Cross-channel shippers get six-month transition if no Brexit deal agreed

Logistics companies shipping goods between the UK and EU states will have six months to adjust operations under European Commission ‘safety net’ measures to minimise disruption of air and road links if no post-Brexit agreement is reached.

The Commission last week put forward a set of “targeted contingency measures” ensuring basic reciprocal air and road connectivity between the EU and the UK from January until June 2021, in the event of a no deal Brexit.

The UK left the European Union on 31 January 2020. At the time, both sides agreed on a transition period until 31 December 2020, during which EU law continues to apply to the UK. The EU and the UK are using this period to negotiate the terms of their future partnership. However, the outcome of these negotiations remains uncertain at the time of writing.

The aim of the contingency measures is to cater for the period during which there is no agreement in place. If no agreement enters into application, they will end after a fixed period, the Commission underlined in a statement.

“Negotiations are still ongoing. However, given that the end of the transition is very near, there is no guarantee that if and when an agreement is found, it can enter into force on time. Our responsibility is to be prepared for all eventualities, including not having a deal in place with the UK on 1 January 2021. That is why we are coming forward with these measures,” commented Commission President, Ursula von der Leyen.

Mitigating air and road disruption

In the statement, the Commission noted that it has consistently called on all stakeholders in all sectors to prepare for all possible scenarios on 1 January 2021. While a 'no-deal' scenario will cause disruptions in many areas, some sectors would be disproportionately affected due to a lack of appropriate fall-back solutions and because in some sectors, stakeholders cannot themselves take mitigating measures.

The Commission has put forward a number contingency measures “to mitigate some of the significant disruptions that will occur on 1 January in case a deal with the UK is not yet in place.”

They include basic air connectivity – a proposal for a regulation to ensure the provision of certain air services between the UK and the EU for six months, provided the UK ensures the same; aviation safety – a proposal for a regulation ensuring that various safety certificates for products can continue to be used in EU aircraft without disruption, thereby avoiding the grounding of EU aircraft; and basic road connectivity – a proposal for a regulation covering basic connectivity with regard to both road freight, and road passenger transport for six months, provided the UK assures the same to EU hauliers.

The statement added: “Readiness and preparedness for 1 January 2021 is now more important than ever. Disruption will happen with or without an agreement between the EU and the UK on their future relationship. This is the natural consequence of the United Kingdom's decision to leave the Union and to no longer participate in the EU Single Market and Customs Union. The Commission has always been very clear about this.”

Safety net for logistics firms

In response, British freight industry body Logistics UK said the announcement of contingency measures for road and air access for logistics operators for six months after the end of the transition period, if adopted in time, will come as “a welcome safety net for logistics businesses” which have been unable to plan for the future, due to a lack of certainty on whether and how they will be able to operate at the end of the transition period.

“However, six months is not a very long time in business, and for Logistics UK members, it is vital that negotiators return to the table to work out a free trade agreement between the UK and EU to ensure the security of their businesses and livelihoods in the years to come,” noted European Policy manager, Sarah Laouadi.

Minimal delays

Although surveys and anecdotal reports have continued to highlight a lack of preparedness for the new trading conditions from 1 January among large numbers of the estimated 145,000 British companies that are currently trade between the UK and the European Union, Logistics UK is hopeful that a targeted effort at preparing bigger import and export companies for the changes could be successful.

Alex Veitch, general manager for public policy, commented: “I know that the (UK) government is focussing on what they call ‘high-value traders.' So, there are about 10,000 or 11,000 businesses who account for about 90% of our trade by value with the EU. And the government is going hammer and tongs to get those businesses as ready as possible. And that’s fantastic, because if they can be ready, then we may see minimal delays.”

He sympathised with smaller trading companies that still believe that a trade deal between the UK and the EU “is going to solve all these issues; and it won’t: you will need to do customs declarations either way. Even for these first six months of imports, where we will have an easier time at our borders. So please, check out Gov.UK, get your paperwork ready, because it’s all systems go from 1 January.”