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Exclusive: a key customs system has been overwhelmed by Brexit, delaying exports and deepening trouble at the border 1/ https://www.bloomberg.com/news/articles/2021-01-19/brexit-border-trouble-deepens-as-key-customs-system-is-maxed-out?sref=yMmXm5Iy
Welcome to the world of transit, a core system that helps companies move goods into the EU post-Brexit. But the process is already breaking down. Here's what's going wrong... 2/
A shortage of transit guarantees. To issue transit documents -- which allow goods to cross the EU border and not be stopped at customs -- you need a transit guarantee, often backed by a bank, which covers any customs duties or taxes that might need to be paid...3/
Problem: hauliers have maxed them out. UK exporters hardly used transit before -- the EU flow was basically seamless -- and subsequently the value of transit guarantees in the market is woefully below what's needed 4/
`No one’s got any guarantees left,' said Peter Hayes at Carlton Freight, based in Liverpool, which ships goods from U.K. to EU. `We’ve had to say no to hundreds of inquiries.' 5/
Steve Cock, director of customs at The Custom House and based at the Brexit border facility in Ashford, has a £200m transit guarantee that's also at capacity, so he's turning clients away 6/
Logistics firms are frantically calling round each other to see who's got some transit guarantee spare, but with little joy. `You can't get support for love nor money,' said Mark Taylor at Britannia Bureau, a customs broker 7/
Impact #1 - Delays at the border. Drivers can't get their transit documents and are getting stuck for hours if not days at the Brexit lorry parks 8/ https://www.bloomberg.com/news/articles/2021-01-15/stuck-in-kent-how-brexit-red-tape-strangled-cross-border-trade?sref=yMmXm5Iy
One example: a Polish driver in their 60s was in tears after being stuck at Ashford for three days unable to get home, saying it was worse than shipping goods in his youth from Poland to Germany when it was behind the Iron Curtain 9/
Impact #2 - Goods simply stuck. Sealite, which exports LED lighting to the EU, has had a consignment destined for Holland held up for days because it didn't have a transit document, and the shipping agent wouldn't give one 10/
Worse, there is a big backlog of transit guarantee applications at HMRC. Hauliers say they'd been applying for guarantees months ago, but haven't had responses. HMRC said it's urgently looking at the issue 11/
Why are companies using transit? Example: imagine you're shipping something from U.K. to Spain via France. If you don't use transit, you'll have to import the goods to France, pay VAT on arrival and have a fiscal representative there to do it. It's extra cost and hassle 12/
And why is this transit issue a problem? The Custom House expects 90% of UK-EU trade will want to move under transit to avoid all the border issues, and the system is already overwhelmed with freight volumes well below their peak.. 13/
When freight volumes are back to normal levels, the transit system will just buckle, said Steve Cock at The Custom House. Putting it bluntly he said: `As soon as we get to anything realistic, we are screwed' 14/
And a reminder - the damage is so far not visible in long queues at ports, though that may come. It's happening behind the border at warehouses and at depots, where trucks are refusing to move until the documents are in order 15/ https://www.bloomberg.com/news/articles/2021-01-07/brexit-becomes-truckers-nightmare-as-red-tape-ties-up-drivers?sref=yMmXm5Iy
Fixing transit will be an urgent issue for HMRC and the Cabinet Office in the weeks ahead. And to end, here's a great excellent explanation of transit by trade expert @AnnaJerzewska from back in 2019 ends/ https://twitter.com/AnnaJerzewska/status/1095662796862304257?s=20