The Freight Transport Association (FTA) warns today of what the threat of no deal would mean to UK trade. The FTA, which represents 17,000 members of the UK’s logistics industry, from shippers to hauliers, says that a no deal Brexit would break the Prime Minister’s promise to keep trade as frictionless as possible.
The FTA and leading haulers have written an open letter to Theresa May, shared with all MPs, at the beginning of a series of votes on what the UK’s exit from the EU will look like. In the letter they ask Parliament to consider the needs of those who keep Britain trading.
MPs will vote tonight on Theresa May’s deal to leave the EU. If that is rejected, as looks likely, they will then have opportunities to vote on a no deal exit, and on extending negotiations.
The letter, signed by representatives of DHL (UK), Hermes Europe, Summit Logistics, Tandem Transport and the Food Storage and Distribution Federations as well as the FTA, says that the logistics sector is “no closer to knowing and understanding the conditions under which it will be expected to deliver what the nation needs from the end of March 2019. “Logistics business,” it says, “are already wasting millions of pounds trying to prepare for an unclear trading environment and negotiate commercial contracts beyond the end of march 2019 that carry significant risk because of profound uncertainties over frictionless trade.”
It says that seven million Britons are employed in making, selling and moving goods “that affect everyone, everywhere.” And it adds: “To suggest that a No Deal departure in March would not place severe restrictions on the movement of goods is ignoring the facts. That outcome and the adoption of complex WTO trading rules, would very likely lead to chaos in supply chains, triggering panic buying, inflation and job losses.”
The industry still needs to know, says the FTA, more about aspects including whether road haulage permits will be required, the level of Customs tariffs, access to a skilled workforce and how red tape will be minimised for imports and exports. Slipping to a No Deal situation, and reverting to complicated WTO rules and tariffs, would impose additional costs of between 5 and 35 per cent on the UK’s supply chain, it says.
“For the past two years, the logistics industry has been warning of the potential disruption and damage of a No Deal Brexit,” says James Hookham, the FTA’s deputy chief executive, “which could include short-term gridlock at ferry ports if customs processes and checks are not implemented smoothly, shortages of perishable foods and medicines, restrictions in the labour market caused by a shortage of workers as they return to the EU and severe delays for imports and exports which would hinder the UK’s manufacturing and retail sectors. The Government believes it has developed the necessary procedures to be followed but yet there is still so much to be agreed and announced.
“Whatever the final outcome of tonight’s vote, and those later this week, the logistics industry needs sufficient time to learn, adapt to and implement the necessary operational processes to comply with the announced procedures. With just over two weeks to go until the UK’s proposed departure from the EU, it is worrying that we still have so much to clarify.”