14 Sep 2018

While UK press coverage continues to focus on the Chequers paper, potential leadership challenges and increasingly gloomy "no deal" assessments, the Port of Rotterdam has issued an urgent warning to businesses about the need to prepare for the "imminent reality" of Brexit. With fewer than 200 days to go until Brexit Day, the Netherlands' Ministry of Economic Affairs estimates that only 18% of Dutch companies have begun to prepare for Brexit. Consequently, on 11 September the Port of Rotterdam Authority joined with the Dutch Food Authority (NVWA) and Stena Line to organise a press visit to the port to help engage and mobilise the remaining 82% of Dutch companies to address the practical impacts of Brexit. 

Thanks to its deep water facilities and feeder services, Rotterdam is a main point of entry into the EU for goods from trading partners around the world. However, post-Brexit, the UK will be a "third country", requiring separate customs and border clearance formalities, including regulatory compliance checks for goods and sanitary or phytosanitary checks for food and livestock. NVWA figures indicate that post-Brexit border controls between Rotterdam and the UK will incur delays of at least 20 minutes, and in some cases up to 24 hours. The port of Rotterdam expects that it will be required to perform 30% more import checks and possibly 100% more export checks than under current arrangements.

To put those figures into perspective, the Netherlands is the UK's biggest trading partner, with 54 million tons of which 40 million is shipped via Rotterdam. UK trade occupies 90% of the freight capacity on Ferries and more than 55% of the short sea containers operating from the Port of Rotterdam

Minimising delays, and the resulting costs to business, following a "no deal" Brexit would require an additional 928 customs officials and up to 140 additional veterinary and food standards officers at Rotterdam. Rotterdam's figures suggest that even if a free trade agreement were concluded, non-tariff measures would require an additional 750 customs officials. 

However, participants in the press visit emphasised that preparation for Brexit by government and port authorities cannot by themselves sufficiently mitigate the impacts of Brexit. Strong cooperation is required between government, trade associations and port authorities both in the EU and in the UK. Rotterdam estimates that approximately 35,000 Dutch businesses have no practical experience of making customs declarations, having traded only within the EU. The UK tax authority, HMRC, estimates that there are 131,000 UK businesses in a similar position, including a significant proportion of small and medium size enterprises (SMEs).

Rotterdam has emphasised the need for practical preparation, and that includes a realistic large-scale simulation exercise scheduled for November 2018. For the purposes of its "Brexercise" the port of Rotterdam will operate as though Brexit has occurred, testing the port's degree of preparedness and the extent of delays caused by additional checks and procedures for imports and exports between the port and the UK. 

The exercise will be held 90 days before Brexit. It leaves time for businesses to prepare but, as M Barnier has frequently observed, the clock is ticking.

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Attributed to Supuni Perera, Paralegal