Thursday 4 June 2020

Brief reprieve for hauliers as Brexit transition kicks in

While the UK has now officially left the European Union, the terms of the withdrawal agreement mean that little should change immediately for fleet operators, as the transition or ‘implementation’ period begins.

Arrangements around community licences, driving licences and CPC will continue to operate in 2020 as if the UK were still a member of the trading bloc, the Road Haulage Association (RHA) has advised; and there will be no customs formalities for EU/UK trade or any need to use ECMT permits in order to transit to third countries via the EU this year – while operators will continue to be able to employ EU staff as they do now.

However, attention will now refocus on 31 December, the end of the transition period, prior to which the detail of the UK’s future trade relationship with the EU will be hammered out. While it is possible for the transition period to be extended should both parties agree, the prime minister Boris Johnson has ruled this out. In the meantime, transport trade groups continue to emphasise the need to prioritise easy access for road haulage between the UK and EU after the transition.

The RHA has proposed a market access agreement which it says would allow hauliers to continue to travel to, through and from the EU without having to apply for permits once the transition ends, with reciprocal rights for EU-based hauliers.

Chief executive Richard Burnett has written to the prime minister urging negotiators to seek “clear and practical rules around the operation of lorries undertaking international transport”, to avoid “significant disruption across major parts of both UK and EU economies”.

He also expressed concern that officials from HM Revenue & Customs (HMRC) had failed to commit to a deadline to provide a promised operating model for customs processes, adding that businesses required immediate clarity to enable them to become ‘border-ready’ in time for 1 January 2021.

“We need HMRC to clearly define the process so that we can understand how many customs agents will be required to support traders and hauliers,” he remarked.

Burnett warned that there could be a major shortfall of trained agents after transition, since the costs of employing new staff without a revenue stream until 2021 would be ‘impossible’ for many companies. He said that the the £7 million earmarked by the Border Delivery Group to suppor upscaling of customs agents was “nowhere near enough”.

Responding in January to the news that the EU withdrawal agreement had passed through Parliament and received royal assent, Freight Transport Association (FTA) policy director Elizabeth de Jong said: “This will provide businesses with greater clarity on short-term UK-EU trade arrangements, [but] ratification of the deal is only the start of the process…

“FTA has already been in contact with the new administration with a list of vital questions that urgently need answering, so that the planning and testing of new trade procedures can begin. “These cover issues including the exact processes and types of formalities required for goods moving across the borders, and the new systems, accreditations and training needed to make this happen successfully.

“While changes in the way borders operate and export and import formalities are to be expected, FTA is calling on the government to prioritise the smooth flow of goods and seek to minimise frictions, red tape and costs logistics companies may face under a new agreement.”

She continued: “Whilst discussions regarding the UK’s future trading relationship with the EU have been happening since the referendum in 2016, there has not been sufficient detail released for the logistics industry to prepare.

“FTA is asking the government to include logistics in every step of the way – from the definition of the negotiating mandate to implementation of new rules – to ensure any new trade and transport arrangements will work in practice.”

FTA head of skills policy Sally Gilson raised concerns over the government’s planned migration restrictions, asking Boris Johnson to: “urgently reconsider his proposal to impose arbitrary qualification and salary thresholds on EU migrants – which includes commercial drivers and warehouse operators.”

She added: “The logistics sector is facing a severe labour shortage: 59,000 HGV drivers alone are urgently needed just to keep operations afloat. And… the shortfall of warehouse staff [is] anticipated to worsen over the next 12 months…

“FTA is calling for the government to include logistics workers – particularly warehouse operators and HGV drivers – in its provision for ‘specific shortages’. However, this would only provide temporary relief and so permanent allowances are needed for this vital sector.”

Meanwhile John Martin, RHA policy manager for Northern Ireland, said Brexit could herald some big challenges for the province, and called on the devolved government to make the logistics sector a priority following the deal to restore political institutions at Stormont in January.

FTA said agreement on the Irish border situation, including the potential for checks and where/how these would be made, remained one of the key concerns for businesses across the sector.

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