Fifteen-Hour Brexit Wait Prompts Freight Firms to Avoid U.K.
(Bloomberg) -- Truckers are trying to avoid the U.K. as Brexit red tape keeps them waiting to get to the continent.
New weekly data highlight the additional costs companies face when trading between Britain and the European Union after U.K. left the single market on Dec. 31. While the two sides agreed not to impose tariffs on goods, so-called non-tariff barriers are nevertheless creating obstacles for business.
Freight firms are shunning the U.K., keeping rejection rates on contracts well above the third-quarter average last week, according to high-frequency data from Transporeon, the global logistics platform. This was at least partly because haulers are being put off by delays -- the median time truckers spent in lines at Ashford, southeast England, was about 15 hours.
The cost of sending freight between the U.K. to the European Union also remained abnormally high. Stephan Sieber, chief executive of Transporeon, said this underscored that rates were not following their usual seasonal dip in the first quarter of the year. The price of shipping cargo from France to Britain was still 42% above the third-quarter average last week.
Some firms are using air instead of sea freight to circumvent delays. Mark Briffa, chief executive of private aviation group Air Partner, said about half of business in its freight division was coming from moving goods that would normally travel by sea.
“While the main industries turning to air charter are energy, automotive, aerospace and marine, we are also seeing interest from some major U.K. retailers that want to minimize disruption to their supply chains,” he said.
As firms bypassed the U.K., freight volumes on direct services from Ireland to Europe increased 100% from last year, according to the Irish government, while trade volumes between the republic and the U.K. were only half those reported in January 2020.
The situation is likely to worsen as stockpiles dwindle. Data from the Office for National Statistics showed the value of imports from the EU rose sharply in November as firms prepared for the possibility of a no-deal outcome. The trend was also encouraged by a resurgence of coronavirus cases at the end of last year that forced ports in the English Channel to close temporarily.
The Road Haulage Association warned that trade flows are smaller than official data reflect because empty trailers are not counted by ferry and crossing providers.
Richard Burnett, chief executive of the trade group, estimated that loads to the EU had fallen as much as 68%. In a letter to Cabinet Minister Michael Gove, he asked for “a suitable compensation package.”
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