A costly divorce

Brexit is presenting particular demands for the logistics industry. DHL Freight is on top of these challenges and is rising to them on several levels. A date has been set for the great divorce, when the United Kingdom will leave the EU: March 30, 2019. Just as the free movement of goods between the island and the continent was greatly simplified with the introduction of the European single market on January 1, 1993, the future could be a step back in time to the period before that date. Border controls, customs documents, and increased bureaucracy could severely burden the logistics industry and add costs.

Oxera study: high additional burdens

The additional expenses are immense. According to a study by the consulting firm Oxera, more intensive border controls alone will mean extra costs of some €1.12 billion for freight forwarding companies – every year! This is an extremely conservative estimate that does not include the cost of additional staff to handle the paperwork. The estimate is this high because, each year, 21 million tons of goods are currently transported by road from Britain to the continent and 27 million tons head in the other direction. Dover alone processed 4 million truck clearances in 2015.

When motorways become parking lots

A lot of goods were shifted before the free market, of course, with the hard shoulder of the M 20 heading to Dover often turning into a legal parking for trucks waiting for clearance. This occurred especially when processing at the port was delayed and all of the available spaces were already taken. What the police once tolerated, at least some of the time, now threatens to become a permanent scenario after Brexit.

Processing always to take 45 minutes?

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Currently, it takes an average of 45 minutes to process a truck from a non-EU state as it crosses into the UK. If every single truck, EU or not, is forced to go through this processing, the harbor in Dover is going to become one huge parking lot. Logistics companies in Ireland are especially stressed over the shift in regulations because their trucks will now have to pass two checkpoints to get to mainland Europe. First into the UK, then into the EU. But there’s hope: Brexit does not have to mean an exit from the customs union

Transitional periods will be essential for trade

Andrew Meaney, a transportation specialist who led the Oxera study, argues that “there will have to be plenty of time for trade to adjust to the new rules.” He is basing this on what several ministers have said about their demands for extensive transitional periods and their wish to see Britain remain a member of the customs union. Like Meaney, industry associations such as global transport organization IRU expect that there will finally be some movement in the Brexit negotiations, although things are currently at a standstill.

Latest for DHL customers

DHL Freight is rising to these challenges and is responding on several levels. Experts are in constant contact with the customs authorities, keeping up-to-date with the various rules as they change, and will pass what they find out to our customers. Gerlach Zolldienste, a wholly owned subsidiary of DHL Freight, not only handles the customs processing of imports and exports as well as transit, but also serves as fiscal representative for non-German customers and handles the neutralization of freight documents. As a customs broker for Germany and Europe, Gerlach is also optimally prepared to address Brexit-related customs issues. Investigating customer supply chains and demonstrating routing options are also measures that DHL Freight will continue to use to optimize make freight traffic to Britain.

Author: Jürgen Eschmeier

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