Freight Firms Reject 1-in-5 Cargos Shipped From France to U.K.

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Freight companies are rejecting one in five contracts to take goods from France to the U.K. as border rules put in place after Brexit added to delays in moving goods across the English Channel.

The rejection rate, showing how many companies pulled out of long-term delivery contracts to move goods, was 158% higher last week than its average during the third quarter, according to data from global logistics platform Transporeon. The reading was marginally lower than the week before.

Freight Firms Reject 1-in-5 Cargos Shipped From France to U.K.

“Very high” rejection rates also on the return journey to France and Germany reflected “unprepared shippers, maxed-out bank guarantees for transit documents, and carriers preferring to go back to the continent empty,” Transporeon Chief Executive Officer Stephan Sieber said.

The U.K. left the European Union’s single market on Dec. 31. After that date, truckers were required to fill out customs forms and undergo checks at the border. Many have given up the hassle by charging more to cover the costs of returning with nothing.

Those frictions are driving up the cost of shipping. The France-Britain spot rate-- for journeys booked at short notice -- climbed last week and exceeded levels recorded right before the end of the year when companies were stockpiling inventories in anticipation of Brexit. Rates now are about 50% above the third-quarter average for a sixth week.

Haulage companies have warned this stickiness is evidence that higher shipping fees are a permanent consequence of the administrative burdens of Brexit.

While demand to transport loads from France to Britain is slowly recovering after the New Year lull, volumes were still 38% lower than in January last year, according to real-time data from Sixfold, a unit of Transporeon. Many firms are bypassing the U.K. by taking direct routes to Europe, such as the one launched Monday between Dublin and Amsterdam.

“It makes no commercial sense to pay crazy-high costs to deliver and double import duty, both here and on entry into the EU,” said Ben Moore, managing director of Sealite (UK) Ltd., a lighting manufacturer. “I am now shipping direct, and also totally bypassing the U.K., which will inevitably mean redundancies.”

A Cabinet Office spokesman said, “These goods will not be taxed twice, and we will issue new guidance clarifying the position to ensure any remaining issues are addressed.”

©2021 Bloomberg L.P.

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