With around eight months before Britain is due to leave the European Union, there is growing concern from shippers and port operators amid on-going political in-fighting over a hard or soft Brexit.
A hard Brexit would mean the systems that enable the swift clearance of goods into and out of the UK will not be fit for purpose if the UK reverted to World Trade Organisation tariffs. The scenario of new, onerous customs checks and tariffs threatens to cause massive traffic jams as trucks wait for clearance at cross-channel ports, especially Dover.
Potential traffic chaos can be referenced from earlier disputes involving ferry staff, where lines of trucks stretching tens of kilometres were parked on the sides of specially designated expressways in Kent, the county where Dover is located.
A soft Brexit would likely see many of the existing systems remain. Such a scenario was outlined in a British government white paper on 12 July which saw “frictionless” trade through a common rulebook with the UK and EU having many of the same regulations based upon a “facilitated customs arrangement” with tariffs collected at the border of a combined EU/UK zone.
Harbour groups, the UK Major Ports Group and the British Ports Association, welcomed the white paper. However, it caused a storm of protest within government, leading to the resignation of several pro-hard Brexit government officials.
The continuing uncertainty on how to cope is weighing on cargo owners.
Shippers are already looking at alternatives to using Dover, either shifting their Ro-Ro traffic to other ports or increasing the use of short-sea containerised or breakbulk shipping, moves that are leading to increased investment by UK port operators.
Tim Morris, chief executive of the UK Major Ports Group (UKMPG), told Forward with Toll that UKMPG members are experiencing increased interest from logistics companies investigating alternatives to current accompanied Ro-Ro routes. The nine members of UKMPG own and operate more than 40 British ports, accounting for over 70% of the total tonnage handled in UK ports.
One Dutch shipper A2B-online will increase volumes through Thamesport. Bart van‘t Hof, A2B-online group sales director said, “If it is decided to go for a hard Brexit, more volume is expected to be routed from Moerdijk to London Thamesport. This is because of customs procedures that may apply, which will have a considerably [negative] effect on the supply chain for goods arriving in the UK.”
Forth Ports is spending GBP150 million on its Tilbury 2 development to increase port capacity for European services.
But the British Ports Association questioned how viable a shift from Dover or to other transportation options would be.
“A move to another Ro-Ro port doesn’t avoid the potential checks for hauliers which would need to be done elsewhere,” said Richard Ballantyne, chief executive of the British Ports Association.
“Container terminals are operated in a different way under different time pressures, so a modal move looks pretty unlikely for most traffic currently using Ro-Ro ports. There is port container capacity available,” he told Forward with Toll.
Pointing to the importance of Dover, Morris said, “Dover is by far the dominant port in this segment, with a 97% concentration of self-propelled non-UK Ro-Ro traffic.”
Outlining Dover’s convenience, Peel Ports said in a research document that a truck would take eight hours to cover the 650 km from Dusseldorf via Calais and Dover to Milton Keynes in central England.
By comparison, it would take up to 12-13 hours from Dusseldorf to Milton Keynes via alternative ports at Zeebrugge and Sheerness in Kent despite a shorter driving distance.
Taking advantage of the shorter distance, Stephen Carr, Peel Ports commercial director, explained shippers could hold contingency stocks on trailers at the port of entry similar to freight shipments across the Irish Sea, where more than 50% of the cargo is only the trailers.
“The modelling we’ve done shows that routing via ports such as London Medway is just as efficient as the existing options through the Dover Straits, although the sea leg is longer, road miles are reduced,” he said.
Carr also pointed out that cargo bound for northern England, Wales or Scotland could be routed to more convenient ports further north such as Liverpool, Manchester or Middlesbrough.
Showing the practicality of using alternative ports, several shipping lines, including Maersk and MSC, diverted services and cargo to Liverpool in July following port delays and disruption at Felixstowe in the south caused by problems implementing a new terminal system.
Carr said, “The supply chain needs certainty, predictability and resilience but we all know about the acute delays and problems that already exist at Dover when there’s the slightest disruption to normal operations. Businesses simply can’t take a huge gamble on what that post-Brexit world might look like, especially those with ‘just-in-time’ processes or that are shipping perishable goods.”