air freight

The Impact of COVID-19 on the Air Freight Industry

Due to the COVID-19 pandemic, air freight has been one of the hardest hit industries in logistics.

Lockdown restrictions and travel bans have caused chaos internationally with many flights being grounded. On a normal day, air freight is responsible for the transit of trillions of dollars’ worth of shipments every year. Flying is one of the fastest methods of transport and is considered ideal for low volume, high-value items. With the industry currently at its knees, it has heavily disrupted global supply chains and production cycles for multiple countries. Other sectors of aviation including commercial and private air travel have also taken major setbacks with many airlines having to resort to mass redundancies of their employees.

 

The Pre-Pandemic Air Freight Industry

Before COVID-19, much of the worlds air cargo was carried via passenger aircraft. This was transported in the aircraft hold and made up 40% of annual global cargo. New generation, wide bodied aircraft are equipped with a generous belly hold capacity and are ideal to carry large quantities of cargo. A Boeing 777 passenger aircraft is able to carry as much as 20 tonnes and was frequently used to transport many shipments. Unfortunately, with only 20% of the world’s air traffic in operation at the moment, this has been significantly impacted.

Although freighter aircraft continue to operate by cargo operators and freight forwarders, many of these aircraft are hub focused and are not able to access the same extensive route network as commercial aircraft which is proving restrictive and taking away much of the convenience air freight has always promised.

 

Making Up the Shortfall

To ensure essential cargo continues to be transported, airlines have been utilising their main passenger cabins. The load sheet must be worked out precisely to ensure the weight and balance of the aircraft is not affected and is secured into passenger chairs with netting. It was widely publicised that emergency PPE for frontline healthcare workers was transported from China in this way.

At least 20 airlines have offered their aircraft for global cargo missions including British Airways, Delta and Cathay Pacific. The aircraft are chartered by freight forwarders and operated by the airline’s crew.

 

Low Fuel Prices Making up for Low Occupancy

Low fuel prices have eased the expense of low occupancy flights. This has been a saving grace to many airlines which has enabled them to continue flying to destinations they would otherwise have had to cancel. Aircraft manufacturers, Boeing and Airbus have also offered their freighter aircraft to transport critical supplies including 1.5 million facemasks.

Despite these creative solutions and work arounds, the industry is experiencing a major shortfall in the capacity it is able to transport and is majorly disrupting the transportation of essential goods such as medical supplies to virus epicentres.

Coordinating cargo supplies to demand is a time-consuming business that requires intense labour and negotiation from a lot of people. During the pandemic, this has been covered by governmental departments and national carriers and have usually been organised on an ad-hoc basis

 

Operational Obstacles

Before a shipment reaches its final destination, operators have to address certain challenges including airport curfews, border restrictions and flight time limitations. If the aircraft is permitted to land in a certain country, the crew can be subject to gruelling quarantine and testing regulations. This could see them spending up to two weeks in a hotel room upon arrival causing severe disruption to the operator. Without their crew they are without an aircraft prohibiting them from making other vital cargo journeys.

These issues are likely to cause pandemonium for the future of passenger air travel when lockdown restrictions lift. It is likely that these issues will still be in affect and will continue to prohibit many people getting to where they need to go.

 

Preventative Measures for the Industry

Aviation is an industry that relies on governments to work collectively and cohesively. When it comes to air freight, there needs to be more of a concerted effort made to remain consistent from one country to the other. The COVID-19 pandemic has taught us that new procedures are required to prepare ourselves for future crises. A framework must be developed for all countries to work from and ensure that the transportation of vital supplies is not severely disrupted regardless of the critical threat level of the world.

The development of this framework will involve analysis, risk assessments, training sessions and the re-writing of standard operating procedure.  For aviation in particular, more consideration needs to be given to air cargo and how we can keep operations going in the face of a crisis.  The air cargo industry has proved invaluable during the COVID-19 pandemic; however, more support needs to be given to be able to provide that invaluable service in the future.

post-brexit-red-tape-for3e-trade

Post-Brexit Red Tape for EU Trade

Despite the lack of lorries at borders since the UK left the EU Single Market and Customs Union, various sources have highlighted significant disruption to goods being transported citing post-Brexit red tape as the cause. This is having a significant impact on the trading of goods with plant or animal origins.

The Scottish fishing industry have been struggling with confusion and uncertainty following the implementation of the deal agreed on Christmas Eve between the UK and EU governments. Some firms have seen major delays with some of their shipments being halted until 18th January due to issues with health checks, computer systems and customs paperwork which is leading to a big backlog as reported by the Guardian. As a result of this, many seafood shipments heading to France and Spain have been rejected because of the delay.

Due to backlog, the DFDS, the UK seafood industry’s largest logistics provider has suspended its groupage export service which allows exporters to group their shipments together in one consignment. This was decided only a week after the new trade deal was implemented. DFDS are expecting to resume deliveries next Monday but are warning that the service would be expected to take a lot longer than what it would before Brexit and is highlighting the importance of correct and accurate paperwork.

Other companies such as Danish ro-ro shipping and logistics operator have said that they endeavour to fix IT issues and provide more training to their staff to help customers complete the required customs paperwork and achieve a smoother process.

DB Schenker Faces Challenges

DB Schenker has highlighted the significant challenges it has faced relating to the introduction of the new customs formalities that now apply to shipments as a result of Brexit. Following the suit of many other providers, they have also placed a hold on all shipments being sent to the UK.

The provider has found that only 10% of customs documents submitted with shipments have been complete and free of errors. To try and manage this situation effectively the company have redeployed staff from their Brexit Task Force that was established over a year ago.

In a statement, they said: “DB Schenker expects shipping volumes to increase further in January. Logistics service providers can only process consignments quickly if the share of correct and complete customs documents also increases significantly. Both shipper and consignees need to ensure that compliant documents are provided.”

Cross border e-commerce trade expert, Hurricane Commerce warned that the struggles faced by UK businesses in the first few weeks of the new regulations being implemented are the “tip of the iceberg” and that severe challenges should be anticipated.

This comes as parcel carrier, DPD, was also forced to pause its road service from the UK to Ireland and Europe until the end of last week due to customs clearance issues with post-Brexit parcels.

Customs Clearance Staff Shortages

Another challenge that firms have desperately tried to mitigate before 31st December was the sourcing of a sufficient number of customs clerks to be trained up and ready before the implementation of the new trading regime. Speaking last Autumn, Barney Weston, managing director of Oceanic Resources International warned that serious shortage was unavoidable.

On the current situation, he said: “I think most (firms) managed to get the bulk of their teams in place before the end of the year, but training and ‘filling the gaps’ continues. In most cases a Customs and Compliance Manager/ Brexit Head is in place (in firms) giving the strategic lead on how to handle the UK’s new trading relationship.”

He went on to say: “I know that in many cases training and upskilling is on-going, and there is still high demand for people to fill customs clerk positions, but it’s hard to accurately quantify this in numbers. Certainly, anyone who has ever sniffed a customs clearance in their career history is still worth their weight in gold!”

“I think the whole industry will have a clearer picture on the situation by the end of the month; so much was unknown heading into Brexit. I think that shortly people will know if they can handle demand with the current staff levels or if more will be needed.”

“One positive; I spoke with a top 5 UK supermarket earlier this week who we have been assisting in building their customs teams, and so far, everything is working.”

 

British International Freight Association have confirmed that its freight forwarder members appear to be managing the challenges with a spokesperson for the association saying, “(Members) are learning the new systems as they go – (there were) hard lessons learnt but they are getting to grips with the situation in exceptionally difficult circumstances. BIFA has always said that the preparing and lodging of customs declarations was the relatively easy part of the new procedures, and the bigger issues would be with non-tariff matters such as safety and security entries and SPS controls. That has already been seen.”

BIFA director general, Robert Keen commented, “We receive calls asking technical questions on procedures but so far as we can gauge the members are very busy but coping.”

Another source close to BIFA said, “(Evidence) suggests that cross border trade last week was very quiet; probably because of pre 1st January stockpiling and companies waiting to see how things pan out. The people I have spoken to expect increased volumes this week, but nowhere near normal. So, we probably won’t get to see the true picture for some time. And who knows what the new normal will be?”

 

Hauliers wanted

Hauliers Warned of Tougher French Customs Controls

Since the UK’s departure from the Single Market and Custom’s Union, the predicted delays on Kent motorways have thankfully been avoided.

Unfortunately, this is set to change with haulage companies being advised to brace for tighter controls at French border control which could potentially see the first significant post-Brexit border disruption. The warnings were shared during two conference calls between British Industry bodies and UK government agencies on the 7th January.

Shane Brennan, CEO of logistics body The Cold Chain Foundation told the BBC that it could take months for the new trade agreements to settle in: “Trade levels are very low. It’s growing from 10% on the 1st January to not yet 50% of the traffic flows that we would normally expect and even at those levels we are experiencing high levels of confusion, delays, businesses….. not being turned back, but being told if they come back with the same level of preparedness next time they will be turned away. So the feeling is that we are building to quite a significant potential disruption.”

Reports suggest that cross-Channel HGV traffic through the Port of Dover and Eurotunnel have been significantly low over the past week and is most likely a result of supply chains stock piling items. Despite low traffic passing through, the Department of Transport advised that only 1% of lorries arrived with the correct paperwork with a further 3% being sent to Manston for testing as drivers arrived without having the necessary negative COVID test result. The Road Haulage Association advised that one in five lorries were being turned away citing both reasons with only 2000 lorries currently crossing the border compared with normal numbers of 5000-6000. Based on these reports, it is clear that the border has not been used at its normal capacity and will be scrutinised in the preceding months as to how it copes.

Failing to Prepare

Chief Economist for the Chartered Institute of Personnel and Supply, John Glen, told BBC news that he was hearing from customs clearance agents in Dover that there was a distinct lack of preparation from businesses and their custom brokers. Whilst he expects this to change over time, he is aware that the people involved are “worried that demand will increase faster than capacity does.”

Elsewhere, the BBC have been reporting disruption at the Irish border with Andrew Kinsella, managing director of Gwynned Shipping, advising them of a backlog of 60 lorries waiting to be shipped to Dublin. He explained that many hauliers are discovering that their customers are not able to generate the special declarations that are required for their goods to cross the border.

“Whilst you don’t see queues at ports and terminals the reality is that these queues are developing elsewhere in our depot at Holyhead, in our depot at Deeside and in our depot at Newport in South Wales and lots of hauliers have depots in the proximity of ports.”

“There are a lot of issues about demarcation about who is going to arrange the export declaration with the UK revenue authorities, who’s going to arrange the import declaration, the hauliers then trying to arrange the import safety and security declaration to create an ENS number which helps you generate a PBN number so there has been a lot of everyone finding their feet.”

Trade Barriers

UK retailers expressed concerns that the new UK-EU trade deal has created trade barriers that are believed to have had a direct impact on cross-Channel and FMCG logistics. Traders now believe that they will be required to pay tax on imports and exports of specific goods including food and clothing that are not completely made in Britain. With so much confusion over paperwork regarding this, some parcel companies have made the decision to suspend their road deliveries to Europe.

The UK-EU trade deal was billed as preserving its zero tariff and zero quota access to the bloc’s single market; however, some major retailers using the UK as a distribution hub for European businesses could face possible tariffs if they re-export to the EU. This could see businesses concentrating on time-consuming workarounds or relocating hubs to the EU.

The British Retail Consortium is seeking short term resolutions for the challenge’s businesses face and is seeking dialogue from the government and the EU to mitigate the long-term challenges new tariffs will pose.

A Perfect Storm of Brexit Disruption

Scottish seafood exporters have described their situation as a, “perfect storm” of Brexit disruption with their industry on the brink of sinking. Donna Fordyce, chief executive of Seafood Scotland speaks on the subject:

“These businesses are not transporting toilet rolls or widgets. They are exporting the highest quality, perishable seafood which has a finite window to get to markets in peak condition. If the window closes these consignments go to landfill.”

According to Fordyce, the sector had already experienced difficulties as a result of COVID-19 and the French border closing at Christmas as well as “layer upon layer” of problems associated with Brexit. Without exports it is feared that fishing fleets will have little reason to go out.

“In a very short time we could see the destruction of a centuries-old market which contributes significantly to the Scottish economy,” adds Ms Fordyce.

Parcel Traffic Affected

Elsewhere DPD, the parcel delivery service has told the BBC that it has suspended its European Road Service due to the “increased burden” of customs paperwork required to be completed on shipments for the EU including the Republic of Ireland. Increased paperwork has seen 20% of parcels identified as “incorrect or incomplete data attached” causing them to be returned.

In a communication with their customers, the business has spoken of a “challenging few days” for the international operation and is planning on restarting the service pending a review on 13th January.

Brexit logistics

How will Brexit Impact Logistics Companies?

With Britain’s exit from the EU single market and customs union a matter of days away and no trade agreement still in place, there are a number of steps that logistics companies should be taking to prepare.

Brexit is set to make a high impact on the sector, due to the amount of cross-border travel involved. The most troublesome Brexit issues relevant to the industry are delays at ports, mandatory border checks and ability to process the required paperwork. These issues are being tackled alongside increased costs to keep up with technical innovation and increased customer satisfaction demands. The only way for logistics companies to stay ahead are to prepare for changes and the ability to adapt quickly to changing legislation.

 

What Does Brexit mean for Business?

As the 31st December approaches, UK businesses are increasingly anxious about their prospects with many losing faith about their future. Many businesses have taken to stock piling essential goods to ensure they are not reliant on orders arriving within a certain time period. In light of this, freight forwarders are bracing themselves for a negative impact on trade between the UK and the EU that will undoubtedly affect them from a customs, bureaucratic and economic standpoint, providing the UK goes ahead with a no-deal withdrawal. Without a deal, Brexit will severely impact the movement of freight in and out of the UK whether it be via road, sea, air or rail. Here’s how it is likely to impact each mode of transport:

 

Road

Once the UK exits from the freedom of movement agreement with the EU; UK registered vehicles will be required to apply for international driving permits. The European Conference of Ministers for Transport (ECMT) permits are required for laden and unladen journeys through EU and EEA countries. If the UK cannot negotiate a deal with the EU, an ECMT permit will be required for every journey made. These permits are issued on a limited basis which will severely impact the frequency that UK hauliers are able to cross the border. EU drivers will continue to be allowed to drive in the UK on their licences; however, this is only for a temporary period.

 

Air

UK carriers will see their cargo services between EU and third countries capped at 2018 flight frequency levels which will restrict a company’s ability to opt for air travel to transport their shipments to avoid delays at sea ports. As well as this, UK carriers will also be unable to transport goods between two third countries and stop in an EU country or fly between two EU states severely restricting routes and the efficiency of their operation.

 

Sea

UK companies that are dependent on shipping routes between the UK and EU are likely to face issues with cabotage if no deal is struck between the two unions. For the UK to transport goods to a port within the EU, that individual state will need to extend their cabotage rights to the UK. So far, this is possible in Ireland, Belgium, The Netherlands and Denmark. Without a deal an individual agreement with each EU member state will need to be struck before routes can be resumed causing significant restrictions for UK sea freight companies and imposing on their efficiency.

 

Shipping companies carrying passengers and trucks, from the UK to the EU will be required to submit additional security information to the port before entering. This additional information will likely be required to be submitted before travel and by the people using the services so that the shipping company are able to comply with procedures. This requirement can be waived between EU countries but not for non-EU countries attempting to enter an EU country. Ensuring that shipping companies adhere to this new procedure will require extra training and a requirement to notify their clients that additional information will be required. All of this will require time and money at the shipping company’s expense and could potentially lead to reduced loads.

 

Delays at the Border

The UK government have estimated a 6-month disruption period at the UK border, with the worse period being the first 3 months. This has been put down to: additional time needed to conduct extra checks and not having the required space at present to do this, the prediction that drivers will not have the required licences and permits and the assumption that inexperienced traders will not have the correct paperwork.  The government have announced a transitional period where the new procedures will be simplified to mitigate delays; however, this has not been reciprocated by the EU and drivers could face delays when entering an EU member state.

In order to minimise their delay at the UK, it is being recommended that logistics companies familiarise themselves with the documents that they will be required to complete and the paperwork that will need to accompany the shipment. Recipients of goods shipped across a border should expect a duty payment to be made. Failure to do this before the shipment crosses the border could incur fines and the goods being seized until the necessary fees are paid. Customs fees and paperwork should be prepared in advance will save businesses extra money and time; both of which will be critical moving forward.

warehouse

Post Pandemic Warehouse Automation Market poised for Long Term Gains

An updated report by international market research provider, Interact Analysis, suggests that the warehouse automation market is set to make long term gains into 2023. 

Despite many industrial sectors suffering major losses as a result of the pandemic, COVID-19 has driven more people to turn to online shopping giving the sector a boost which is set to last well after the end of the pandemic.  This is causing warehouse managers to increasingly resort to automation solutions to provide a more efficient, productive and socially distanced working environment on the shop floor.

 

A Closer Look at the Numbers

Due to COVID-19, revenue for 2020 will continue to depress as completion dates for projects are pushed back to next year; however, the sudden surge in online shopping has caused a significant increase in order intake.  The second quarter order intake for Dematic has doubled compared to the same quarter in 2019, with the company planning to hire 1000 new staff by the end of the year.  In addition to this, the market size of the automation sector is set to be 6% larger in 2023 than pre-pandemic forecasts.  Although a lot of sectors such as manufacturing and apparel are predicted to see a drop in their market share – a combined decrease of $600m – the general merchandise and groceries are expected to make up for this fall, driving a significant overall net increase in the warehouse automation market.  Data from the report puts that increase at a combined market value of $3.5bn higher than pre-pandemic forecasts.  As a result of this, supermarket chains are now investing in their own warehouse automation.  With contracts to manufacture 38 automated warehouses by the end of 2025, Ocado are set to become one of the leading warehouse automation providers.

 

Software Revenues Under Threat

Another important finding from the report is that warehouse automation software revenue seems to be under threat.  An explanation for this is the growing trend among online retailers to bring warehouse execution and management software in-house.  Companies like Amazon, Alibaba and JD.com have been leading the way in this trend and other retailers are starting to follow suit.  As a result of this, we could see the market price of automation software commoditised forcing multiple systems integrators to tender bids for solution designs.  Research is suggesting that more innovation is required to suit specific sectors which off the shelf software is not providing.

Interact Analysis’ lead analyst for warehouse automation, Rueben Scriven says:

“The warehouse automation world is on the move. COVID-19 has devastated high streets and shopping malls, but there are already signs that eCommerce retailers are preparing to step in, with grocery retailers taking advantage of disused sites to augment micro fulfilment centres onto existing stores, bringing the fulfilment process closer to the customer, and attracting customers and jobs back in to the high street.  When it comes to the issue of automation software development moving in-house, we found that only the grocery sector will likely continue to heavily rely on existing integrator software solutions.  The way forward for warehouse automation vendors supplying online retailers is to increase their ability to tailor their software offering to individual customers.”

 

logistics-city

“Don’t Expand Congestion Charge,” Logistics UK plea as Government threaten to recoup TFL Losses

Logistics UK, a business group representing the logistics sector, made a plea to Rt Hon Grant Shapps MP, the Secretary of State for Transport, to outline the serious concerns they had regarding the then-proposed plans to expand the congestion charge. 

This plea came off the back of the Mayor of London, Sadiq Khan coming under pressure from Boris Johnson and other ministers telling him to make an expansion of the £15 a day congestion charge to the North and South circular roads, scrapping free travel for older and younger Londoners, and increasing TFL fares by more than previously agreed in return for a bailout package for Transport for London.

 

David Wells, Chief Executive of Logistics UK had this to say on the matter,

“Logistics UK is urging the government to refrain from including an expansion of the London Congestion Charge as a condition of Transport for London’s financial bailout package; logistics businesses continue to struggle financially and operationally as a result of the Covid-19 crisis and this additional burden would be a significant blow to the recovering logistics sector.  With little alternative to using lorries and vans to keep the capital’s businesses, schools, shops and homes stocked with the goods and services they need, these changes amount to a tax on deliveries and would therefore have little effect on commercial vehicle movements.  Instead, it would simply increase operating costs for those charged with delivering to meet the capital’s needs, including supporting the vulnerable and those self-isolating with home deliveries during this difficult time.”

 

Fortunately, Sadiq Khan has managed to secure a deal in the eleventh hour that sees the proposed expansion of the congestion charge scrapped and has secured an agreement with the government on a £1.8bn funding deal to keep TFL services such as busses and tubes running until March 2021.  Khan has been seeking a £4.9bn settlement for the next 18 months to keep public transport in London moving after the revenue collapse that Covid-19 brought with it.  Last month, Boris Johnson said that TFL were, “effectively bankrupt,” before the global pandemic began and blamed the London Mayor for the transport systems financial situation.  TFL defended Khan, saying that he had inherited a £1.5bn deficit from when Johnson, himself was Mayor.

Khan explained that although the agreed £1.8bn deal was, “not ideal,” he did add that, “We fought hard against this government which is so determined to punish our city for doing the right thing to tackle Covid-19.  The only reason TFL needs government support is because its fares incomes have almost dried up since March.”

Khan initially rejected the proposal from the government saying that it would have affected more than 4 million more Londoners.  He successfully defeated this proposal and all other proposals made against TFL in exchange for the bailout; however, the prices on fares will increase by RPI+1% in January as previously agreed.  Despite the Mayor’s success in defeating these proposals made by the government, another financial agreement will need to be negotiated prior to next year’s mayoral election.

Sadiq Khan also said that, “These negotiations with government have been an appalling and totally unnecessary distraction at a time when every ounce of attention should have been focused on trying to slow the spread of Covid-19 and protecting jobs.

The pandemic has had the same impact on the finances of the privatised rail companies as it has on TFL and the government immediately bailed them out for 18 months with no strings attached.  There is simply no reason why the same easy solution could not have been applied to London, which would have allowed us all to focus on the issues that matter most to Londoners, which are tackling the virus and protecting jobs.

I am pleased that we have succeeded in killing off the very worst government proposals.  These proposals from the government would have hammered Londoners by massively expanding the congestion charge zone, scrapping free travel for younger and older Londoners and increasing TFL fares by more than RPI+1.  I am determined that none of this will now happen.”

 

 

low tariffs after brexit

Cabinet Minister Sparks Backlash Over Brexit Transition

A cabinet office minister, has prompted a furious backlash among business associations, after accusing them of, “having their heads in the sand,” in preparing for the transition that will happen when the UK leaves the single market and customs union on 31st December.
Theodore Agnew, the cabinet minister working on preparations for Brexit within the Treasury and Cabinet office, believes that firms have been too slow in preparing due to the impact of the coronavirus and the recession that has accompanied it. He has urged bosses to become, more “energetic,” in their approach of getting ready for the final stage of Brexit.

Lord Agnew’s Comments

In an address to the Treasury Committee, Lord Agnew said, “There has been a head in the sand approach by traders which has been compounded by what I would call the quadruple whammy of two false alarms, so two extensions at the very last minute, then followed by Covid, and now followed by the recession. The traders are not as ready as they should be.
“And if there’s one headline I hope that comes out of this appearance today it’s to send another shot over traders’ bows to warn them that it’s their businesses that are at stake from January 1 and they really must engage in a more energetic way…… Ultimately the government can only do so much. If businesses haven’t engaged in the process and understood the processes from 1st January that has to be their responsibility.”
Business Backlash
The minister’s stark warning has drawn a disgruntled response from businesses that have repeatedly called for clarity and urgency from the government on what the new border processes and IT systems will look like, many of which are still not in place. Among those to speak out over the minister’s comments were Tim Rycroft, Chief Operating Officer of the Food and Drink Federation. “A ‘head in the sand approach by traders’? That’ll go down well!” This was also backed by Stewart Wood, a Labour representative of the Lords EU committee who described Lord Agnew’s comments as a, “spectacularly unfair characterisation.”

As well as the comments that he has made on business readiness for the Brexit transition, Lord Agnew also came under fire from the Road Haulage Association (RHA) by announcing that he was more interested in talking to groups that were more, “integrally involved” in cross-border trading rather than the haulage group, who have been key in highlighting the government’s shortcomings in preparing for the transition.

Richard Burnett, RHA’s chief executive, responded, “It’s clear that Lord Agnew doesn’t understand how the logistics industry works and that hauliers will have to provide the full service of customs declarations as well due to the shortage of agents. Of course he can leave us out and ignore us, but at his peril.”

Logistic UK’s Response

The response of Elizabeth de Jong, policy director for Logistics UK, made little comment to Lord Agnew’s direct comments and instead took this as an opportunity to detail Logistic UK’s approach to the transition.

“Rather than ignoring the UK’s upcoming departure from the EU, Logistics UK has been proactively urging its members to make sure that they and their customers prepare as much as possible for the new trading conditions we will face. Like the government we are also calling on the wider business community – the importers and exporters across the UK – to engage with the detail and get ready for January 1st.”

“Instead of spending the ne next 11 weeks before the end of the transition period debating who and what is or isn’t ready, Logistics UK is proactively working with government on a series of metrics to assess readiness, so that government and industry can be as confident as possible that all is on track for a smooth transition to a new trading agreement with the EU. Despite the challenges our members are facing to cope with the COVID-19 pandemic and the festive season, traditionally our busiest time of year, we stand ready to help keep Britain trading as we always do.”

HMRC has predicted that 260 million new customs declarations will be completed per year which would require an extra 50,000 new customs agents.

Relaxed Brexit Border Infrastructure Welcome but Not Enough Warns British Ports Association

On 24 September a new development order was applied, in named areas of England, relating to the requirement to check and process vehicles on entry into the United Kingdom as well as facilities for drivers and border staff. The order gives specific government border departments such as HM Revenue and Customs (HMRC) and the Department for Transport (DfT) the ability to apply to the Secretary of State to add infrastructure to its ports which will prove beneficial once the UK break away from the Single Market and Customs Union.

Approval by the British Ports Association

This order has been welcomed by the logistics industry, including the British Ports Association (BPA); however, they warn that there is still more to be done before the transition deadline. Richard Ballantyne, chief executive of the BPA said, “The legislation introduced to bypass the planning processes for border infrastructure in England is certainly a welcome move; however, there is still a lot be done to get ready for 2021. At various stages next year, new customs and border control processes will be introduced on European trade and our ports are working with the government to look at what needs to be done.”
He added that he hopes for a swift roll out of the government’s infrastructure plans, in-order that the UK’s gateway to Europe be ready.

The preparations have begun to create a physical and digital infrastructure to facilitate customs and other border procedures during transit between the UK, Europe and Northern Ireland. This could include new inspections facilities and computer systems to manage border controls that have emerged, following Britain’s exit from the Single Market and Customs Union.

Ballantyne said, “the sensible and measured implementation of the new border requirements could be essential for all parts of the freight and logistics industry.”

This order comes after a concerted effort by the Road Haulage Association and key figures from the logistics industry urged the government for a meeting over Brexit amid concerns over the slow progress that was being made.

The BPA represents 86% of port traffic in the UK, which includes major gateways such as Birkenhead, Dover, New Haven, Pembroke and Tyne. These facilities support the transport of thousands of trucks and trailers on a daily basis between Europe and the UK. This part of the industry could have the biggest impact on the new processes that are included in the new order.

Drawbacks to the New Order Identified

Following on from this, planning law expert of Pinsent Masons commented that the powers granted by the new regulations were limited to smaller developments which would not require environmental impact assessment (EIA). He explained that the development would not be able to approve new motorways or express roads over one hectare nor motorway services over 0.5 hectares unless it is proved that they will not have an untoward impact on the environment. He surmised that, “realistically…. The new order will apply to more modest changes in and around the ports.”

“Proposals must be put forward by a relevant border department – for example, HMRC – with the site owner, such as the harbour authority, only engaged on the application. Presumably, in practice, it is likely that the border department will have discussed things at length with port operators, as it is difficult to see how the border department will be best placed to lead on the necessary infrastructure to process port traffic efficiently through the port and surrounding areas.”

Heathrow Cargo

Why is Air Cargo seeing an increase since COVID-19?

According to CLIVE data services, air cargo volume saw a 12% increase in the last week of June compared to the last week of May. Niall van de Wouw, managing director of CLIVE, explains this increase was initially due to the urgent requirement of personal protective equipment (PPE) needed by governments in an attempt to contain COVID-19. Despite the international demand for PPE now beginning to diminish, Van de Wouw is confident that air cargo volume will continue to rise month on month.

“Our June analyses seems to suggest the first steps towards a structural market recovery. Despite the decreasing demand for PPE in June, we still see that the volumes increased over May. We are starting to see a more recognisable airfreight market following more logical economic principles and more logical rates.”

There is no denying that aviation has been one of the industries hit hardest by the COVID-19 pandemic. Government restrictions have prohibited entry for travellers causing ticket sales to plummet, reduced schedules and redundancies for airline staff. An increase in air cargo volume is a glimmer of hope in what has been a dark time.

How has COVID-19 impacted Air Cargo Volumes?

A number of sources have submitted their findings on how the global pandemic has affected air freight including; Veritas Global, Seabury and The International Air Cargo Association (TIACA). Alongside this, the International Civil Aviation Organisation (ICAO) have also done their own studies, which are updated and shared on a weekly basis. Despite the sheer number of agencies looking into this there continues to be a lack of reliable data but what does stand out is the following:

• Global air cargo capacity is down 35% from 2019
• 20% of belly cargo continues to fly
• Freighters capacity is showing signs of stabilising

Due to the current restrictions of passenger travel, airports are seeing a sharp decrease in their revenue forcing many to close. Despite full closures to passenger traffic, a share of airport and airside infrastructure must remain open to support air cargo which comes at a cost to a weakening cash supply.

How is TIACA Supporting the Industry?

TIACA believes that it is their permanent role to promote the air cargo industry. During the outbreak of the coronavirus, they have focused their efforts in reminding governments how important the role of the air cargo industry is to the global economy, international trade and in battling the devastating effects of COVID-19. The value of air cargo has been highlighted during the pandemic as without it the transportation of valuable medical, PPE and food supplies would not have been possible. As COVID-19 looks set to continue its impact on the world, so will the demand for medical supplies. It is vital that delivery services are able to keep up with this demand.

How have Cargo Operations Changed Due to Coronavirus?

Changes to cargo operations to mitigate the impact of coronavirus include:

• The use of passenger aircraft
• Expanded use of charter flights
• Changes in flexibility to certain regulations
• Introduction of new standard operating procedures
• Increased protection for staff

The implementation of these new operations and assessment of how effective they are is a time-consuming process and is changing everyday as we learn more about the novel virus. TIACA and other aviation organisations are pushing an initiative where a working document is created for a post COVID-19 recovery path. The main focus of this document is to suggest short, mid and long-term solutions to the issues caused by the pandemic so that the industry as a whole can recover.

What can the Industry do to Prevent this Impact from another Pandemic?

When industries such as aviation rely on governments from all over the world to collaborate and work cohesively, there needs to be a concerted effort to make things consistent. A standard that extends from one end of the world to the other.

It is clear that the implementation of new procedures to prepare ourselves for a future crisis are required; particularly, relating to health and safety in the workplace. Emergency plans will need to be drawn up and implemented to ensure that if another pandemic were to occur that industries would have systems in place to mitigate the effects that were able to destroy everything so quickly and in such a short space of time. This will involve analysis, risk assessments, training sessions and re-writing standard operating procedure. For aviation in particular, more consideration needs to be given to air cargo and how we can keep operations going in the face of a crisis. The air cargo industry has proved invaluable during the COVID-19 pandemic; however, more support needs to be given to be able to provide that invaluable service in the future.

Advice on Exporting your Car from the UK

For some, exporting their car from the UK can seem like a daunting task that can potentially put people off the process. Deciding on how long your car will remain outside of the UK will determine the documentation that you use as well as the declarations you make to the UK and overseas customs officials. The following information covers the most common eventualities of exporting your car from the UK and advice on completing this process.

Permanent Export

If you are planning on exporting your vehicle from the UK permanently you must inform the DVLA. If you are the registered keeper of the vehicle, this can be done by completing section C of the V5 Registration Document that accompanies your car. Once this is received, the DVLA will send you the Certificate of Intended Export (V561) as a confirmation of your car’s registration. Alternatively, if you have a Registration Certificate (V5C) this can be done by completing and sending the purple section of the document (V5C/4). It is important that you have your Registration Certificate with you when you arrive at your final destination so that you can present it to the relevant authority when the vehicle is eventually registered abroad. If you require any further information, this can be found by contacting us or by logging onto the GOV.UK website.

Temporary Export

If you plan on taking your car out of the UK for less than 12 months you must ensure that you take either your V5 registration document or V5C registration certificate with you. If you have lost your copy, you must inform the DVLA by completing a V62 form. It is important that you apply for this document well in advance of your departure, as your replacement Registration Certificate may take up to 14 working days to arrive and even longer if you are not the registered keeper. Please ensure that you have sent the correct fee for this service and have met domestic and international requirements relating to licensing and taxation of the vehicle.

If you are taking your car out of the UK for a limited time only, you may wish to apply for a Carnet de Passage to avoid paying a deposit to customs officials at your final destination. If you intend to obtain one of these you are advised to apply for it in advance of travelling as it can take well over a month for the process to be finalised.

If you are using a freight forwarder or logistics company, you can normally ship your vehicle without the need of a certificate; however, having this in your possession will significantly reduce your chance of delays at the UK border.

Essential Tips

Besides notifying the DVLA, there are some additional tasks that will be beneficial to complete prior to your departure. These are listed below:

• Documentation – Besides the V5/V5C document mentioned previously, you are advised to carry your valid driving licence, a form of photo ID and the vehicle identification number.

• Keys – Ensure that you carry your extra set of keys for the vehicle.

• Fuel Tank – Fill the fuel tank to at least a quarter full.

• Antifreeze – Due to the potential harsh conditions that your vehicle may be exposed to during transit, it is advised to apply antifreeze and, in some situations, rust protection.

• Vehicle Condition – Thoroughly clean the vehicle inside and out in preparation for checks that will be made on the car. Ensure that the car is in good working order unless otherwise specified.

• Personal Items – Make a list of all personal items left in the car to check off when you reach your final destination.

• Additional Preparation – Disable security systems, remove GPS, stereos or any other portable equipment, remove antennae and fold wing mirrors back.

Vehicle History

If you are not in possession of a valid export certificate, customs officials may check if your car has any outstanding finance payments left on it. This is particularly common with new or high value cars. If they discover that it does, they may not grant you permission to cross the UK border without written permission from the finance company. Checking this information before you travel will significantly reduce delays at the port.

International Duty and Tax Requirements

A good freight forwarder will be able to ship your vehicle to anywhere in the world; however, you may be liable to pay import taxes and fees when it arrives. Whilst most freight forwarders can assist you with this, it is your responsibility as the owner to adhere to any import requirements and regulations that the country you’re travelling to requires. Failure to do so may result in expensive fees, delays and potentially the confiscation of your vehicle so it is important to check this before you depart.