The UK government must provide the logistics industry with clear and stable information so that it can invest in the right technological solutions to prepare for Brexit – and far more time to prepare for a no-deal exit, if no withdrawal agreement can be reached – delegates at Multimodal 2019 heard.
The technology potentially exists, at least on the Customs side, and could be put in place over time to ensure a relatively seamless supply chain in a ‘no-deal’ situation, a panel of experts at the event said; but companies cannot invest without knowing what the right system needs to be. And even once an appropriate system has been identified, importers and exporters need time to prepare their processes.
Given the large extra volumes of clearances that will be required after the UK leaves the EU, unless the UK and EU regimes are fully aligned, this means the systems will need to automated, meaning import and export companies will need years, not months, to prepare their systems and processes internally, logistics experts told the packed audience listening to the ‘Brexit lessons and opportunities’ discussion panel.
“The technology is there as a tool, but this is a cart and horse situation,” said Tim Reardon, head of EU Exit at the Port of Dover. “Until we have defined what the process is that the technology needs to deliver, there isn’t much point in developing it.”
Eurotunnel’s Public Affairs Director John Keefe said that with so many players involved in the supply chain, there was an urgent need for government to refocus and give a clear and stable definition of what the Customs process would be.
“All the energy is going into managing the negative consequences of ‘day-one no-deal’; very little energy is being put into avoiding those negative consequences,” he said.
The Freight Transport Association (FTA)’s head of global and European policy, Pauline Bastidon said there was an urgent need for clarity. “FTA continues to advise its members to use the time they have to prepare for a ‘no deal’ outcome, but many companies are reluctant to invest heavily without certainty that these investments will be required,’ she said.
“This is probably the biggest challenge we have faced in a generation and the implications for logistics are huge. Government can do a lot to support the logistics industry as companies prepare themselves.
“FTA is urging the government to extend the easements granted pre-29th March, provide clear, end-to-end guidance to industry setting out the process and requirements on both sides of the borders and to work with the industry to increase the attractiveness of transit and Customs facilitations.”
Peter MacSwiney, chairman of UK customs technology specialist ASM, said it was not surprising that people were hesitant to invest in technology without knowing if they were developing the appropriate solution.
“The one thing we have lacked is certainty,” he said. “How many businesses would spend thousands of pounds on a system that might not be right?
“If we knew what we were faced with, we could find solutions to deal with it. The technology is there, but we have to develop it and we should think in terms of five years and a minimum of three years to get it working and to train people to use it.”
And there are also human resource capacity issues, he said. Although the UK Customs system Chief was likely to be able to handle hundreds of thousands of additional annual customs clearances, the capacity among importers and exporters or their customs brokerage representatives to file those extra claims was not currently available, MacSwiney highlighted.
Shahar Ayash, managing director UK and Europe at logistics specialist Tigers, said that Brexit offered both a challenge and an opportunity for the industry. He said Tigers had invested in technology as well as warehousing in the UK and in mainland Europe and was advising customers to split their stock of goods into UK and mainland EU distribution centres (DCs).
That will help minimise congestion issues, but it also makes better logistical sense – especially in the emerging logistics environment where e-commerce related business was demanding faster fulfilment cycles and hence goods stored closer to the end consumer markets rather than in one single regional DC. “It will mean a better service for their customers and there is an environmental aspect to this as well,” he noted.
Panel host Peter Ward, CEO of the UK Warehousing Association (UKWA), noted that Brexit had, once again, “turned conventional wisdom on its head,” during the discussion, with an informal poll among delegates indicating that few felt well prepared for Brexit, and those numbers had declined further by the end of the discussion after the panel of experts revealed the full scale of the challenges facing freight firms and their customers.
“Usually at forums such as these, the dispersal of information provides a level of comfort; but, according to a polling of the ‘standing room only’ audience, the number of delegates feeling unprepared for Brexit doubled during the hour-long discussion,” Ward highlighted.
Bastidon called on the industry to collaborate to find a solution.
“A lot of people are spending a lot of time preparing, but not talking to other partners in the chain,” she said. “It is part of the problem; we need to encourage all partners to communicate and work together.”
Luis Gabiola, director for commercial operations and logistics at the Port of Bilbao Authority, agreed that the relevant authorities needed to be clear about how new regulations would work. “This is not a technology problem, but a regulation and processes issue, in terms of what is needed from the different authorities, how these diverse institutions will communicate and what protocols, or law interpretations will be adapted, as there are significant disagreements at the moment,” he explained.
Over 9,000 supply chain decision makers reportedly visited 225 exhibitors over the three-day free-to-attend UK show. Next year’s Multimodal takes place from 16-18 June 2020 at the NEC Birmingham.