Forwarders told to prepare for no-deal Brexit
16 / 01 / 2019
Freight forwarder association BIFA has told its members to prepare for the UK to leave the European Union with no deal in place.
Meanwhile, the Freight Transport Association (FTA) has warned that leaving the European Union without a deal would be catastrophic for UK supply chains.
In response to the UK Parliament voting against the current deal negotiated with the EU, BIFA director general Robert Keen urged UK freight forwarders to prepare for a disorderly exit on March 29.
“The decision taken by Parliament is historic and needs to be acknowledged," he said. “With just a couple of months to go before the exit date, the rejection of the deal leads BIFA to recommend that our members, which are the companies that handle the processing of most of the UK’s visible trade, to prepare on the basis that there will be a hard Brexit.
“Speculating about any other outcome is inadvisable until UK Government provides us with clear guidelines.
“A hard deal may well be very disruptive and damaging for the UK economy as a whole, but freight forwarders – many of whom are Authorised Economic Operator (AEO) accredited – will play a key role in tidying up the mess left by the politicians by ensuring UK importers and exporters can continue trading without undue disruption with the rest of Europe after March 29.
“BIFA has always stated its belief that a disorderly Brexit would be the worse outcome, as it is likely to increase trade barriers and impose significant restrictions on the exchange of goods between the EU and the UK.
“Whilst BIFA’s executive management has engaged with various government departments over the last two years in regards to issues that affect the movement of visible trade post March 29th, our members have also been discussing the possible impacts with their clients.
“Large and small, BIFA members have taken actions to review all options to overcome the disorder that a no-deal Brexit could bring to international trade in order to define sustainable solutions as the set of Brexit conditions becomes clearer.
“BIFA will be renewing our appeals to the responsible bodies in London and Brussels to do the utmost to prevent this scenario. As far as we are concerned, our members are focussed on ensuring the ongoing efficient flow of freight for our customers.
“One thing is certain, our members are ready, willing and able, to clear up the mess that has been left by politicians.”
The FTA urged politicians to reach a decision which supports the nation’s businesses or risk putting the UK’s trading platform and economy in jeopardy.
"A No Deal would increase delays at the country’s borders, increase red tape and costs for logistics businesses already operating on narrow margins, restrict access for transport to the EU and reduce the available skilled workforce for logistics operators – all problematic on their own, but when viewed together, a perfect storm which could cause untold damage to businesses and individuals right across the country, not just those trading directly with the EU,” said James Hookham, deputy chief executive at FTA."
He added: "The FTA is urging the government once again to reach an agreement with the EU which can keep goods and services flowing with minimal or no hindrance – that is what was promised two years ago, and that is what the industry expects.”
This view was echoed by John Perry, managing director of logistics firm SCALA: "Until recently, a no-deal Brexit was seen as such a remote possibility that many businesses are only just starting to put contingency plans in place.
"However, whether a deal is agreed or not, there is a strong possibility that Brexit will cause months of severe disruption to UK/EU cross-border movements that businesses should be preparing themselves for.
“In the last few days we’ve heard mounting reports of companies that have begun stockpiling goods and raw materials, including Tesco and Marks & Spencer, in an effort to minimise the impact of this possible disruption. While this will certainly buy them some time, it is only a short-term solution.
“In addition to stockpiling, businesses should be urgently reviewing their supply chains to identify any major risk areas and implement risk-reduction strategies.
"Affected organisations should also consider applying to become an Authorised Economic Operator, as it’s widely agreed that achieving AEO status is likely to be one of the most effective mitigating factors in any Brexit situation.
“If, however, Article 50 is revoked, as many are hoping it will be, this will still have been an extremely valuable exercise.
"After so many years of frictionless trade, it’s clear that many of us have been delaying on these big decisions. If nothing else, the past two years have proven how precarious our situation really is. Brexit should therefore act as the catalyst businesses need to re-optimise their supply chains, ensuring they are as agile as possible and prepared for any future unforeseen events.”
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