Trade bodies seek urgent inquiry into ports congestion amid fears it will get worse on 1 January

Thu 17 Dec 2020
Posted by: William Barns-Graham
Trade News

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Major UK trade bodies have written to MPs calling for an urgent inquiry into congestion at the countries’ biggest commercial ports.

The British Retail Consortium (BRC) and the Food and Drink Federation (FDF) are among those to have written to parliamentarians voicing their concern about logjams at Felixstowe and Southampton ports, according to Reuters

Post-transition fears

The congestion is fuelling fears of border chaos when the transition period – under which the UK is continuing to trade under EU rules – finishes on 31 December 2020.

From the start of next year, businesses and hauliers will be faced with new administrative requirements – including completing customs declarations – to move goods between the UK and EU.

The government’s worst-case scenario planning has predicted that additional paperwork could lead to queues of up to 7,000 lorries in Kent by Dover port, as well as disruption at other key border locations.

Brexit stockpiling and PPE demand                                  

A surge of pre-Brexit stockpiling is already leading to port congestion, supply chain delays and traffic jams, the FT reports.

Continuing high demand for PPE as a result of the Covid-19 pandemic is also contributing to the growing backlog of imports.

Speaking on the Today programme on Radio 4, BRC chief executive Helen Dickinson said that thousands of containers of PPE at Felixstowe port need to be cleared quickly, otherwise there “could be further disruption on 1 January when we change customs procedures and processes”.

Shortages possible

A new IHS Markit and CIPS (Chartered Institute of Procurement and Supply) survey, reported in the Guardian, confirms that the end of the transition period is piling pressure on the UK’s importers, raising the likelihood of supply shortages. 

James Smith, an economist at the Dutch bank ING, told the Guardian: “The concern will be that these problems will become magnified next month when the UK and EU move to new trade terms. Even under a free trade agreement, which we still think is the mostly likely scenario, there will be major changes for businesses.”

Stockpiling generates growth

The same survey also suggested that stockpiling is contributing to growth in the UK economy, with new manufacturing orders expanding at their fastest pace since August, according to the FT.

The IHS Markit/CIPS purchasing managers index recorded 50.7 in December – up from 49 in November. Any score above 50 indicates growth.