Exporters bear brunt of Brexit ‘fallout’

The extension of import border controls is good news for some importers but may undermine negotiations with the EU for reciprocal easements and highlights the challenges still faced by exporters.

Imports from the EU, which fell 28.8% in January, maybe buoyed by the government’s decision to postpone import controls, including food and animal product checks, while exports to the EU that fell 40.7% over the same period face continuing border disruption, without any prospect of mitigation.

Data from the Road Haulage Association (RHA) shows empty lorries leaving the UK accounted for 26% of all truck movements into the EU, with total loaded haulage exports down 47% last month, compared with last year.

Between the end of January and February, the number of trucks moving empty fell from 37% to 26%, and the year-on-year drop for total export movements fell from 68% to 47%.

Last week’s extension of inbound EU border controls is good news for a percentage of importers. Still, it does nothing to assist exporters, and postponing these controls unilaterally may weaken the UK’s negotiating leverage when seeking similar easements from the EU.

The UK mainland’s one-sided Brexit border is coming under increasing criticism, with business leaders saying it gives EU firms an advantage over UK exporters. 75% of whom have experienced Brexit-related delays over the past three months, and over 50% have seen an increase in costs, though some of these impacts will result from lorry drivers taking COVID-19 tests before crossing the Channel.

Despite the EU/UK free trade agreement (FTA), it is the non-tariff (invisible) barriers like vet checks and additional documentation requirements that are increasing exporters’ costs, and these may have to be passed on in higher prices which reduces UK exporters’ competitiveness.

Exports of food and live animals to the EU plunged 64% from December, potentially due to stricter checks and certifications implemented by the EU at the end of the transition period – the same checks that the UK has unilaterally ruled out for a further six months.

The Cold Chain Federation said the situation creates an “ongoing unfairness” between UK and EU firms, and UK exporters “continue to face a hard border with all its costs and uncertainties and see their equivalents continuing to benefit from de-facto unfettered access”. 

“It’s not clear how this action will give the EU an incentive to be more willing to discuss ways to reduce the burdens on UK exporters.”

The FTA simply didn’t get rid of the invisible barriers to trade and exporters are feeling the impact.

Although exports, and imports, with the EU remain suppressed for several reasons and not just post-Brexit transition, Metro are at the forefront of the industry to provide customs and border process solutions covering customs through to transit documentation. We also offer, through our group network, European transport services that are still operating with regular, reliable and competitive departures both to and from The UK. Hopefully, we will see an upturn in business with the BLOC in Q2, and a level of normality will return to the UK’s European trade and commerce.

Please contact Andrew White, leading our customs and brokerage business unit, for further information and assistance on this or any other border control measures with the new trading environment with the EU.