UK ports expect smooth Brexit, as volumes decline after stockpiling spike

Date: Wednesday, January 15, 2020
Source: Lloyd's List

No major headaches are expected at British ports when Brexit happens on January 31, but industry leaders warn much still needs to be sorted out before the end of the year. Meanwhile, the trend line on the port throughput graph is heading sharply south, and Dover has announced redundancies

‘There has been a Brexit effect. If you go and speak to the ro-ro specialists at Immingham and Dover, they’ve all seen it,’ says British Ports Association chief executive

BREXIT is likely to roll out smoothly on the UK waterfront on the last day of this month, although throughput volumes are on a continuing downward trajectory following a stockpiling spike in the last quarter of 2018, according to ports industry sources.

While Britain is formally departing from the European Union on January 31, existing arrangements on customs, excise and value added tax rules and regulations remain in place while the details are hammered out. That should make life easier for port operators in the next few weeks.

The UK government is aiming to complete relevant negotiations by the end of the year. But from a port user perspective, no noticeable changes are anticipated in the short term.

The Withdrawal Agreement Bill is due to undergo its second reading in the House of Lords today. Assuming ratification, as is widely expected, the UK will enter into a transitional period on February 1, with the UK staying within most EU institutions such as the single market and the customs union until 31 December.

After that, UK and EU customs arrangements will presumably diverge, meaning that new border procedures will need to be introduced from 2021.

The status at that time of British trade with Ireland — both the republic and those parts that remain within the UK — is one of the major points that still needs to be agreed.

Tim Morris, chief executive of the UK Major Ports Group, commented: “Although we’ve been assured that with the passing of the government’s Brexit Bill that it’s business as usual around the 31 January departure date, what the border arrangements will be for January 1, 2021 are a whole different kettle of fish.

“We’re all going to need to work very hard and at pace — government, industry, agencies, intermediaries — to put in place a whole new framework in only 11 months. Some of this, such as moving freight to and from Great Britain and Northern Ireland, is wholly new, and has not even been contemplated in necessary detail yet.”

Meanwhile, official statistics from the Department for Transport show that overall throughput at UK ports rose to 122m tonnes in the final quarter of 2018, and then steadily fell to 113m tonnes in the third quarter of 2019, the last trimester for which figures are available. That’s a drop of 7%.

The figures are for both imports and exports, and reflect world trade, which was sluggish last year, rather than trade specifically with the EU as such.

Nevertheless, ports professionals say it is legitimate to see them as an indication of stockpiling activity ahead of the originally scheduled Brexit deadline last March, followed by a subsequent tail-off.

Richard Ballantyne, chief executive of the British Ports Association, said: “There has been a Brexit effect. If you go and speak to the ro-ro specialists at Immingham and Dover, they’ve all seen it.

“Particularly on the Humber, there has been loads of stockpiling in the run-up to the first deadline, and then some stockpiling in the run-up to the end of October.”

The ports and logistics sectors now hope that the political turmoil that has accompanied Brexit will calm down, although investment decisions will likely await final agreement with the EU.

A spokeswoman for Dover — by far the biggest gateway for ro-ro trade between Britain and the EU — said that the port is expecting business as usual on January 31.

Dover last week announced plans for an unspecified number of redundancies among its hundreds of employees, although it is unclear whether or not Brexit played any part in the decision.

“Given the prevailing market conditions and the impact on our business, we must take steps to be able to operate as efficiently as possible whilst still delivering our services, maintaining our assets, performing our statutory duties and being in a position where we are able to grow again in the future,” it said in a statement.

“Clearly, it would be entirely inappropriate to say anything further before the process has completed and the impacts of what are only proposals at this stage are known.”

Mick Cash, general secretary of RMT, which organises both dockers and seafarers at Dover, said that the union will “continue to monitor the situation at Dover Harbour Board very closely for any impacts on our members in the port and on the short sea ferry fleet.”

 

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