These are the UK Government’s official measures in place to ensure cargo can fly to and from the EU without disruption from 1 January 2021.
Perishable Movements Limited clients can rest assured that our pre-chartered freight flights will ensure that a No Deal Brexit does not disrupt our supply chain. It also provides options for prospective customers who are looking to set up alternative measures to cope with long tailbacks on cross-Channel freight services.
Cargo from the EU to the UK
The UK intends to recognise EU cargo security rules to minimise disruption to air cargo networks. Airlines flying from airports in the EU, Switzerland, Norway, Iceland and Liechtenstein will be able to fly cargo to the UK in the same way as they do now.
Cargo from the UK to the EU
The EU intends to recognise the UK cargo security regime allowing cargo to continue to fly into the EU.
Cargo will be able to fly from the UK to the EU, Switzerland, Norway, Iceland and Liechtenstein without a security designation, in the same way as it does now.
Cargo from the rest of the world into the UK
Airlines from the rest of the world must have a special security designation to fly cargo into the EU and the UK as part of the ACC3 programme.
A UK only inbound cargo scheme will be set up to make sure security standards are not affected. This will mirror the EU scheme and grant security designations from 1 January 2021 to allow all cargo to continue to ship smoothly while maintaining existing security standards.
Regulations and standards
Existing aviation security regulations and procedures will be incorporated into UK law.
The EU intends to recognise the UK aviation security regime and include the UK in its One Stop Security system so that cargo screened in the UK will not have to undergo additional security checks on arrival in the EU.
There is no sign of any slow-down in the world of e-commerce, in fact quite the opposite. With so many consumers forced to adapt their shopping habits in response to the restrictions imposed as a result of Covid-19, it is likely that the changes that have been made will be long lasting.
While the world remains optimistic that the traditional retailers will be able to resume normal trading, the fact is that consumers will have become accustomed to revising their approach to purchasing and will be loathed to turn their back on the speedy digital shopping experience.
In response to this, more and more aircraft are being reconfigured to carry cargo, rather than passengers and there has been a spike in the number of aircraft retrofit businesses able to undertake these specialist works. Since the production of the Boeing 747 has stopped in favour of the more fuel efficient, newer 777, so interest in the procurement of 777s to lease or buy has increased and while some of these may already be converted for cargo, we are likely to see more of these passenger aircraft configured to accommodate the exclusive handling of cargo.
The world of e-commerce traditionally focuses on a high proportion of goods being transported out of China into major European hubs. As a result, there is likely to be a predicted growth in the number of chartered air freight services transferring consignments out of these hubs and delivering them to local European markets. This means that once again, the pressure for space will be intensified on these flights.
Given the world’s growing mandate to address the need to slow down climate change, it is also likely that the future will bring new break throughs in fuel efficient engines which represent an improved carbon emissions proposition. For companies who trade on their ‘green’ credentials, this will enable them to potentially reconsider the use of chartered aircraft, which will in turn create further demand for space.
Impact of Brexit
Brexit has effectively provided a massive boost to the chartered air freight industry. Companies which specialise in perishable goods cannot risk being caught up in cross-border delays, delays which can have a devastating impact on time-sensitive produce. UK supermarkets and independents demand quality fresh produce, with a good shelf life. Goods which have been kept in transit when they should have been on the shelves will have a reduced shelf life triggering substantial losses to the producer.
For Perishable Movements Limited, the speed of transit associated with chartered aircraft services, supported by the company’s ability to handle product with an unbroken cold chain thanks to its unique relationship with Heathrow’s only dedicated chilled airside facility, has dictated an even stronger interest in chartered air freight in the wake of Brexit. Such is the demand that Perishable Movements Limited, has seized the initiative to charter its own aircraft to ensure the seamless and timely transfer of fresh produce.
The impact of the global pandemic continues to be felt in all sectors of industry and the chartered air freight sector is certainly not exempt. As countries begin to prepare for massive vaccination programmes the priority for many airlines is to captialise on the opportunity to carry the vaccines and as a result the race for space on chartered flights continues to heat up.
Competition for space in turn brings with it spiraling prices. Not only are logistics companies having to contend with the traditional seasonal variation in prices due to the influx of electronic products to satisfy the Christmas market, now the charters are becoming even more expensive due to the potential to charge a premium price for the transportation of PPE and vaccines.
As the biggest independent perishable goods importer, Perishable Movements Limited continues to work hard to stay ahead of the curve. In addition to chartering its own twice-weekly flight from Nairobi to Heathrow, the company is watching the market to identify new opportunities to increase the number of flight rotations operated by Perishable Movements Limited and its partner network.
Having an in-house air charter service division, headed up by someone who has acted on both sides of the fence, working for an airline as well as an independent charter broker means that the company is well placed to access the very best air trade lanes. But as anyone in the logistics business will testify, these will be challenging times for the industry
Supermarkets have urged people not to stockpile food and lavatory rolls in response to fears that a no-deal Brexit would interrupt supplies.
The British Retail Consortium (BRC) said shops had been working to prevent shortages being caused by disruptions to cross-border trade. However, it said there could be an impact on supplies of some fresh fruit and vegetables because the UK relies heavily on imports from the EU in winter.
Helen Dickinson, BRC chief executive, said: “Retailers are doing everything they can to prepare for all eventualities on January 1 — increasing the stock of tins, toilet rolls and other longer-life products so there will be sufficient supply.
“While no amount of preparation by retailers can entirely prevent disruption there is no need for the public to buy more food than usual as the main impact will be on imported fresh produce, such as fresh fruit and vegetables, which cannot be stored for long periods by either retailers or consumers.”
Other industries have spent years making plans to cope with a no-deal Brexit scenario. Perishable Movements Limited is one of the UK’s few fresh produce importers to have implemented their Brexit-ready plans to ensure their customers continue with little disruption to their supply chain. Measures include a purpose built temperature controlled facility in Spalding, complete with its own Border Control Post and regular chartered flights from East Africa to their facility at Heathrow.
Over the weekend, many media outlets reported on the number of people stockpiling goods ahead of a no-deal Brexit. The government is trying to allay fears by preparing measures to protect farming and other vulnerable sectors and to try to ensure deliveries of perishable goods and vital supplies are maintained.
But is this action too little too late?
UK government on farming:
The government is planning to help sheep farmers who would be among the worst hit by a no-deal Brexit.
The UK exports 30-40 per cent of its lamb and 90 per cent of that goes to the EU. Without a deal, an average tariff of 48 per cent would be imposed on sheep meat. This would kill the export market and result in an oversupply in the UK, driving down prices and potentially making many sheep farms unviable.
A Whitehall source said the Department for Environment Food and Rural Affairs (Defra) was “looking at specific interventions which will help to mitigate impacts for sheep farmers”.
The source pointed out that farmers in the EU would also face hardship if tariffs were imposed. The UK purchased more than 80 per cent of Denmark’s total exports of bacon and ham, worth £100 million, in 2018.
The National Sheep Association said the two support measures being discussed with Defra were a payment per breeding ewe or a top-up payment for each lamb sold.
The UK government on fish imports:
Trucks carrying fresh and live seafood will be given priority, enabling them to bypass queues in Kent. Lorries carrying day-old produce will get the same priority.
About 80 per cent of crab, lobster and other shellfish landed at UK ports is exported to the EU and is highly perishable.
Barrie Deas, chief executive of the National Federation of Fishermen’s Organisations, said the UK relied mainly on Iceland and Norway for cod and other white fish and these supplies were unlikely to be disrupted.
He said tariffs were only about 8 per cent on unprocessed fish so British exports were likely to maintain their market share because of their good reputation.
The UK government on travel:
A combination of coronavirus restrictions and Brexit means there is now the “real possibility” that Britons will be barred from travelling to the EU once the transition period ends, industry figures warn. The UK will become a “third nation” — with European borders closed to the majority of such countries at present.
Individual states can overrule the EU and permit access to foreigners. However, an estimated 2.5 million Britons face being unable to travel because their passports will be invalid. From January 1 documents will be required to have at least six months’ validity at the time of entry.
Tailbacks are likely on the M20 approach to the Eurotunnel in Folkestone. French authorities have been testing new software at their checkpoint in Kent, which has already caused delays.
Under EU regulations passengers whose flights are delayed or cancelled are owed compensation of up to €600. The Department for Transport confirmed the rules will become enshrined in UK law at the end of the transition period.
The UK government on medical supplies:
Drug companies have been increasing stockpiles to reduce the risk of shortages. While there would be no tariffs on medicines, deliveries could be delayed by extra border checks. The government is arranging new routes into the UK, including rapid air freight for urgent supplies.
Perishable Movements Limited remain on hand to support the UK government with temperature controlled transport and storage of critical medical supplies ioncluding the Coronavirus vaccine.
As another one of our charter flights from Kenya touches down at Heathrow and the fresh product makes its swift journey to our temperature controlled warehouse just a stone’s throw away, we consider how BREXIT will affect others within our industry who rely on access via the UK’s sea ports to get their products to market.
Many businesses are warning of goods shortages as chaos builds up at UK ports ahead of the Brexit deadline. We’re watching the delays at ports getting worse as demand surges with firms seeking to build stockpiles. Fortunately, for Perishable Movements Limited clients’ it’s smooth sailing by air.
Britain and the European Union are seeking a post-Brexit trade deal, with failure likely to result in increased chaos in mutual trade, financial markets tumbling and huge economic costs.
UK businesses have raised the alarm over shortages and rising prices thanks to a surge in containers flowing through UK ports as the economy begins to recover and companies try to build up supplies ahead of the Brexit deadline.
Shipping costs have roughly quadrupled for some firms and delays at the UK’s largest port, Felixstowe, are causing vessels to miss out the stop altogether, unloading their goods at Rotterdam or other European ports instead.
The delays threaten to add to expected chaos as the Brexit transition period ends on 31 December with UK and EU negotiators still locked in talks over a deal.
Congestion has been building for several weeks and “is definitely getting worse”, said John Newcomb, chief executive of the Builders’ Merchants’ Federation.
“It’s spread from Felixstowe to other major ports.”
Retailers raised the alarm last month that they were struggling to import goods partly because of congestion caused by a backlog of 11,000 containers of PPE ordered by the government.
Mr Newcomb and other building industry figures raised the issue of port delays with government ministers a month ago.
“They were supportive but we haven’t seen any improvement, it’s gaining momentum,” he said.
He added: “The closer we get to Brexit day, any additional pressure put on the ports and affects the smooth flow of building materials, that’s a big concern for us – particularly if we don’t have a deal.”
Cheshire-based supplier Timco said 60 per cent of its shipped containers were being delayed by around two weeks after vessels chose not to stop at Felixstowe.
Timco director Simon Midwood said the firm has 160 containers waiting to be imported from Asian ports but there is currently no shipping space. Goods that have been shipped are between 3 and 17 per cent more expensive for customers due to a four-fold rise in shipping costs, Mr Midwood said.
Travis Perkins, one of the UK’s largest builders’ merchants, urged customers not to worry but to plan ahead in case of supply issues.
“The pressure on certain product lines is a combination of factors, such as manufacturing taking time to catch up post lockdown and pent up demand from customers, which is now picking up pace,” a spokesperson said.
“Congestion at UK container ports may be a compounding factor, but we have a strong supply chain that enables us to have a sophisticated sourcing strategy in place.”
If no deal is reached, the building trade faces tariffs of up to 10 per cent and further price increases if the pound falls against other currencies.
The UK produces about four fifths of building materials locally but products such as power tools are mostly imported. Other industries such as vehicle manufacturing are expected to be more severely impacted by port delays and rising costs.
The flow of trade out of the UK is expected to experience severe delays. The government’s reasonable worst-case scenario is for queues of 7,000 lorries in Kent. HMRC forecasts that, even with a deal, UK firms face an additional £7.5bn in administrative costs
Here are some of the potential pressure points of a failure to reach agreement on trade.
Investors and banks have long predicted a trade deal would be done, so a no-deal would hit the British pound, foreign exchange traders say.
But investor sentiment was hit by the sides saying on Saturday that there was still no agreement covering annual trade worth nearly $1 trillion, and sterling has fallen against the U.S. dollar since then.
The shock result of Britain’s referendum on leaving the EU in 2016 sent the pound down 8% against the dollar, its biggest one-day fall since the era of free-floating exchange rates began in the 1970s.
In the case of a “no deal” on trade , Britain would lose zero-tariff and zero-quota access to the European single market of 450 million consumers overnight.
Britain would default to World Trade Organization (WTO) terms in its trade with the 27-state bloc. It would impose its new UK global tariff (UKGT) on EU imports while the EU would impose its common external tariff on UK imports.
Non-tariff barriers could hinder trade, with prices widely expected to rise for British consumers and businesses
Borders risk disruption, especially the main crossing points, with experts saying shortages of certain foods are possible in Britain as it imports 60% of its fresh food, with disruptions in British lamb exports to the EU also possible.
Any disruption would be felt most keenly by sectors that rely on just-in-time supply chains, including autos, food and beverages. Other sectors likely to be affected would include textiles, pharmaceuticals, and chemical and petroleum products.
The EU is Britain’s biggest trading partner, accounting for 47% of its trade in 2019. It had a trade deficit of 79 billion pounds ($104.86 billion) with the EU, a surplus of 18 billion in services outweighed by a deficit of 97 billion pounds in goods.
Even with a deal, Britain expects thousands of trucks bound for EU countries to stack up in the southern English county of Kent, with delays of up to two days.
The long-term impact could be costly for both Britain and the 27 remaining EU member states.
A no-trade deal would wipe an extra 2% off British economic output in 2021 while driving up inflation, unemployment and public borrowing, Britain’s Office for Budget Responsibility (OBR) has forecast.
The OBR said tariffs under WTO rules and border disruptions would hit parts of the economy such as manufacturing that were emerging relatively unscathed from the COVID-19 pandemic.
According to economic research by insurer Allianz in November, a hard Brexit – a sharp, disorderly split – could cost the EU as much as 33 billion euros in annual exports, with Germany, the Netherlands and France hit the hardest.
The shock would be felt unevenly across continental Europe, with those likely to be hit worst including Ireland, the Netherlands, Denmark, France, Germany, Sweden, Portugal, Poland, the Czech Republic Cyprus, Malta and Hungary.
The Halle Institute for Economic Research has forecast that EU companies exporting to Britain could lose more than 700,000 jobs if no trade deal is agreed.
Hylke Vandenbussche, a professor at Belgium’s University of Leuven, said in a report last year that Belgium would be the worst affected EU member state relative to its size, especially its food sector, with the loss of 10,000 jobs.
The UK government revealed this week that it has established a border operations centre to monitor the flow of goods and travellers in and out of the country. It’s hoped that the facility will alleviate some of the anticipated border disruption that could last months as the country leaves the single market and customs union.
Regardless of whether there is a post-Brexit trade deal, french authorities will impose full EU customs and controlled goods checks on all goods arriving from Britain from January 1. Current legislation states that all produce must be inspected at its first port of call into the UK.
Ministers fear the checks could lead to queues on this side of the Channel, with the possibility of up to 7,000 lorries waiting for two days in tailbacks. It will also affect the shelf life and route to market of a significant amount of the UK’s fresh produce increasing wastage amounts and CO2 emissions.
These concerns are shared by some of the UK’s key players in the logistics, shipping and import/export industry.
Mike Parr is director of global fresh produce cargo specialists, Perishable Movements Limited (PML). His team has been importing fresh produce from outside of the UK since 2003 and reiterates the concerns raised by ministers.
“We’re so close to Brexit; it’s imperative that the government start addressing key questions if we are to ensure that our borders can cope with leaving the European Union.”
“Who will be running these facilities and where will they find and train the staff needed to deliver a service that meets the exacting standards of DEFRA inspectors and vets?”
Mike Parr’s comments reflect the wider industry atmospherics that query why the government has failed to call upon the expertise of commercial companies practiced in the day-to-day handling and processing of imported produce.
Earlier in November PML opened it’n new Border Control Post (BCP) in Spalding to streamline and fasttrack its process of importing fresh produce to the UK while future proofing against Brexit chaos for its customers.
“There are a number of purpose built handling facilities across the UK which the government should be using as inspection facilities to relieve the pressure on the UK’s ports. By failing to consult with industry experts, consumers and businesses that work with imported goods face a bleak start to 2021 which will affect national supply chains, transportation links and much more. This is not what the industry needs after a difficult year navigating Covid-19”, added Mike.
Labour’s shadow Cabinet Office minister Rachel Reeves said ministers were “once again” putting the “burden on businesses to prepare for the end of the transition period, when it has not explained what it is those businesses are getting ready for”.
She continued: “The government is rebadging a basic element of preparation but still can’t tell us how many customs agents are recruited or trained or whether crucial IT is ready.
“With glaring questions like these still unanswered, this government must do much more than just ‘demand action’ from UK businesses, already under huge pressure from the pandemic – and instead provide them with some much needed answers.”
PML, the global perishable cargo specialist is partnering
with transport and logistics company FreshLinc to operate an HMRC /
DEFRA approved Border Control Post (BCP) and ERT (bonded warehouse)
facility at Fresh Linc’s Spalding HQ, enabling a speedier movement of
product from the ports and extending shelf life by up to 48 hours.
The BCP which has been in development for the last four months, will be
effective from 1st January 2021 and represents a £400,000 investment.
This includes the creation of a purpose-built 10,000 sq ft warehouse with
the ability to store 330 pallets; dedicated inspection areas for customs
and DEFRA and the training of four new dedicated staff to run the 24-hour
The decision to set up a BCP away from the ports – Spalding is within
easy reach of both Dover and Southampton docks – is in direct response
to the ongoing delays and excessive queues which currently impede the
onward movement of freight. The imperative to take action is amplified
given the specialist and sensitive nature of PML’s cargo – the majority of
consignments require temperature-controlled conditions – and the
anticipated further disruptions likely to be caused post Brexit.
The long-standing and trusted working relationship between the two
companies has enabled a seamless journey from the inception of the idea
to create a dedicated BCP at FreshLinc’s 70,000 sq ft site, to completion
of all the works required to meet the demanding criteria as defined by
HMRC and DEFRA.
“This is a great opportunity for us to work with PML to maintain the continuation of the food supply chain especially against the backdrop of the uncertain times we are now facing as a result of the challenges posed by Brexit and the coronavirus. The BCP is a perfect example of two like-minded businesses coming together to provide an innovative solution to an industry problem.”
Lee Juniper, Operations Director at FreshLinc.
“This venture will enable us to move product much faster from the ports, cut down on wasted journeys and should ultimately deliver a minimum of 24-48 hours additional shelf life on all our customers’ products. Our priority is to guarantee the safe and timely transfer of goods, ensuring that there are no breaks in the cold chain. By creating a remote BCP, we are no longer constrained by the issues at the ports and PML is able to operate and manage its own facility.”
PML Sales Director, Nick Finbow.