Wednesday 26 June 2019

Industry fears ‘wheels will stop’ as post-Brexit migration policy bites

More details have emerged over the last month of the potential operational consequences of Brexit for both international and domestic hauliers.

The prime minister Theresa May is currently preparing for an EU leaders’ summit in Brussels this week amidst reported deadlock over the Brexit ‘backstop’ arrangement, which aims to avoid a hard border between Northern Ireland and the Irish Republic after the UK leaves the EU.

The summit had been described as the “moment of truth” for an agreement on a Brexit deal between the two parties, although developments in the last few days suggest that no agreement will be reached this week, and that an emergency November summit will therefore be on the cards.

Meanwhile, fears were growing among transport trade bodies that the government’s intention to curb immigration from the EU for lower-paid workers after Brexit would curtail the sector’s ability to deliver. Concerns rose after Mrs May announced this month that “high-skilled” workers – likely to incorporate those earning salaries of £30,000 or more – would be prioritised.

The Road Haulage Association (RHA) said it understood leaving the EU would end free movement of people into the UK, but said it was “very concerned” that government proposals on post-Brexit immigration risked “over-restricting” the movement of labour that businesses would still require.

“UK haulage operators, employing foreign drivers, are making a massive contribution to the economy – they’re helping to move 98 per cent of our food and agriculture,” said chief executive Richard Burnett.

“The use of an arbitrary limit based on wages to limit movement of labour is badly mistaken for our sector and many others… The effects will not be gradual – they will be immediate.”

In addition, the stated government policy position of “honouring all EU citizens who are here already is not sufficiently clear, and some staff are already leaving because of that lack of clarity”, the RHA said.

“This means our industry’s driver shortage is… set to get worse in the short term, as those who are leaving may not return.”

The association said: “If the government is determined not to allow qualified non-UK HGV drivers to work in the UK, then it is essential that they maintain the haulage industry’s efficiency and provide the funding that is so desperately needed to redress the HGV driver balance.”

The RHA suggested that plans being put in place to exempt seasonal agricultural workers from migratory restrictions should also be applied to the transport industry due to its reliance on a year-round foreign workforce – although Mrs May has expressed reluctance to commit to other exemptions.

Added Richard Burnett: “We are deeply concerned that if no exemptions are granted and no funding to train our own workforce is provided, then the wheels of the industry that puts food on the shelves and facilitates manufacturing output will, quite simply stop.”

In September, the Freight Transport Association (FTA) also criticised plans to curtail migration, as set out by a report from the government’s Migration Advisory Committee (MAC), which it said “totally fails to recognise, and actively diminishes, the role of lower-skilled migrants within the UK’s economy”.

This was “hugely disappointing from a logistics point of view,” said Sally Gilson, FTA’s head of skills.

She continued: “The logistics sector, especially when you consider roles such as HGV drivers and warehouse staff, is reliant on access to non-UK workers, currently employing 43,000 HGV drivers, 113,000 warehouse workers and 22,000 van drivers from the EEA – and even more during peak times of year like Christmas.

“Without them, schools, shops, hospitals and retailers, as well as manufacturers and homeowners, will all find it harder to access the goods they need in order to conduct their daily lives.

“Due to the regulation of the sector, logistics businesses cannot immediately look to other non-EEA countries to help plug the skills shortages which losing these European workers will cause. And the problem is further compounded when you consider there are already more than 52,000 vacancies for HGV drivers nationwide.

“Losing the services of these vital EU workers after Brexit would be devastating to the nation’s ‘just in time’ economy – and next day deliveries would soon be a thing of the past.”

In the meantime, the government has released specific advice for international haulage operators in what it continues to call “the unlikely event” of a no-deal scenario – guidance which the RHA said had come “too little, too late”.

“It is important to stress that for road haulage, our negotiating objective continues to be to maintain and develop existing levels of transport connectivity with the EU, without the need for new transport documents or systems,” said the Department for Transport (DfT) in a special Brexit technical notice.

“We remain confident of achieving an agreement that delivers this, but we need to be prepared for all scenarios. That is why we have introduced [legislation] to enable us to deliver new systems for road haulage if there is no deal [and] ratified the 1968 Vienna Road Traffic Convention, for UK licence holders to continue to drive in the EU if there is no deal.”

In a no-deal situation, UK hauliers would no longer be able to rely on automatic recognition by the EU of the existing UK-issued community licences, which allow them to make unlimited international hire-and-reward journeys within the bloc. This may limit their access to EU markets, and would also end their ability to engage in cabotage operations.

“EU countries may choose to recognise that UK-issued operator licences and associated authorisations are based on the same standards as EU community licences and do not require further authorisations,” said the DfT.

“This would ensure continued cross-border trade, but cannot be guaranteed.”

Should this not happen, UK hauliers will still have access via the existing European Conference of Ministers of Transport (ECMT) permit scheme, which allows operators carrying permits to move goods to or through 43 countries, including all EU states except Cyprus.

ECMT permits would be limited in number, DfT pointed out.

“ECMT permits can be used for different vehicles at different times but must be carried in a vehicle whilst it is making an international journey. The permit allows transit (though this is restricted in Italy, Austria, Hungary, Greece and Russia) and allows cross trade.

“In addition, some old bilateral agreements between the UK and specific EU countries may come back into force if there is no deal,” said the notice.

“The UK would also seek to put in place new bilateral agreements with EU countries to provide haulage access. Some of these bilateral agreements would also require the possession of a permit to allow access to the EU country concerned… The timing for this and the number of permits… cannot be guaranteed.”

In addition: “Transit arrangements and the application of permit requirements to own account haulage (carrying your own goods) under bilateral agreements would also depend on the outcome of negotiations with other EU countries.

“To manage this process, the Haulage Permits and Trailer Registration Act 2018 puts in place arrangements to allocate permits required for international journeys, whether issued under the ECMT or bilateral arrangements, and to enforce these requirements in the UK.”

DfT stated that: “Up to 984 annual Euro 6 ECMT permits, 2,592 monthly Euro 6 ECMT permits and 240 monthly Euro 5 ECMT permits are available…

“The Driver & Vehicle Standards Agency (DVSA)  is developing new systems for the allocation of permits needed from 29 March 2019. We expect them to be taking applications for ECMT permits from November 2018.

“We expect demand for ECMT permits will significantly exceed supply. As such, permits will not be allocated on a ‘first-come-first-served’ basis, but rather according to criteria that have been set out in regulations under [the new legislation].”

Details of the process by which the government intends to allocate permits con can be found in the government’s response to a recent consultation on the matter.

Key criteria informing the allocation of permits will include the number of journeys being made, the industrial sector in which the haulier operates, vehicle emissions, and the degree of existing international business.

Hauliers will need to have a Vehicle Operator Licence (VOL) online account to apply for permits.

It was important that hauliers should consider contingency plans to account for the possibility of not receiving the number of permits they have applied for, DfT said.

“This may include planning for alternative routes to move goods, or using different vehicles or modes of transport (such as containerised transport or operating ‘unaccompanied trailer’ business models).

“Hauliers, and businesses who use hauliers, should consider the implications of possible impacts on supply chains including reduced capacity at ports, reduced reliability and potential higher rates.

“Hauliers and businesses will of course need to ensure their logistics and transport arrangements ensure the correct documentation and permissions are carried to be able to trade, including any permits, licences and proof of qualification. Businesses should also ensure they have the correct customs documentation.”

Meanwhile, trailers travelling in the EU (except those only moving between the UK and Ireland) will need to be registered with the Driver & Vehicle Licensing Agency (DVLA) and display their own registration plate separate from the towing vehicle, to ensure unimpeded passage to or through any country that has ratified the 1968 Vienna Convention.

The trailer registration scheme will come into force regardless of whether or not a Brexit deal is secured, and will apply to commercial trailers with a gross weight over 750kg, and all trailers with gross weight over 3,500kg. Trailers should be registered and equipped with plates by 28 March next year.

The RHA said it was “astounded” by the suggestion that hauliers should consider alternative modes of transport to shift goods in the event of no-deal.

“Goods are moved by road because of speed and efficiency – the UK relies on its incredibly efficient supply chain for consumers and businesses to get the things they need,” said RHA chief executive Richard Burnett.

Forcing hauliers to use alternative transport modes to move goods “would very quickly put the manufacturing sector under severe pressure and the hauliers they rely on out of business,” he said – adding: “It’s essential that if there’s a ‘no deal’ it is accompanied with the already agreed implementation period to give businesses a chance to avoid chaos in the supply chain.”

The association pointed out that the UK government had not said it would require EU hauliers to apply for ECMT permits to enter the UK, adding that it would be “unacceptable” if permit requirements were not reciprocal. It also raised concern at the lack of clarity over plans for freight movement between the UK and Ireland – the border question remaining among the key sticking points as Brexit negotiations enter the final stretch.

The full DfT guidance on the ‘no-deal’ implications for commercial road haulage can be found here.

The department has also released guidance for bus and coach operators operating services abroad after a no-deal Brexit, available here.

1 comment

  1. Steve says:

    Oh dear so all those hauliers will have either invest in training drivers or pay better wages to get the best drivers, given how much is spent on micromanaging drivers maybe rewarding instead of beating would benefit both, as for the government if the EU insists we get idp to go to Europe then so should all the foreign companies coming in, or better still get UK hauliers to pull the trailers from the docks creating more jobs for Brits.

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