Brexit: Deal or no deal

Still hoping for no Brexit – port of Hamburg (Credit: Port of Hamburg)

“We still wish that it doesn’t come to any Brexit.” That was the comment to DPC from Germany’s biggest port, Hamburg, but like most European cities, it has made detailed preparations – including offering German nationality to British citizens who see Hamburg as their home.
The UK is an important customer. In 2017, it ranked ninth, with throughput at 4,254 million tonnes, representing 3.1% of the total cargo handled by Hamburg.

“In the event of no deal, we expect to see increased costs as well as time and effort for customs,” a port representative told DPC. “That can hamper trade for shippers with trading partners in the UK – and 70% of the respondents to a survey by the Hamburg Chamber of Commerce assume that business with the UK will deteriorate after Brexit if no free trade agreement is reached.”

This may particularly affect UK bulk volumes in the port – cargoes such as liquid, solid, and waxy petroleum products, gypsum, cement, fertilizers, etc. Import cargoes that would be affected include building materials – stone, gravel, sand – as well as oil and petroleum products.

“Companies would like to see clarity soon on the form of trade relations with the UK,” the representative concluded. “They are very concerned about additional bureaucracy, such as customs documents and export permits, as well as tariff barriers.”

As opposed to Hamburg, Britain’s biggest box port, Hutchison-owned Felixstowe told DPC that, “I’m afraid that, as a matter of policy, we are not speculating on possible Brexit outcomes.”

However, the port has made detailed preparations and offers the following advice: that businesses can take now in preparation: register for a UK Economic Operator Registration and Identification number, ensure contracts INCOTERMS reflect your status as an importer/exporter, consider how to submit all customs-related declarations, check whether additional declarations or licenses will be required for specific products, establish processes to identify the correct classification and value of goods for the customs declaration and review supply chains with partners and logistics providers to ensure action is being taken at all levels to minimise the risk of delay.

A representative of Britain’s biggest port operator, Associated British Ports (ABP), told DPC, “ABP has invested GBP250 million since the UK referendum to ensure that we have the very best services on offer. We work with all relevant authorities and our industry partners to ensure we can continue to help trade flow and grow after Brexit.”

CEO Henrik Pedersen added, “Keeping Britain trading is a responsibility ABP is committed to. We have already seen volumes begin to rise at our ports on the Humber as customers look for alternatives to Dover, and we will continue to invest to drive trade and create jobs over the longer term.”

No firm direction
Directly facing the continent, the port of Dover will be one of the UK’s most affected ports, especially in terms of a no-deal Brexit. Dover’s CEO Doug Bannister told a UK Channel 4 television documentary that he worries that the UK government has given, “no firm direction” on technology for additional security checks in the event of a no-deal Brexit. “We haven’t seen increased manpower, we haven’t seen any new systems or processes. For us, the most important thing is: what are the physical checks on the dock? If those are minimal, then we can maintain operations. If a hard border means that we have to do physical checks, then that is going to create a lot of problems for us.”

A port representative told DPC, “No-one quite knows the outcome at this stage, and we can’t afford to have an opinion on it. But we have issued a statement and we are ready to welcome customers into the future.”
However, the spokesperson continues, “What has not changed is the ability of one port, two ferry operators and a fleet of 12 dedicated ferries to be capable of handling up to 10,000 lorries a day – a 180 km trade expressway. Dover will remain the only place from which such a fleet can achieve up to 120 ferry movements a day, where each ferry is berthed, unloaded, re-loaded, and heading back to France in as little as 45-50 minutes. This finely-tuned engine simply cannot be matched in terms of capacity or speed.”

Finally, a representative for DP World’s UK operations at Southampton and London Gateway said the ports were confident they could handle the change. “We’re telling cargo owners not to let Brexit uncertainty be a cause for concern. DP World already clears over 90% of cargo that comes into our UK terminals within an hour or less. Our UK logistics facilities already have the customs clearance, inspection facilities, and infrastructure in place to keep trade flowing, regardless of a deal or no deal.”
The representative pointed out that over 90% of the cargo DP World’s UK terminals currently handle is non-European. “Almost all of these countries have ‘third country’ status when trading with the UK, meaning goods arriving are subject to customs checks. Through the software and technology that currently exists, DP World and the authorities are able to clear over 90% of cargo within about an hour of a vessel arriving in port.”

View from the other side
Over, on the continent, on the French coast, Norlink Ports, an association of 25 ports and inland gateways in the Hauts-de-France region, is planning measures to reduce Brexit’s commercial impact with the goal of making the group, “the port and logistics hub of northwest Europe”. These include a new customs office with a staff of 200 in Calais which will work with Dunkirk to manage truck traffic on ferries to and from the UK.

“We prefer to consider the worst scenario to ensure fluidity,” states Dunkirk CEO Stéphane Raison. “Some 70% of trade to and from Britain is by road, crossing the strait either by sea to Calais or Dunkirk or via the Channel Tunnel.”

Further north in Rotterdam, the port’s total throughput – 40 million tonnes British imports from Rotterdam consist mainly of ro-ro cargoes, containers, and liquid bulk, while British exports to the Netherlands are mostly liquid bulk, shortsea, and ro-ro cargoes.

“As a result of Brexit, maintaining the quality and capacity of customs will be the highest priority for Rotterdam,” a PRA representative told DPC. “According to Dutch customs, as of 30 March 2019, more than a hundred extra officers will be required in the Rotterdam Rijnmond area. In addition to this, extra inspections and inspection points are needed. This will also apply to customs in the UK, and it remains to be seen whether customs’ capacity can handle all the extra declarations.

“Finally, it’s important that the EU ensures a level playing field between its member states and the UK. If bilateral agreements are made, they must apply to all ports on the continent and in the UK, with the same procedures.”