Life after Brexit in Northern Ireland – The real impact one month after!

There has been widespread coverage in both the local and national media on the impact of the UK leaving the EU on life and business in NI. Whilst the UK left the EU Northern Ireland finds itself in essence remaining in the EU single market and Customs Union for provisions contained within the NI/IE Protocol. 

The Protocol and Michael Gove’s Command paper provide a framework for NI given its unique position with an internal land border on the Island of Ireland and considering it remains part of the UK.

The framework reflects some key requirements to ensure the needs of NI people are protected, NI will remain in the UK Customs territory and it avoids disruption to the lives and livelihoods of people in NI. It also must be delivered in a flexible and proportionate way by both protecting the interests of the UK and the EU and to ensure GB to NI trade flows can flow as smoothly as possible.

We have always maintained our views are evidence based and are about Logistics and the Economy not about politics and that remains our position.

Setting aside the concerns raised before the end of transition period including the lack of clarity and time to prepare and the systems and processes not fully developed, or stress tested. 

This coupled to the Government not appearing to understand how modern day logistics operates in a just in time, every time and a highly efficient manner works in 2021 has resulted in the position we now find ourselves in. We believe the evidence is sufficient to prove these concerns were well founded, however, let us look at the “here and now”!

It’s accepted between 70% and 80% of NI trade is with GB including extremely successful agri -food and manufacturing sectors. The majority of these products are transported to the GB marketplace via trucks either direct or via Ireland with virtually 100% return load capacity being achieved. 

To bring product from GB into NI traders and hauliers are required to comply with numerous new procedures that are designed to restrict market access to NI as opposed to ensuring it operates smoothly and efficiently. Due to the nature of the GB to NI supply chain and the relatively small market of 1.8 million people (Smaller than greater Manchester) groupage (multi product) loads are the norm requiring numerous individual documents or entries for each product. 

These additional requirements include:

  • Export Declarations
  • Export Health Certificates (Government are covering this cost for a VET to issue this an initial period of 6 months)
  • Fish Catch details
  • Rules of origin information,
  • Goods Vehicle Movement entries resulting in a Goods Vehicle reference for permission to board a ferry
  • Registration with the Trader Support Service (Free to use service for an initial period of 2 years)
  • Population of the Trader Support Service database with product details
  • Checks before boarding the ferry in GB
  • Border Control checks when disembarking the ferry in Ireland or Northern Ireland.
  • Transit arrangements for NI <> EU VIA GB or NI <> GB via Ireland, with last minute facilitation not permitted.

The additional processes/restrictions are apparently designed to protect humans, animals and plants within Northern Ireland and the EU. However, Government officials have confirmed they have not detected or expect to detect any diseases, pests, or contaminants. 

The question must be asked are these checks proportionate to the risks, has a risk assessment been undertaken or is it just bureaucracy designed to obstruct the movement of agri/food! 

We have been advised product emanating from the EU has been risk assessed by the UK and it has been concluded this is free to move as there is no risk, yet when EU product arrives in GB for processing/packaging and onward transporting to NI it must be subject to all the relevant checks before the same product re-enters the EU. How has the risk increased if it’s the same product!

Richard Ramsey, the leading Economist for a well-known Northern Ireland Bank, recently published his Ulster economixpod cast titled “trucking hell” which sets out his expert independent assessment of the potential impact on NI! https://ulstereconomix.com/2021/01/29/january-2021-podcast-episode-4-trucking-hell/

Impact  

The following are some examples of the impact of the new requirements:

  • GB suppliers discontinuing to supply the NI market due to insufficient margins, increased bureaucracy, insufficient knowledge of the new processes, market insignificant or better returns from internal GB customer base.
  • Increased delays with day 1 for day 2/3 delivery now day 1 for day 5/6 delivery on some products,
  • Disruption to well established and finely balanced supply chains with loads of NI product being delivered to GB but insufficient loads to satisfy capacity for return journeys.
  • It is either impractical or impossible to now undertake haulage GB<>IE<>NI due to transit constraints.
  • Significant increase in cost base through:
  • Reduction in overall journey financial return with loss of revenue for return loads.
  • Increase in delays at collection points, ferry terminals and border control posts some of which are up to 7 or 8 days.
  • Increased administration cost due to additional back office paperwork and data upload onto TSS database.
  • Anticipated additional costs when the TSS database is no longer free to use (Anticipated Jan 2023)
  • Additional cost for completion of Export Health Certificates after the Government funded scheme ends (Anticipated July 2021)
  • Increased costs will have to be passed on to suppliers, manufactures and consumers resulting in an increase in base cost for NI PLC and impacting on out competitive with loss of market share.
  • Insufficient number of VETS to meet demand for Export Health Certificates even with the current reduced volumes. This will be exacerbated if trade flows increase.
  • Insufficient capacity within the Customs brokerages to meet reduced demand. This will be exacerbated if trade flows increase.

Solutions

To ensure a solution is designed taking cognizance of the NI/IE Protocol the EU and UK government must first clarify what they are attempting to achieve, why and what evidence are they using to support this objective. 

It’s not sufficient to indicate it’s what the regulations say – NI is in a unique position and needs bespoke unique solutions not one that is designed to exclude non-EU produce with rigid application and enforcement. 

The solution must be framed around the principles contained with the Protocol, they must be risk based and not designed as market protection given that NI remains part of the UK.

Considering between 20% and 30% of NI trade with GB transits via Ireland an electronic solution must be developed to facilitate a transport corridor via this route without the need for transit provisions and 24 hours notice.

All solutions must be developed under the overarching principles contained within the NI/IE Protocol to ensure NI is not disadvantaged and can prosper as a small island economy going forward.