U.K. companies are turning to cheaper overseas labor to complete their post-Brexit customs paperwork, creating jobs in countries such as Romania and India due to a shortage of trained staff in Britain.
Anticipating a surge in demand for its services, Xpediator Plc, which handles freight flows for international companies, has been hiring workers in Romania. Dave Gladen, the firm’s group marketing manager, says the country has a deep pool of expertise in the EU’s customs rules because it only joined the bloc in 2007.
“It’s allowed us to get some great expertise, and obviously there’s a lower cost,” Gladen said in a telephone interview. “Salaries for customs clearance representatives in the U.K. have just escalated crazily.”
Britain’s logistics industry is having to find creative ways to be ready for a wave of bureaucracy that will hit on Jan 1., when commerce between the U.K. and its largest trading partner will be subject to new paperwork even if the two sides reach a free-trade agreement. Hundreds of millions of extra customs declarations will be required on goods crossing the border annually, at an estimated cost of 13 billion pounds ($17 billion).
Metro Shipping Ltd., which moves goods for some of Britain’s largest retailers and automotive companies, has taken on 17 extra staff in Chennai, India in recent weeks specifically to handle Brexit-related work. The Birmingham, England-based firm expects it will have to handle an extra 120,000 customs declarations annually.
“There’s nowhere near enough skill-set here to cover it,” said Grant Liddell, business development director at Metro, which stopped taking on new clients for Brexit in August because it was at capacity. “We have really geared up,” he said, noting he could hire six or seven staff in India for the price of one employee in the U.K.
For the government, a shortage of customs agents is one of the biggest threats that could disrupt trade with the EU after the end of the Brexit transition period. If companies don’t have the right paperwork, goods risk being held up at the border, potentially causing traffic chaos. Alternatively, businesses may decide not to trade with the EU at all if they cannot file the appropriate documents.
Officials are trying to mitigate the problem by offering grants to businesses to train customs staff, though success has been limited: of the 84 million pounds made available, less than a third had been paid out as of Oct. 16, according to the National Audit Office.
The Road Haulage Association, a lobby group, has estimated that the U.K. needs an extra 50,000 customs agents to cope with the added Brexit workload. The government has repeatedly declined to put a figure on how many have been trained.
Source: Bloombergs/Joe Mayes
The LoadStar writes in an article that, European ports and the operator of the Channel Tunnel say they are increasingly concerned about the efforts of government and the wider supply chain to prepare for Brexit.
This is my experiebce as well having met with all ports, terminals and the involved operators. The LoadStar writes further more:
Manager of external affairs at the port of Rotterdam Mark Djik told a UK parliamentary select committee that, while he was confident the Dutch gateway would be ready for the end of the Brexit transition next month, he was concerned by the efforts further down the supply chain.
“We are ready, but you cannot be ready alone, and if you look at the whole supply chain – producers and manufacturers – we need to know they are,” said Mr Djik.
“If you want the supply chain to work, it is not simply enough for the ports and the customs authorities to be ready, there needs to be awareness further along the supply chain that the impact will not only be felt by those directly affected. I think we need to increase the level of awareness.”
Chief executive of the port of Calais Jean-Marc Puissesseau echoed Mr Djik’s comments, adding that the French port had begun preparations two years ago and was now ready – and he said he expected hauliers also to be prepared.
“They may not be ready with the first shipment, but the difficulty experienced will ensure they are ready second time around,” he said.
Concerns also continue to mount over the state of UK border systems, the Goods Vehicle Movement Service (GVMS) still in development, with full-scale testing now not expected until mid-December.
Director of public affairs for Getlink, formerly Eurotunnel Group, John Keefe said the delay in getting the system out was causing a “degree of concern”.
“We have only ever been a single-destination operator, which means we have known from the start that we had to develop and implement infrastructure to handle the changes associated with Brexit,” said Mr Keefe.
“Come 1 January, we’re confident these elements, the ones we were responsible for, will work perfectly, but we’re concerned that government systems are still in development.”
There are still concern on Government systems on the UK side, even though my contagts still days that the key system functions will be ready in time.
It is more worrying with the private sector. I have met many large multinationals, even in the most advance supply chains, that struggle.
The preparations done, sometimes together with well established consulting companies, are now strarting to show weaknesses in relation to customs and border elements – since in many cases the established customs expert companies and the experienced intermediary industry habe not been involved.
Many companies have used their traditional consultants, which simply don’t have the detailed deep knowledge and experience about these areas. When large companies now ger signs that their preparations and plans don’t hold for the test, a call to the established industry often results in the answer, ”we are out of resource and capacity right now, come back in April”.
There are ways around it but there are very few expert companies in the market that can manage that.
On top of thiswe have the many companies that have not prepared at all yet. UK Government eatimated the number recently to be as much as 65-70%.
This is the big challenge, are supply chains ready? The answer right now is no, could more be done to January 1st? The answer is yes.
Environment Secretary George Eustice told the BBC’s Andrew Marr “agreement exists” between the two sides.
But earlier, he told Sky News there was still “some way between us” and “time is very, very short” to agree a deal.
Irish Foreign Minister Simon Coveney said talks have “got to make big progress” in the coming week.
He told Sky’s Sophy Ridge getting a trade agreement was “difficult but also very doable”, and the consequences of failing to would be “significant”.
The talks between the UK and EU are due to resume on Monday in Brussels.
The UK’s chief negotiator, Lord David Frost, has arrived in the city, tweeting that there had been “some progress in a positive direction in recent days”.
But he said “significant elements” of the deal are yet to be agreed, adding: “We may not succeed.”
Any deal between the UK and EU would need to be ratified by parliaments on both sides, so time is running out for an agreement to be reached and to get the sign off before 31 December.
You can read the article here: Brexit: Trade deal sticking points ‘can be resolved’, says UK minister
Source: BNC News