finance

How Britain’s Channel ports avoided Brexit meltdown


When Cabinet Office minister Michael Gove wrote to industry last September setting out the risks posed by Brexit on January 1, he conjured a vision of traffic hell, with up to 7,000 lorries clogging the roads of Kent and drivers stranded for up to two days waiting to cross the English Channel.

The “reasonable worst-case scenario” of the UK’s overnight departure from the EU single market predicted up to an 80 per cent drop in flows of freight in the first month and half of all trucks being turned away at the ports for having incorrect paperwork.

The catastrophic prognosis heightened concerns among trucking unions and local councillors about the shortage of portable lavatories, with warnings that Kent would be turned from the “garden of England” into the “toilet of England”.

But that is not what happened — as January unfolded, the television news bulletins were denied helicopter shots of the M20 at a standstill. The lorries kept moving and the supermarket and pharmacy shelves remained well-stocked.

Trade groups, logistics experts, port authorities and government officials who worked intensively over the period say that a combination of factors kept the feared queues from forming — even if some businesses experienced massive disruption behind the scenes.

Stockpiling

For Tim Reardon, who headed up Brexit contingency planning for the Port of Dover, the first key to avoiding January disruption was the level of stockpiling that industry did prior to new border controls coming into force on January 1.

Pre-Brexit stockpiling helped avert lengthy lorry queues © AFP via Getty Images

November 2020 saw more than 230,000 trucks flowing through Dover, the highest tally of the year as businesses built themselves a buffer ahead of the expected Brexit induced disruption in January.

The stockpiling meant that dramatically fewer trucks attempted to cross the channel in January, with only 130,000 lorries crossing compared with a seasonal average for January of about 200,000. 

“A lot of smaller suppliers just backed off,” recalled Tim O’Malley, the managing director of Nationwide Produce, a major UK importer, exporter and distributor of fresh goods. “They were scared of the paperwork and the Covid-19 tests. We had made plans to ship via Rotterdam and the North Sea, but the Channel port queues were nothing like what we feared.”

At the same time, according to UK officials and logistics companies, those trucks that did reach the border showed much higher-than-expected levels of compliance with paperwork, with only 8 per cent of trucks being turned away in early January, falling to 2 per cent by mid February, according to government figures.

The government said in a statement that it attributed the success to the nearly £800m it had invested in border jobs, technology and infrastructure at the border, along with “excellent efforts” made by traders and hauliers to prepare for the new rules.

Officials also credited the effectiveness of the Kent Access Permit — or “Kermit” as some dubbed it — an online registration portal that threatened £300 fines for drivers who failed to pre-declare their paperwork was in order before driving into Kent.

French customs officials have been credited with taking a pragmatic approach to checks to keep traffic at Calais flowing © Pascal Rossignol/Reuters

French pragmatism

The other reason for minimal delays was the efficiency and pragmatism of French customs, according to both government and UK port officials, who said the French had not stopped as many trucks as some of the planning scenarios predicted.

“Credit has to go to the French customs for finding a way of dealing with the new stream of lorry freight,” said Reardon. “The political noise between London and Paris isn’t reflected in the way French customs officials work.”

Jean-Marc Puissesseau, president of the ports of Calais and Boulogne, said handling the traffic had been far from plain-sailing with “hundreds and hundreds” of trucks being stopped in the first weeks, but now only about 7 per cent being sent into the “orange lane” for checks. 

Throughout January, a team of UK government officials was also in daily contact with French, Dutch and Spanish counterparts who provided feedback on the most common mistakes on UK customs paperwork, which were then passed back to haulage and logistics groups to disseminate to their members.

The government also applied a “90-10 rule” to its preparations, focusing hardest on the 10,000 or so largest UK businesses who account for about 90 per cent of UK trade with the EU, according to Alex Veitch, policy chief at Logistics UK, the trade group.

“There was a monumental effort behind the scenes to get government and commercial systems ready, because everyone knew that if traders had their paperwork done correctly you’d avoid the bulk of the jams,” he added 

Smaller businesses feel the pain

However while the lack of traffic jams may have created the wider impression that all disruption was avoided, businesses and trade groups are clear that Brexit did cause severe and lasting disruption of other kinds — particularly for smaller businesses.


75%


The decline in trade volumes in the UK food and drink industry in January

The food and drink industry, where burdens of new paperwork are highest, was hardest hit, with trade volumes plummeting by 75 per cent — or £750m — in January, according to the Food and Drink Federation. Exports were still 40 per cent down year-on-year in February.

“Those ‘worst-case scenario predictions’ that flows could fall by 80 per cent weren’t far off for the food and drink industry — it’s just that the disruption took place at the factory level,” said Luke Hindlaugh from the Food and Drink Federation.

One company at the sharp end was Synergy Flavours in High Wycombe, Buckinghamshire, which was used to selling single or double pallets of products into Europe but found delivery systems grinding to a halt despite hiring customs consultants and obtaining Authorised Economic Operator status prior to Brexit.

“The queues weren’t in Dover, but they were just about everywhere else,” said Steve Morgan, the company’s chief executive who recalled that at one point 400 trucks were backed up at a depot in Dagenham, east London, and more than 1,000 in a depot in the EU.

Six months on, many problems obtaining “groupage” — where pallets of products from multiple businesses are consolidated into lorry loads — persist. The company now uses an Irish subsidiary to “hub” products into the EU and registers for VAT in Holland to try and smooth out distribution issues.

They are also experiencing delays on imports from the EU, which Morgan fears will get worse when the UK introduces full border controls in January next year. “We ship to south-east Asia on a routine basis, the crazy thing is it’s easier to ship from the UK to Indonesia than it is to Spain or Italy.”

The cost of moving freight has also soared because of Brexit-related driver shortages and a reluctance among EU drivers to risk customs delays when returning to the EU, according to John Lucy, the head of international transport at The Road Haulage Association.

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“UK export trailer prices have doubled or tripled in six months. A trailer load from the north-west to Belgium was going out at £500 last year, but now it’s up to £1,500 for the same load,” Lucy said.

Looking to the future, trade groups say that Brexit has created permanent structural changes, driving up the costs of exporting, adding delays to delivery times, which cuts down the shelf-life and competitiveness of UK perishable products. 

It is also possible, when tourist travel restarts after the Covid-19 pandemic, that traffic queues at the Channel ports will belatedly become a feature of life after Brexit, since all UK tourists will require a date stamp in their passports before crossing into the EU.

Reardon of the Port of Dover says that lorries are currently able to use four of the five passport lanes at the port, whereas before Brexit it was the other way round — with 20,000 cars using Dover on a peak weekend, compared with just a few hundred a day at present.

Holidaymakers could still face serious delays when travel is allowed to resume following the lifting of coronavirus restrictions © David Parker/Alamy

“The big challenge in the months ahead will be keeping the traffic running smoothly when the lorries no longer have the port to themselves,” he said.

Toby Howe, the senior highway manager at Kent county council and a veteran observer of tailbacks caused by ferry strikes and weather delays, said planning was already under way.

“Whether it is this summer or October half term we are planning for that delay, because French border force will need to do 100 per cent checks,” he said. “Just because it didn’t happen on January 1, the problem hasn’t gone away.”

Additional reporting by Domitille Alain



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