UK Freight Forwarders Struggle to Trade over Brexit Red Tape

British logistics expert Jon Swallow has seen exports dive and prices rise in just one month of post-Brexit trading. Customers are so desperate, he is practically offering a counselling service.

Swallow is among thousands of freight forwarders and customs brokers based around Britain’s biggest ports. He has described the overnight introduction of a full customs border as akin to the country placing economic sanctions on itself.

After 47 years of membership, Britain has left from the European Union’s orbit on New Year’s Eve. This means exporters must now provide customs and safety declarations. They must now give health checks and rules of origin details to trade with its biggest partner.

Prime Minister Boris Johnson is the face of the Brexit campaign. He argued that a more nimble Britain would be able to trade globally. That is if it cast off the shackles of what he said was an overly bureaucratic EU. 

Those companies that trade goods between Britain and the bloc, however, are paying a price, particularly small firms. The EU applied full checks on goods entering from Britain. Over six months, the UK is phasing in its own customs rules for imports.

Previously Swallow’s firm would have handled an equal measure of imports and exports. It moves up to 10,000 truckloads across Europe a year.

In January his exports all but disappeared. Moreover, the price of bringing in goods has jumped.

RED TAPE

Swallow said many EU drivers were adding 400 pounds ($550) to the cost of driving into Britain. They were covered if they returned without any goods. Up to half of the trucks going back to the EU are empty, the industry estimates. 

A member of staff was slowly talking a customer through the steps now required. Among them are producing commercial invoices, a packing list and export accompanying documents. Also included are a goods movement reference, and more.

The manufacturing trade body, Make UK, said 60% of 189 companies it surveyed say they have suffered “significant disruption”. This is despite having prepared themselves for Brexit.

The government is working to help smaller firms adapt. It had warned that 7,000 trucks could be held in queues if traders were not ready.

The Prime Minister acknowledged the teething problems but said there would be benefits for trade in the long term.

Swallow said bigger firms had generally performed better. That was by throwing people and money at the problem. He is now concerned about how companies will fare with full import checks.