Significantly increased customs checks at UK ports are likely to impact on supply chains and drive up demand for more warehousing in a market that’s already close to full capacity. However, with the restrictions of EU legislation lifted, there’s a new opportunity to bring forward radical solutions, says the UK Warehousing Association’s CEO, Peter Ward
Take control of legislation and let inland depots take the post-Brexit strain
The government has confirmed plans to introduce import controls on EU goods at the UK’s borders after the Brexit transition period ends on 31 December 2020.
Speaking at a recent Border Delivery Group event attended by UKWA, the Chancellor of the Duchy of Lancaster, Rt Hon Michael Gove MP, also made it clear that the policy easements put in place to mitigate the risks of a ‘No Deal’ scenario are no longer on the table.
As soon as January next year this will require traders and their intermediaries to submit customs declarations and be liable to checks on various products that enter and leave the UK.
The UK Warehousing Association (UKWA) estimates that this will equate to more than 200 million additional UK customs declarations. This scenario is far from ‘frictionless’ and there seems little doubt that the changes to the way we trade with the EU is going to have a significant impact on most supply chains.
There will certainly be interruption of flow, which, to maintain equivalent lead times, is likely to be mitigated by companies holding additional inventory and, accordingly, demanding additional warehousing space. This is happening at a time when the market is almost at capacity as the industry recalibrates to accommodate the massive shift from high street retailing to online and ecommerce fulfilment.
While Britain is, in effect, gearing up for a ‘Hard Brexit’, UKWA welcomes government plans to open new Freeports across the UK – inland as well as adjacent to ports.
The issues around new build warehousing are well documented, not least the time that it takes for real estate to come out of the ground, so while we’re fully aware of the challenges the new worldview will bring, we can also recognise the potential opportunities for our members and for the wider logistics community.
UKWA is calling on association members and non-members alike, 3PLs, retailers as well as real estate developers and industrial agents to join with us to develop an imaginative, coherent response to the Government’s proposals.
We believe many companies with existing facilities and operations stand ready to meet the new challenge; for example, those already involved with food distribution could, if given the necessary policy framework, adapt to provide inland inspection depots.
While land use and planning changes are most certainly required to allow for more warehousing nearer point of consumption, this is a longer-term strategy. Right now, we need to respond urgently to the spike in demand for warehousing services that inevitably lies ahead.
Bottlenecks at Ports seem inevitable as UK businesses grapple with the process, systems and documentation they will need to move their goods to and from the Euro zone; whilst both public and private sectors face the challenge of recruiting additional staff – knowledgeable and trained customs administrators within the logistics sector, and for HMRC and Border Force the increased workforce that will be needed to police the new customs formalities.
With demand for storage space set to rise, it is more important than ever that policy makers, both nationally and locally, acknowledge the importance of the logistics industry and take onboard the need for well-located, high quality warehousing and distribution facilities close to populations, reviewing land use, planning and infrastructure legislation to allow for the growth of the warehouse space that is required now and in the future.
UKWA has – and will continue to – work closely with the Government to ensure that the logistics sector can ‘level up’ and meet the challenges ahead. The Association urges members and all those with a stake in the logistics and supply chain industries to engage with UKWA as it seeks to shape the policies that will impact upon the way logistics companies, as the facilitators of trade, operate for many years to come.