Cross-Channel Brexit Cargo Rejections Hark Back to Dover Crisis

Freight firms are refusing to carry goods from France to the U.K. almost as often as during thepre-Christmas Dover crisis, high-frequency data show, illustrating additional costs from Brexit.

Therejection rate for cross-Channel cargo rose again last week to 168% of the third-quarter average. It had peaked for 2020 near the end of the year — when France shut its borders to U.K. hauliers for 48 hours to contain a new coronavirus strain — before falling over the holiday period.

The U.K. left the European Union’s single market on Dec. 31, which means that truckers now must fill out customs forms and undergo checks when traveling between Britain and France.

Authorities becoming stricter and firms bailing out of contracts to negotiate better rates on the spot market meant it surged back last week, said Stephan Sieber, chief executive of Transporeon, which tracks the figures.

DB Schenker, a major logistics company owned by German rail giant Deutsche Bahn AG, last week suspended deliveries to the U.K. due to “significant” problems caused by post-Brexit red tape.

“There’s some normal seasonality to this but the magnitude is higher than in previous years,” Sieber added. “Carriers operate on thin margins so they are increasing prices if they can to compensate for the additional effort and uncertainty.”

The France-Britainspot rate — charged for journeys booked at short notice — climbed last week, continuing to hover around 50% higher than the third-quarter average.Haulage groups have warned that more expensive shipping fees will be a permanent consequence of Brexit as new administrative costs are baked in.

Many firms avoided the Dover-Calais crossing immediately after the U.K. left the EU’s single market and customs union in case ofBrexit chaos. Now demand for freight transport is edging back toward normal levels as stockpiles dwindle. It was only 1% below the third-quarter average last week.

Still, transporters are increasingly going around the U.K. by taking direct routes from Ireland to Europe via Rosslare in the south-east of Ireland rather than using the so-called land bridge from Dublin, government officials said Monday.

Since the start of the year, cargo moving through Dublin port has fallen by about 50% compared to January 2020.

Read More: Brexit Ensnares Percy Pig as U.K.-EU Trade Headaches Multiply

“We expect volumes to increase, but we don’t know when to by how much,” Tom Talbot, an official with the Irish tax authority told reporters in Dublin. He said drivers should get used to increased checks. “This is the new normal.”

More than 1 billion euros of trade ($1.2 billion) usually goes between Ireland and the U.K. every week, with about 20% of Irish imports coming from its nearest neighbor.

A new direct route between Dublin and Amsterdam will launch Jan. 25, which Ireland’s minister for European affairs Thomas Byrne, said “allows our exporters and importers to bypasscustoms and other checks which were brought about by Brexit and provides greater reach into EU markets in northern Netherlands, Germany and beyond.”

Source: Read Full Article