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December 10 2018

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December 10 2018 | The Journal of Commerce 43 www.joc.com Government The European Shippers' Council (ESC) said no deal would result in vehicles traveling between the UK and Europe, regardless of where transportation companies were reg- istered, requiring a permit to access both the UK and EU haulage markets. The EU would not accept community licenses issued by the UK. "It is important for road haulage that the existing levels of transport connectivity with the EU remain the same after Brexit without the need for new transport documents or systems. Achieving an agreement that delivers this would be benefi cial for all stakeholders," the ESC said in a statement. Sebastiaan Scholte, CEO of Neth- erlands-based Jan De Rijk Logistics, reiterated the concern, saying his trucks make more than 20,000 trips a year between Europe and the UK. "If there is no deal, we will really have a problem," he told The Journal of Com- merce. "The World Trade Organization (WTO) rules will apply so there will be high import duties, but we will also need permits for drivers and for trucks. If you go out of the EU, for example, into the Ukraine, you need to ask the EU for permission, so it is unlikely there will be enough permits to go from the EU to the UK." Shippers, fearing the likelihood of major disruption to trade after Brexit, have boosted inventories in preparation for lengthier customs clearance and permit issues for truck drivers and vehicles. Philip Stephenson, chairperson of UK forwarder Davies Turner, said his company is dealing with a surge in inquiries from its Europe- an partners over the availability of warehousing space. The companies want to stockpile more goods than usual in preparation for supply chain disruption that may occur around the SHIPPERS AND FORWARDERS are trying to assess both the impact on trade of the Brexit deal currently on the table, as well as the con- sequences of the UK leaving the European Union on March 29, 2019, without a deal in place. As it stands, British Prime Mini- ster Theresa May and chief EU nego- tiator Michel Barnier have agreed on a 585-page draft of the terms gov- erning Brexit. After getting through the Westminister Cabinet, it now needs the approval of EU members. The key part of the deal for the cargo supply chain is that it includes a 21-month transition period during which the current trading rules will essentially remain the same. "The rules governing cross-bor- der shipments, which are in place at the moment, will remain as they are until the end of the transition period in December 2020," according to a note to customers by Simarco World- wide Logistics. During that period, discussions will continue to determine the fi ner points of reaching what both sides have described as a "close future re- lationship" with the aim of that pro- cess being completed by July 2020. However, Simarco said if no agreement on the fi ner detail was reached by the time the transition period ended, a "backstop" plan would be initiated on Jan. 1, 2021. As part of that, the EU and UK would become part of a single customs territory. According to Article 2 of the withdrawal agreement, "customs duties on imports and exports, and any charges having equivalent ef- fect, shall be prohibited between the parts of the single customs territo- ry," Simarco said. But it's the possibility of a no- deal Brexit that deeply concerns those within the cargo supply chain. unknown transition period following the UK's departure from the EU. "We suspect that the ongoing uncertainty over Brexit will only lead to more demand for short-term storage in the event of no deal or an unsatisfactory outcome with no mutual recognition or trading agree- ments in place," Stephenson said. Detlef Trefzger, CEO of Kuehne + Nagel, said supply chains will have to adapt to Brexit. "Our customers have started to build up inventory in the UK and are asking us for six to 12 months of additional capacity to build up a bu er until they have a bet- ter idea of what the impact will be," he told The Journal of Commerce. The International Road Trans- port Union (IRU) warns that no deal between the UK and the EU could grind transportation and trade to a halt. "Leaving the EU without a comprehensive multilateral deal on road transport and trade would be the worst possible outcome for the road transport industry, with serious knock-on e ects for the economies of both the UK and remaining EU members," said Matthias Maedge, the IRU's general delegate of the permanent delegation to the EU. JOC email: greg.knowler@ihsmarkit.com twitter: @greg_knowler Breaking up is hard to do Potential Brexit deal — or no deal — raises shipper angst on trade By Greg Knowler The possibility of a no-deal Brexit deeply concerns those within the cargo supply chain. Shutterstock.com "Leaving the EU without a comprehensive multilateral deal on road transport and trade would be the worst possible outcome for the road transport industry." International | Washington | Customs | Security | Regulation

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