The FSDF on Brexit and the challenges for the food industry
Chris Sturman, chief executive of the Food Storage and Distribution Federation, examines in the April issue of Cold Chain News the potential impact of Brexit on UK temperature-controlled food logistics.
“The Food Storage and Distribution Federation (FSDF) is working with government and other trade associations to help shape future customs border arrangements for the UK after we leave the EU. The Prime Minister has now made it clear that the UK will exit the European Customs Union. How will that decision affect the food supply chain?
Currently, 28% of the UK food supply originates from EU countries. On top of this, an added 22% comes from the rest of the world. Some 14,000 trucks a day come through Eurotunnel and via the Dover-Calais ferries, of which 15% are likely to be refrigerated. This equates to 2,100 vehicles a day, bringing time-sensitive loads of temperature-controlled food into the country.
Changing the customs arrangements for these vehicles in any way will prove difficult if we are to maintain a frictionless border. Research shows that there are six meals (or three days) in the supply chain, which leaves very little room for delay. It will also add to transport and logistics costs which will drive increases to food prices.
The new Customs Declaration System needs to be working correctly and right first time in January 2019, ready to deal with a capacity of 300+ million transactions a year. It must be robust and fully road-tested before launch so there are no glitches, with all stakeholders fully trained and fully competent by launch and AEO (Authorised Economic Operator) certification must also be achieved by the same date.
Arguably, frictionless trade appears not to be an EU objective. Leaving the European Customs Union will automatically lead to delays, added operating costs and increased inventory levels and costs. Consumers need assurances that delivering frictionless trade is a top priority in Brexit negotiations. Fortunately, it is the same for industry and commerce in EU member states, particularly when you take into account that a one-hour delay at a port or terminal can cost £15,000 to road haulage alone. The prospect of any delays coming into the UK could be a major disruption to food supply and be expensive – and this will be passed down the chain, significantly increasing the cost of any imported food. Our ports need to be kept moving and we need to ensure that any customs processes are simplified or removed to facilitate the movement of goods.
We need a system which works and is trusted by all parties, to avoid having to make physical checks on vehicles and containers passing through ports. And our negotiators need to ensure that our friends in the EU make reciprocal arrangements on borders under their control to prevent delays anywhere in the supply chain. The spectre of 25 miles of queues in France of vehicles waiting to enter the UK is very real.
This can also exacerbate the problem caused by so-called clandestines. Whilst the media spotlight has dimmed on Calais, the problems that drivers experience have not gone away, and have spread to other European channel ports. Indeed, the traffickers are becoming increasingly resourceful in their attempts to smuggle illegal immigrants into the UK. As the new controls are introduced and delays form beyond the 1km walled zone, the opportunities for clandestine infiltration increase dramatically and the food supply chain is at real risk of contamination unless properly controlled. The costs to logistics and transport companies will be crippling and the impact this will have on the food chain will be unfettered. One thing that all parties must keep in mind – failure is not an option.