Pinchbeck has its own customs border

 By Andrew Brookes at Spalding Today

A new border facility has been set up in Pinchbeck to allow some goods to be checked into the country when they reach South Holland.

Perishable Movements Limited (PML) has established a control point at the Freshlinc site in Wardentree Park to carry out customs checks and other official inspections.

It means that some plants and plant products can reach the area quicker from overseas – boosting their shelf life by 24-48 hours.

Freshlinc, in Wardentree Park, where there is a new border facility.

The UK Fresh Produce Network (ukFPN) – which brings together key businesses in the local economy – says the border facility is “in direct response to the congestion and disruptions currently experienced in transitioning consignments into Lincolnshire”.

It says the border post will bring a big economic benefit to south Lincolnshire – boosting businesses and jobs in the area – and revealed there are already plans to expand this further.

Angie Stuart, head of fresh produce at ukFPN Lincolnshire, said: “This is a fabulous, progressive move for Spalding and South Lincolnshire.

Freshlinc, in Wardentree Park, where there is a new border facility.

“We are working with the authorities to bring fresh produce, flowers and plants into the area using rail and sea, and the Border Control Posts (BCPs) create a vital link, squaring the circle, supporting local businesses and encouraging inward investment.

“The BCPs put Spalding and South Lincolnshire firmly on the map, it is the UK’s fresh produce heartland and the jewel in the Greater Lincolnshire demographic.

 “30% of UK food is transported through South Holland with 1,200 HGVs of food and fresh produce leaving South Holland every day.

Freshlinc, in Wardentree Park, where there is a new border facility.

“It is imperative that we support businesses and encourage growth by improving infrastructure and connectivity, providing a slick supply route.”
ukFPN Lincolnshire is also working closely with Boston College and the National Centre for Food Manufacturing in Holbeach to help train existing and future workers in the industry.
Mrs Stuart added: “The future in south Lincolnshire is extremely exciting and the BCP plays an integral part in our growth initiative.”
Freshlinc has set up Floralinc – new trading division that works with growers in the UK and Netherlands to supply garden centres, nurseries and retailers.
It hopes to add a specialist horticulture border facility to its site in July.
A spokesman for the Department for Environment, Food and Rural Affairs (Defra) insisted the new border facility – officially approved on February 15 – was not set up as a result of Brexit.
They said the posts exist in EU member states and come from EU legislation.

The Cost of Brexit on Fine Wine shipping

Despite the start of the Covid-19 pandemic, the transportation of wine to and from mainland Europe and the UK was pretty much a straightforward process in 2020. It required a minimum level of regulatory checks and procedures; haulage firms benefited from the EMCS system, an EU customs database that simplified the shipping process for them.

However, come 1st January 2021 and the changes to the UK/EU trade regulations, this straightforward process has been turned on its head. Philip Cox, owner of Romanian winery Cramele Recas, describes the new regulations as “nightmarish” and “potentially unworkable” for small wineries and UK businesses.

“It is fair to say that the new logistics framework has been a challenge for the industry. Even before Brexit, transporting wine was admin heavy. We required roughly 200 pages of documents to move an average shipment between the UK and EU,” explains Ashley Hopkins, Liv-ex director of operations. Adding “Since 1st January 2021 that admin has multiplied. The original 200 pages are still required, but now a similar sized export will require additional documents such as import declarations etc, resulting in around 800 pages.” 

“It’s not just the paperwork that’s the problem. In order to produce these documents you need certain wine expertise, and you also need to include additional parties such as freight forwarders, all of which adds time and costs to the supply chain.” adds Hopkins.

European wine producers, importers and exporters and major transport firms are all attempting to get their head around this new process. The transportation of goods to and from the UK has become much more time consuming, expensive and difficult. A good example of this is from 1st  January 2021, producers have been forced to ship goods in fumigated and treated stamped wooden pallets, which before 1st January 2021 wasn’t a legal requirement. 

In addition, logistics firms must now use ‘Economic Operators Registration and Identification (EORI) Numbers’. EORI numbers are issued by customs to identify traders throughout the EU and are now an essential legal requirement for UK import and exports. Also, under new VAT rules, the tax is now paid in full at the port of entry to the UK before the goods are released. This is a potential issue for smaller businesses.

“The new post-Brexit trading framework has impacted iDealwine in areas that they didn’t see coming. The additional paperwork was expected, but negotiating new rates and new shipping partners were not,” says Alix Rodarie, head of international development at iDealwine.

“New laws and even seeking advice from legal experts was expected, but legal experts unable to clarify or interpret a number of issues relating to importing wine to the UK was not. Customs declarations and duties payable were expected, but the complexity and number of charges for delivering were not.” Rodarie explains that the firm has been forced to build new logistical and legal relationships again from scratch, and then communicate these changes to their existing clients.

“As I’ve said before, it is now easier for me to sell to Japan than the UK,” adds Philip Cox. “Apart from the expense and time wasting inherent to carrying out a full customs declaration, I now have to include an importer’s label on every bottle, detailing their address, etc. I exported 4 million bottles to the UK in 2019 across 12 different brands. So I would have to produce 12 different versions of the label for each wine. Unfortunately, I’ve ceased exporting to my smaller customers. The new administration costs mean that shipping small volumes is not worth my while. The real victim has been the British consumer.”

With supply chain overheads increasing, producers and importers alike must now weigh up how much of this strain can be willingly shared between the key parties, or if UK consumers should be forced to shoulder the burden of the rising prices.

Some experts are optimistic that the end consumer will not suffer unduly. But equally, there is an opinion across the board that smaller brands may now find exporting prohibitively expensive, leading to fewer niche labels on our shelves.

“Our shipping charges have been altered. We used to be charged per case, which meant that we could ship tiny parcels from some growers. We are now charged per pallet and have a sliding economy of scale – this puts our smallest suppliers at a real disadvantage,” says Siobhán Astbury, buying director at Haynes Hanson & Clark.

“There are certainly some wines that have had to go up by a few pounds per case, but for the moment nothing extreme. We’re getting a slightly better exchange rate now than we were at the end of last year, which also helps cancel things out. But it’s still very early days.”

As with Covid-19, uncertainty surrounds the transition into new trading relationships. At the moment, UK customs are overlooking certain checks on goods to ease companies through the transition period. However, when this gentle approach finishes, its forecast that companies should expect long and costly delays at UK customs and excise. 

Both European and UK businesses are also arguing against the introduction of wine import certificates. This new piece of legislation was written into the Brexit deal to replace the VI-1 forms, which the EU currently use to regulate the import of non-European wines.

“As an industry we are used to VI-1 forms for wines originating outside of Europe and this will remain business as usual (albeit a UK version). One of the sections on the new import certificate form requires a customs stamp, which is likely to add an additional 200 pages and 200 stamps – it’s all getting a bit daft,” says Ashley Hopkins, Liv-ex director of operations. In late March, the government delayed the introduction of the wine import certificates until 1st January 2022. Nevertheless, WSTA chief executive Miles Beale, who has been heavily involved in lobbying the government to remove the regulation from UK law has stated that the threat of an eventual implementation of the forms is still “very real.” It remains to be seen whether they will listen to the argument against this extra step or not.

European ports preparing for the after effects of Suez crisis

In the weeks to come supply chains are preparing for the knock on effects of the Suez Canal blockage with expectations of congestion, delays and increased costs. 

The Institute of Export and International Trade has raised concerns over import surges that are expected to hit European ports following the removal of the Ever Given ship that has been blocking the Suez Canal.

The wedged ship Ever Given was finally freed on 29th March, leaving a trail of around 100 container ships waiting to enter the canal. Although some of those cargo ships would have been empty or headed to other destinations, roughly 52% of the canal capacity each week heads to Europe according to the Institute of Export and International Trade. 

Eleanor Hadland, senior ports analyst at maritime research consultancy Drewry has stated “From our perspective, it is going to be more chaos and more congestion.” The situation is badly affecting the US west coast where a lack of capacity means ships have to anchor for up to two weeks before unloading and In Europe, carriers are being given the option of diverting course to smaller, less busy terminals, Hadland said. 

The International Federation of Freight Forwarders Associations have said that the disruption of the supply chain was expected to “worsen dramatically” over the next coming weeks. They have also stated that this would create “high delays in shipments, increased costs and product shortages.”

Freight and logistics publication Loadstar has reported that currently air freight is currently operating at full capacity, predicting that it will take approximately two weeks for the impact of the crisis to begin to “unravel”. 

“Capacity is already an issue with greater use of air for test kits and vaccines”, said Ekaterina Andreeva, commercial director for Russian air cargo carrier Volga-Dnepr. “We can predict a busy market for a couple of months, but maybe it will lessen over the summer. Rates though could be elevated until the end of the year,” she said.

As the world looks to the cost of the Ever Given blockage, John Neal the CEO of Lloyd’s of London told the Evening Standard that potential losses to the market from the blockage of the Suez Canal would be in the “hundreds of millions” but said that the claims were easier to deal with than they are having to with Covid, which up to this point has cost Lloyd’s £6.2 billion in payouts. 

“It is the very type of loss we are used to,” John Neal said. “It will be quite a big marine claim, but not particularly out of the ordinary.”