The authoritative source for independent research on UK-EU relations

29 Jan 2021

Relationship with the EU

“Post-Brexit trading is really hard”; “stuff is starting to move, but morale and motivation in the team is very low”; “trade has to pick up soon, but we don’t really know how it will.” These are just some of the sentiments recounted to me by cold chain professionals in week four of our new permanent trading relationship with the EU.

Through the prism of the political and econ omic debate that has raged for the past four or five years years, things are great… or terrible, temporary…. or never-ending, largely dependent on what you think of the idea of Brexit.

That debate is not something that transport planners, warehouse managers, lorry drivers, buyers and sellers; or customs agents, vets, and border officials, care much about right now. They are battling to just do their jobs within realistic timeframes and in reasonable working conditions.

Red tape is exhausting. It causes tension, stress and arguments that are wearing people down. There is little job satisfaction in spending hours, even days, on end trying to complete the same tasks that took minutes only a few weeks ago.

There are experts (many writing on this site) far better qualified than me to pass judgement on whether the TCA is a good deal, but I can bear witness to the human impacts of the UK and EU failing to agree a real implementation period.

It is simply not right to pile this much pressure on this many people in the middle of global pandemic. So, the question I must ask – on their behalf – is what is this all for?

Within the haulage and warehouse sector, there remains genuine belief in the economic hopes of a future outside the EU.

In many ways UK-based logistics suffered in the Single Market. Free movement of goods, services and labour dramatically changed our supply chain.

Today, 80% of the vehicles and drivers that fetch and carry goods between UK and the EU, are not from UK. EU hauliers, once here, compete for inland haulage work, making up maybe 20% of the total.

The cost base of haulage companies operating out of Eastern Europe just does not compare to the high wages, tough regulation and high fuel costs facing UK-based operators.

Consumers have benefitted for sure. In food the 40-year rise of the supermarkets has coincided with an ever-expanding pool of cheaper logistics alternatives.

The result is that a haulier can expect to be paid largely the same money for a job today that they were paid 20 years ago.

This isn’t a simplistic protectionist lament. Competition undoubtedly contributed to major advances, innovations and change in our supply chains. We are by many factors more efficient, more responsive, and more productive today than we were 40 years ago.

However, we are still largely underinvested and if two generations of cost-cutting is our legacy, it is hard to see how that suits our future.

The way we move, and store, goods today must change if we are to meet the challenges of a net zero world before 2050.

The kind of investment required to buy the vehicles, build the infrastructure and invent the technology we need will not be possible if we perpetuate race to the bottom impulses in our supply chains.

Our leaders have promised that Brexit and net zero and levelling up go hand in hand, but it has not been a great start.

Everything about their immediate approach to life outside the Single Market suggests there is no long-term plan.

The focus has been on preventing queues rather than boosting trade, on avoiding temporary supermarket shortages rather than imposing import rules. These actions do not suggest a country ready and confident to promote its domestic industries.

In the short term, our exporters battling through the mountains of red tape could reasonably expect the UK to similarly inconvenience those wanting to sell us prosecco and BMWs in July. We won’t, and so we need a different plan for how we can go about bringing the EU into discussions about systems and technologies that can make trading with them easier.

Thinking longer term, are we going to restrict, regulate and charge non-UK hauliers competing in our market? Are we going to proactively prefer UK-based logistics companies, encouraging them to invest, grow and innovate?

Will those seeking to trade with us need to meet the same high net-zero environmental standards we will impose on ourselves? These decisions are vital to developing a strategy that gives businesses the confidence to invest in onshore supply chain infrastructure.

We expect our Government to develop and deliver, in collaboration with business, a plan that asserts and promotes UK businesses at a global level. If not, why did we ‘take back control’ and what on earth is all this for?

By Shane Brennan, Chief Executive of the Cold Chain Federation which represents businesses that store and transport frozen and chilled food and other goods into and around the UK. 

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