Tuesday 12 January 2021

The hole below the Brexit waterline

The first ten days or so of Brexit reality has been a story of the quiet before the storm. Like the last few months of 1939 it is a sort of phony war. The expected chaos at the borders with queues of HGVs has not materialised. The reason is clear when traffic cameras on the M20 are checked. Traffic is running at a fraction of normal levels. Things have carried on as normal and Brexiteers welcomed it as confirmation it was all scaremongering from remainers. They are soon to be disappointed.

We are beginning to see shortages of fresh foodstuffs but even this is just the visible tip of the iceberg. The shortage of experienced or even inexperienced customs agents is starting to be felt. These are not government officials but private companies and individuals whose job it is to get freight across borders by deciding the routes and the methods and preparing the complex paperwork needed. As someone once said, nothing crosses a border easily, not goods, services, people or money.

From  HMRC's initial calculation of an extra 250 million customs declarations came the figure of 50,000 additional agents  This is about 100 declarations per agent per week. So, about 24 minutes each - on average. I assume many are quick and easy, others more complicated involving calls to the exporter to clarify details.  

What is becoming clear is that we simply don't have enough agents.  I follow on Twitter a courier - a man with a van - who used to do continental deliveries. He tweeted a few days ago

He claims the customs agent he spoke to is not taking on any new clients and to try back “in a few months” to see if anything has changed.   Note months.  He was also told he would need a customs agent in the destination country as well and he would have to find one himself.

So, as Ciaran pointed out you can't hire an agent at the moment in this country and before exporting anything you also need to find another one abroad as well.   As you might expect, the agents who are available are (a) charging a high price and (b) looking at the easiest loads.  These are the bigger single product loads, they are "not interested in ad hoc small loads via vans" or presumably mixed groupage loads where one product could involve delays to the entire consignment. 

Al of this was confirmed by someone deeply involved in the freight business, Martin Lovell who tweeted:

This is the hole below the waterline of the British economy.  It is going to have an impact on just-in-time logistics, particularly of fresh and perishable goods and no doubt we shall all have to get used to a different diet in the coming weeks. Nobody is suggesting the public will be on starvation rations but we will be eating differently for a while.

Joel Hills, ITV's Business and Economics editor tweeted about the impact all this is having on the cost of moving goods which appears to have increased six-fold in a matter of a couple pf weeks:

Transport costs can make the difference between being competitive and losing orders, making entire supply chains no longer viable.  For the car makers, this might be crucial.

So, what we are beginning to see is the practical reality of Brexit. From Holyhead and the Irish sea border to the throttling back of trade across the short straits, problems are becoming apparent.  This is all being exacerbated by covid-19 but whereas people might sympathise with Johnson who found himself at the wheel when the pandemic struck, I wonder what their opinion will be when they realise Brexit problems are all down to political choices built on a foundation of lies and delusional thinking?

We may soon be finding out.

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