By Ellen Proper (Bloomberg) — The Port of Rotterdam, Europe’s biggest shipping port, warned companies on both sides of the Channel that they aren’t doing enough to prepare for Britain’s exit from the European Union, as it plans a test of its facilities to make sure it’s ready for the worst.
“If the companies don’t prepare, then we will be in deep trouble,” Mark Dijk, the Port of Rotterdam’s external affairs manager, said on a vessel trip through the facility on Tuesday. The port itself, which handles more than 465 million tons of shipments a year, is ramping up with additional digital infrastructure and more customs officials, but business needs to do more to get ready for the additional administrative burdens that Brexit will bring, he said.
While a transition agreement would keep the current customs rules in place until the end of 2020, when the U.K. leaves the EU for good, it will become a so-called third country as far as trade is concerned, meaning customs clearance will be required for all EU-U.K. trade. There also will be additional inspections of food, plants and live animals, as well as other paperwork and delays.
Brexit also will change the types of merchandise that Rotterdam can handle. Horses, for example, will have to find a new route as there is no facilities for the inspections that will probably become necessary.
The Dutch Foreign Ministry said last week that only 18 percent of companies in the Netherlands are doing enough to get ready for Brexit. For more than 40 percent of Dutch firms that do business with the U.K., filling out import and export forms, and other customs regulations, will be a new thing, according to Rotterdam Port Chief Executive Officer Allard Castelein.
Britain is one of the Netherlands’ biggest trading partners, and the Rotterdam port is also important for the rest of Europe with its market of more than 500 million people. The port handles about 40 million tons of shipments between the Netherlands and Britain a year, about 8 percent of its total annual throughput, including fresh flowers and food bound for U.K. supermarkets.
The U.K. and the EU are struggling to secure a divorce deal, leaving companies and government bodies in limbo on how the future relationship will look. While the outlines of an agreement on the future EU-U.K. relationship may be included along with the divorce deal expected in November, a formal trade accord won’t be hammered out until after Britain leaves the bloc.
The Rotterdam port aims to address capacity problems brought on by Brexit with the help of digital infrastructure, and is exploring its limited options for gaining additional space. It plans a dry-run around November to check its Brexit preparations.
The customs authority is recruiting for more than 900 new positions to help handle the extra paperwork that will be required. It expects 10,500 more ships to have extra customs requirements, based on current U.K.-Dutch trade.
For companies, these customs formalities will require time and manpower.
With the U.K. a so-called third country after Brexit, companies will need customs declarations for every shipment, said Roel van ’t Veld, Brexit coordinator of the Dutch customs authority. About 35,000 of the more than 80,000 Dutch companies that do business with the U.K. have never dealt with the paperwork involved in trading outside the EU, he said.
“Probably the biggest worry at this stage is that those 35,000 companies need to be aware that you have to do customs declarations for each and every shipment,” Van ’t Veld said. “If you just drive to the ferry, you will not be allowed on the ferry.”
In most cases, the post-Brexit customs regime will mean nine documents are needed for shipments to or from the U.K., compared with the current two, Van ’t Veld said. “Politically, there is a lot of uncertainty; for us, professionally, there is a lot of certainty,” he said, referring to the increased paperwork.
British consumers might lose out on the freshest food, as required food inspections delay shipments.
Fruit and Veg
“That there will be congestion, no doubt,” said Annika Hult, North Sea trade director for Stena Line, one of the world’s leading ferry operators, which transports trucks carrying fruit, plants and vegetables for British supermarkets. “To what extent? Very difficult to say,” she said.
Liesbeth Kooijman, head of import inspection at the Dutch Food and Consumer Product Safety Authority, said her department is recruiting additional staff to handle the increased inspections because of Brexit, including for live animals. But some might have to change course, such as horse owners.
While the authority is responsible for supplying enough inspectors, the inspection facilities are out of its hands. Once the U.K. exits the EU, horses would need to be flown in via one of the Netherlands’ airports, Kooijman said.
© 2018 Bloomberg L.P