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New urgency to post-Brexit planning as NAO warns of significant UK disruption following end of transition period

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Warnings today of significant disruption when the transition period for the UK’s departure from the EU ends on January 1 have been met with calls for traders to put back-up plans in place now. 

The National Audit Office reports today that although government departments have made progress in making the changes necessary for systems, infrastructure and resources to manage the border at the end of the post-EU Exit transition period, widespread UK disruption from January 1 20201 is still likely. 

The NAO report says that Covid-19 has delayed the government’s preparations and risks remain, especially in relation to trader readiness and the implementation of the Northern Ireland Protocol. It says there is now little time for ports and other third parties to integrate systems and processes with new government systems and contingency plans may need to be involved. It says in its press release: “Even if government makes further progress with its preparations there is still likely to be significant disruption at the border from 1 January 2021 as traders will be unprepared for new EU border controls which will require additional administration and checks. The government’s latest reasonable worst-case planning assumptions, from September 2020, are that 40% to 70% per cent of hauliers will not be ready for these new controls and up to 7,000 lorries may need to queue at the approach to the short Channel crossings, such as Dover to Calais.”

The government’s Check an HGV is ready to cross the border web service is still not launched, says the NAO, the £200m Trader Support Service for those sending goods to and from Northern Ireland is not yet launched,while Covid-19 is making it harder to enact civil contingency plans around the supply of critical goods and medicines in the event of supply chain disruption. HMRC estimates that 270m customs declarations may need to be processed each year from 2021 – up from 55m now. In 2019, 219.5m tonnes of freight crossed the border between the UK and the EU. 

Gareth Davies, head of the NAO, says: “The 1 January deadline is unlike any previous EU Exit deadline – significant changes at the border will take place and government must be ready. Disruption is likely and government will need to respond quickly to minimise the impact, a situation made all the more challenging by the Covid-19 pandemic.”

Today’s report, The UK Border preparedness for the end of the transition period, is the NAO’s fourth report on the subject.

Stefan Tärneberg, director of solution consulting at BluJay Solutions, says that whatever traders’ shipping plans after Brexit, it will pay to get ready now for “when the system is inevitably placed under immediate strain come January 1”. That means, he says, employing experts to help understand the new regulations. 

“Rerouting via different ports could be a saving grace for shippers in some industries,” he says. “While the most popular ports will be over capacity from January 1 companies are beginning to explore the potential of smaller ports off the beaten track to skip the queues. Unlike those on the Channel, many of these also come equipped with specialists well-versed in overseas declarations, who can get goods across the line far quicker.  

“But rerouting is not a viable solution for everyone. Fresh flowers from the Netherlands or fruit from the Mediterranean won’t survive the long journey. It also costs more in fuel miles: not ideal for those with heavy shipments. But for those determined to keep up standards, sharing containers or collaborating with suppliers on route-finding will make post-Brexit shipping far more resilient and flexible.” 

Mark Elward, chief commercial officer at UK fulfilment technology provider Huboo, said: “Unfortunately it is highly unlikely that all traders will be ready. We’re speaking to hundreds of small and medium sized ecommerce businesses across the UK every day and with only seven weeks to year end, we are only just able to have conversations on the new guidelines with freight forwarders and carriers. It would seem that the impact and challenges of Covid has somewhat taken the focus of Brexit from top tier of the government down to a small trader. While the proposed phased approach is helpful I believe that the six month transition period should be extended to allow further processes to be implemented fully.”

• At the end of September, InternetRetailing produced a three-part series outlining the areas that retailers should consider when planning for the end of the transition period put in place when the UK left the EU in January. 

Here are the links to part 1, covering VAT and getting EORI numbers, part 2 covering customs, warehousing and logistics, and part 3, covering rules of origin and data. 

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