Post-Brexit: measuring the impact on UK ports
British ports have faced a series of challenges, from the Covid-19 pandemic to the impact of Brexit. After more than half a year, Ilaria Grasso Macola analyses how ports are coping with Brexit and what the industry has done to ease the process.
In June 2021, the British Ports Association (BPA) published a toolkit to help ports and maritime businesses continue to deal with the Covid-19 pandemic, as well as challenges posed by the implementation of Brexit, which took place on 1 January.
“Ports are today facing a new world and new challenges,” says Zeina Sawaya-Melville, who is an independent port consultant and the toolkit’s author. “Brexit is quickly changing trading relationships [and] the pandemic has accelerated the 4th industrial revolution.
“UK ports and maritime operators are at a business crossroads, [therefore] it is critical for operators across the maritime sector to consider if their strategy is still fit for purpose.”
Freight statistics from the UK Department for Transport for the first quarter of 2021 highlighted the impact that Brexit and the pandemic had on British ports.
Compared to January-March 2020, the total freight tonnage decreased by 9%, while traffic fell by 13% – with inward units hit the hardest, with a 17% fall.
“This is the first time the industry as a whole has been able to see the aggregate impact of Brexit on port volumes,” explains BPA policy manager and economic analyst Phoebe Warneford-Thompson.
“Due to the timing of the Brexit deadline falling at the same time as the third national lockdown, it is challenging to truly separate their impact and draw firm conclusions on which had a more harmful impact on trade in the first quarter.
“January saw a fall in goods imports and exports that was the largest month-on-month drop since records began, which was ultimately driven by the Brexit deadline at the very end of 2020.
“Of course, full import controls will not come into force until January 2022, so the full extent of the impact of Brexit on trade – temporary or permanent – has not yet been realised.”
Seven months in: what has changed?
According to UK Major Ports Group CEO Tim Morris, things for ports have changed, but not in the dramatic way it was predicted, as the large majority of UK ports are used to dealing with goods coming and going from all over the world.
“They were already handling significant volumes of trade with rest of the world locations, so the idea of being able to move goods across borders wasn’t a new thing,” he explains. “That’s not universal, as for certain ports that only traded with the EU, it’s more of a substantial change.”
Compared to before Brexit, the UK has introduced new requirements when it comes to the pre-notification of cargo travelling from the EU to the UK.
“It did this through a completely new system called Goods Vehicle Movement Service, but to implement physical checks the government will wait until January 2022,” explains Morris.
Pre-notification of cargo was not the only thing that has changed, as the UK introduced tax reporting elements as well.
On the EU side, more requirements were brought in at the start of January, but the EU extended a grace period to allow people to understand the requirement more thoroughly.
Weathering the Brexit storm
The UK Government and industry stakeholders applied a series of measures to prepare for the implementation of Brexit and assure the smoothest transition possible.
As reported by the Financial Times, UK ports have avoided the post-Brexit mayhem due to several factors – including stockpiling, exporters showing compliance to the paperwork, and the collaboration from the French authorities.
On the industry side, duties revolved around notification requirements.
“Some of these requirements span on each of the supply chain players,” Morris continues. “Primarily there are some with the people moving the cargo but also with the shipping operators.
“[Each player] needs to know that the goods entering the vessels have achieved the right levels of requirements for submitting data, so everyone has had to get to grips quite quickly with these new data requirements.”
The Short Straits is, and continues to be, the preferred route into Europe for the freight industry.
In major ports such as Dover, operations continued smoothly even after the transition period ended, with 300,000 lorries disembarking there between January and early March.
“The latest figures are very encouraging; it is a huge milestone for the port to have welcomed well over a quarter of a million lorries since the end of the Brexit transition period,” comments Port of Dover COO Sarah West. “This is a clear indication that the Short Straits is, and continues to be, the preferred route into Europe for the freight industry.
“I’m really pleased to see every part of our operation adapt so well to the new procedures involved, ensuring that Dover will always provide the most efficient and resilient route whatever challenges we face.”
Even though the measures implemented were in some cases extremely successful, small businesses were impacted more harshly as they suffered from problems with groupage, delay on imports from the EU, and increasing costs of moving freight, according to the Financial Times.
Brexit: a mixed result for ports
Even though Brexit means more system and administrative requirements, the plus side of Brexit for ports was that shipping stakeholders were forced to think about routing choices more carefully.
“We’ve seen some increases in services to different ports as people look to investigate the different routes to move in goods to and from the EU,” says Morris. “One needs to be slightly cautious about saying what the full effect has been because you know we haven't had the full suite of requirements, certainly on the UK side.”
As for the future of UK ports in a post-Brexit world, ports will see a continuation of stakeholders thinking through their supply chain routing choices and understand that old is not necessarily still gold.
“Perhaps [they’ll] understand that the way they have always done things in the past might not be necessarily the right or appropriate way for the in the new world, where there are some unfortunate but necessary additional frictions in the movement of goods.”