With just five weeks to go before Brexit, businesses across the UK are racing to stockpile goods before new customs checks come into force on Jan 1, pushing up cross-border delivery costs and cutting capacity, say industry sources.
Port of Dover, UK
Aerial view of the Port of Dover. Photo: Port of Dover / Flickr
According to Reuters, logistics companies have witnessed a surge in demand to bring goods into the UK before any potential disruption occurs in January, with reports of customs agents being overwhelmed by calls for help from traders dealing with new rules for the first time.
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“We have told our customers that the best thing you can do now is stock up, stockpile, and they’re bringing in as much as they can,” Jon Swallow, director of Jordon Freight, told Reuters.
“The consequence of that is there’s simply not enough capacity and the prices are going through the roof.”
He added that the rise in demand had driven up prices by as much as 20% in the past few weeks, and would likely continue to rise as the Brexit date draws nearer.
According to Tony Shally, managing director of freight specialist Espace Europe, the cost of journeys between France and England and Poland and England have risen by over 10%.
The frantic rush reflects the necessity for Britain to prepare for its departure from one of the world's largest trading blocs, a decision which has sparked the need for customs and safety declarations, and some checks, when goods move to and from the European Union from January 1, 2021.
Read more: UK urged to stockpile drugs in face of Brexit & Covid
Many companies had previously stockpiled goods ahead of past Brexit deadlines, though now many are in a weaker financial position after the coronavirus pandemic battered cash flows.
As part of this rush to bring goods into the country, companies are having to navigate customs declarations for the first time, putting further pressure on them and on the small customs sector.
Sam Harris, operations manager at Freight UK, told Reuters that answering the phone to new customers had become a full time job in itself. “Everyone is panicking," he said. “Most know nothing about customs."
“We had a farmer on the phone and he had no idea whatsoever about what needed to be done.”
Read more: Aerospace chief warns delayed Brexit could harm industry
With both London and Brussels refusing to give ground on certain key issues, there are fears that the lack of clarity over what the UK's future relationship with the EU will look like could lead to a dysfunctional market and inflated costs at the end of a year in which Covid-19 has taken its toll.
Yesterday, the EU's chief negotiator Michel Barnier delivered a warning to his British counterpart David Frost that if the UK remains intransigent on these difficult issues within the next 48 hours, he will pull out of Brexit talks due to be held in London this weekend.
If Barnier does walk out of the negotiations, with just 35 days left before the end of the transition period, it would present probably the most dangerous moment yet for the beleaguered talks.
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