a customs union with the EU while the rest of the UK had left the EU's jurisdiction, this was seen as unacceptable to the DUP.

According to Bastidon the Irish question has the least clarity following this week's events, There is no clear understanding of what will happen, she explained, and the EU could impose a hard border between the North and South. But if the Irish Government refused to implement a border, "Would the EU then impose a border between Southern Ireland and the EU?" She asked.

Bastidon added that it is too late to develop ro-ro connections between the Republic of Ireland and the EU, it takes up to four years to establish a new ro-ro service and therefore Southern Ireland will remain dependant on the landbridge for some time to come. The EU is considering developing Green Lines travelling through the UK, offering priority to cargo from the south.

In addition, the European Commission (EC) has refused individual governments permission to make bilateral deals for road haulage. This means there are only two other options: one is to use the European Conference of Ministers of Transport (ECMT) permits which would allow trucks to pass through customs unimpeded. The other option is to implement border controls which could cause major freight delays.

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The ECMT permits are applied for by governments in advance, and there are a limited number that can be awarded. According to Bastidon most permits for 2019 have already been allocated and for the UK freight heading to Europe there would be permits for only 4.55% of trucks transporting it. For European hauliers the problem can be even more acute. In Poland, for example, trucks will use ECMT permits for freight travelling east as well as to the UK, splitting its limited allocation.

The UK Government may also be able to make some checks on the web to help speed the passage of trucks, but Bastidon is not convinced that any of this will allow the kind of frictionless trade that the freight industry requires.

"I went to look at the Norway/Swedish border to see how the systems there worked and the authorities there reported that around 25% of trucks did not have the correct paperwork and that delayed the movement of trucks across the border," she said.

Truck transits over the Swedish/Norwegian border totaled 229,286 in 2016, according to Politico, and the FTA says that such a system would cause gridlock in the southeast of the UK which has an annual truck throughput in the region, ferries and Channel Tunnel traffic combined of close to 4.5 million vehicles.

"If checks were carried out in the UK on truck traffic, the queue of trucks waiting to board the ships or trains would be more than 17 miles long," warned Bastidon.

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Even though the UK government says it will not impose checks from day one when the UK leaves the EU, there are certain products that could be tested. The FTA believe that food products would be subject to sanitary and phytosanitary checks.

The UK could apply to be on the EU's ‘permitted list' in order to resolve some of the issues around food and agricultural products. The UK would need to apply to be a ‘sub-country' for food products, "otherwise agricultural and food exports could be banned," said Bastidon, but the process has not started yet.

Additionally, many meat, dairy and other products could be subjected to identity checks, with border guards checking that the reference numbers on the shipments correspond to health certificates associated with the food.

"Some 50% of food shipments could undergo document and identity checks, for which there is a charge for any testing and the vehicle could be delayed by up to 15 minutes at the port," explained Bastidon.

The FTA is so concerned at the potential for chaos following the failure of Parliament to approve an agreement and the lack of time with which to implement any other deal that it has set up a conference to take place in central London on 19 December.

"The main focus of the conference will be preparing for a no-deal Brexit," said Bastidon, preparation that some in the freight industry feel could have been carried out by the UK Government.

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