HARBOUR FROM BREXIT STORM
EVER SINCE Theresa May announced in January that Britain would be leaving the Single Market and the Customs Union as part of the nation’s departure from the European Union, there has been growing alarm at the prospect of lorry queues stretching for miles at the nation’s busiest port in Dover with major knock-on effects for the nation’s economy as deliveries struggle to get in and out of the country.
But while many in Kent are contemplating the increasinglyimminent arrival of Brexit with growing unease – particularly given the slow progress of negotiations which are yet to even start discussing future trade arrangements – there is cautious optimism in Humberside that it offers a unique opportunity for the region in the long-term.
Dover currently handles around 30 per cent of the UK’s trade with the EU. The extent of the nation’s reliance on Dover is such that a series of delays in 2015 caused by Operation Stack – in which stretches of the M20 were used to park lorries bound for Dover or the Channel Tunnel due to issues like migrant action in Calais or bad weather disrupting ferry services – cost the economy an estimated £250m per day.
In March this year, Port of Dover chief executive Tim Waggott warned the failure to agree new rules on the currently frictionless movement of goods between the UK and the EU could result in the type of delays caused by Operation Stack happening “every day of the year, in perpetuity”. However, for those at the rival Port of Hull there is some hope that Brexit offers the chance to rebalance the way the freight industry operates in this country.
The four Humber ports run by Associated British Ports (ABP) in Hull, Goole, Grimsby and Immingham already handle over 65 million tonnes of cargo every year. But David Leighton, head of corporate affairs at ABP, says there is now an opportunity for even greater use to be made of the region’s ports. While a lack of space at Dover means there is little room to expand its facilities to deal with the likely increase in customs bureaucracy, the Port of Hull has large areas of development land surrounding it.
“There has been considerable anxiety about disruption to trade through the Port of Dover if additional customs checks are introduced as a consequence of leaving the Customs Union,” Leighton says. “However, a number of ports on the east coast are capable of offering customers robust and efficient alternatives for EU trade. These include ports on the Humber, which already serves as the Northern Powerhouse’s gateway to Europe.”
A policy paper published by ABP earlier this year said that in comparison with Dover, “crucially, many east coast ports have the space needed to accommodate additional customs checks if required”. Leighton says ABP met extensively with senior Government ministers and officials to prepare for a full range of potential Brexit outcomes, including what would happen in a ‘no deal’ scenario.
But whatever happens, one thing ABP is pushing for is the creation of so-called ‘Free Ports’, which are considered to be outside the country for customs purposes and thereby allow goods to pass through without incurring the usual tariffs, in the UK. It follows a report by Yorkshire MP Rishi Sunak last year, who suggested establishing Free Ports would have the potential to create hundreds of thousands of new jobs.
Leighton says: “Rishi Sunak’s report points to the huge potential of Free Ports to attract investment in new world-leading manufacturing, helping to boost exports and re-balance the economy. The Port of Hull has large areas of development land close to deep water, ideal for the import of raw materials or components and export of finished products. A Free Ports policy could super-charge the prospects for regeneration and growth in Hull and across the Northern Powerhouse.”
Research is already under way on attracting more freight traffic to the north. The Logistics and Humber Development Institute at the University of Hull is currently involved in two projects designed to make a difference; the first called Capitals which is being trialled in the Humber and Liverpool and is designed to tackle congestion and delays around ports.
The second is the Liverpool Humber Optimisation of Freight Transport project, which is working with major companies, rail freight firms and key port operators along the M62 corridor in a bid to increase the use of northern ports.
Professor Amar Ramudhin, director of the institute, says around half the cargo going through Dover currently is for businesses based to the north of Milton Keynes. “The biggest problem with freight in this country is it is unbalanced. A lot is travelling up the M1 and going into the Liverpool/Hull corridor. The best case scenario would be that the UK takes this exercise of Brexit and really makes some profound changes in freight movement so we don’t get bottlenecks in one place or another. Brexit could be used as an opportunity to finally change the way things are done.”
But Ramudhin says there are clear concerns about the considerable length of time it will take to establish a new customs system and it is vital there is an adequate transition phase to allow time for the new regulations to come into operation. “The longer you wait, the bigger problem it is. Two years is about the length of time it takes if you have a vendor in place who can come in and implement the system. But today we don’t know what processes will be in place and then we need to create the systems to cope with the new processes and volumes. It is not a simple task.”
Despite those caveats, Ramudhin says he is “cautiously optimistic” about the future. “I think this could be the greatest opportunity for the UK if we get this right. There are some very bright people in the UK and we have a long tradition of maritime and import/ export. If we do it right and think about all the aspects of it and come up with a good system, that will eventually reap the rewards.”
Another organisation trying to get to grips with the huge implications of leaving the EU is the Freight Transport Association, which represents half of the UK’s fleet of good vehicles. James Hookam, deputy chief executive of the FTA, says businesses urgently need more clarity about trade and transport arrangements post-Brexit, with a wellplanned transition period vital.
It is estimated that an additional 300 million customs declarations will need to be made in the UK each year, compared to the current 90 million. Hookam says: “The scale of this is truly enormous.”
But he does believe with the right arrangements in place, Brexit could offer a big opportunity for ports like Hull. However, with the Brexit deadline looming ever closer, whatever the longterm prospects for ports like Hull, the initial aim for those involved in the freight industry is rather more modest. As Hookam puts it, “We just want to keep Britain trading.”