Brexit, as the saying goes, means Brexit, although ultimately the term’s meaning depends on who you ask. With ‘Article 50′ due to be invoked before the end of March, signalling the UK’s notification to leave the EU within 24 months, profound change is coming for transport operators connecting continental Europe and the British Isles.
Specific Brexit bargaining positions will have an impact on the Irish Sea shortsea trade, but also at the only land border between the EU and the UK – that dividing Northern Ireland and the Republic. Land border arrangements will have significant consequences for that part of the island of Ireland remaining in the EU, as well as for that part leaving.
Multimodal operator Samskip brings an interesting business perspective to the picture. The company is active in all EU markets, operates ships connecting Continental Europe to the mainland UK (Tilbury, Hull and Grangemouth) and Ireland (Belfast, Dublin, Waterford and Cork), but does not offer services between the two islands.
Samskip Ireland General Manager, Richard Archer says that shortsea traffic between Ireland and Continental Europe has been “pretty much steady as she goes this year”, with increases in imported raw materials and a slight uplift in consumer spending, but a slight dip in dairy and baby formula exports. However, Archer sees opportunities as well as potential obstacles for the transport industry as the UK’s EU exit draws nearer.
If the devaluation of Sterling continues, it is likely to have a negative effect on the Irish economy in general, given that exports to the UK represent around £600 million a year, he says. Conversely, Archer suggests positives may emerge for Samskip, if part of the deal between London and Brussels revives customs clearance between the UK and the Republic of Ireland. The ‘hard border’ is an emotive issue in the Irish context, but Archer’s point is that it is also a many-sided one.
“It may not be so advantageous for shippers to use the UK land-bridge if it’s necessary to clear customs at, say Dover and Liverpool,” Archer suggests. He points out that branded products previously moving in volume by sea between continental Europe and the Republic of Ireland were diverted via UK distribution as recently as 10-15 years ago; what any reversal of such a trend would look like is uncertain.
“Now, no one seems to be able to find out exactly how much of the traffic moving from Ireland to the UK goes on to other EU markets,” says Archer. ”But there are other things that are unknown, and some of them are of a very practical nature. Will the UK have systems for electronic customs clearance, or will it be manual in the first instance? Will they have capacity at UK ports to hold trucks so that clearance is efficient?”
At a meeting of the UK’s All-Party Parliamentary Maritime and Ports Group at the House of Commons last week, Tim Waggott, Chief Executive of the Port of Dover said that Britain’s busiest ro-ro port faced a possible post-Brexit congestion headache unless the UK secured a good deal on customs clearance. When Eurotunnel freight is included, the Strait of Dover accounts for 30% of UK trade by value. Dover itself has room for 937 trucks on its Eastern Docks and 220 elsewhere. With 2.6m freight vehicles and 12m passengers handled a year, the “frictionless border” might require investment in IT and ‘passports for goods’, Mr Waggott told MPs.
Border in the post
UK Brexit minister David Davis suggested to the committee that a new customs regime could be based on the existing “trusted trader” system for collecting excise duties, operating “in a subtle and not highly visible way”.
He added that technology could offer an answer when it came to the land border. “It is not going to be easy, it is going to cost us money, a lot of work on technology, to put border controls in but without having border posts – but that is what we intend to do.”
The Brexit Minister offered no timetable regarding the plans. Mr Archer commented: “As a pan-European transport operator whose business is all about finding solutions for customers wishing to move their traffic from A to B, Samskip will be ready to accommodate the post-Brexit world, however it shapes up.”
Name: Richard Archer
Job Title: General Manager, Samskip Ireland