This means that on top of all the supply-chain problems that manufacturers have been enduring in recent months, they’ll now face the double whammy of full customs controls for the first time. If businesses do not fulfil the new requirements, then goods won’t be able to leave the port.
Neither is the transition period complete on January 1. During the rest of 2022, we expect to see a range of other safety and security measures introduced. For example, physical checks on live animals will begin on July 1. This too will put more pressure on border controls, and further slow down the movement of trade from one side to the other.
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The basis for all these changes is outlined in the UK government’s policy paper The Border Operating Model. An updated version was published in November, with further revisions issued as recently as December 16. These changes reflect the new timetable for implementing import controls, which was only set out in September. You’ve probably heard of just-in-time manufacturing, but this is the policymaking equivalent. It has left businesses with considerable uncertainty.
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Even before all these extra new Brexit rules come into effect in January, UK ports in 2021 look set to have experienced the lowest volumes of trade since 1983. It does not help that Felixstowe, the largest British port, appears to be one of the least efficient ports both in the UK and compared to rivals in Europe and Asia. This is the case whether you measure efficiency as minutes per container move, or the average number of hours that ships spent at the port.
The UK government is trying to tackle these kinds of challenges with its £200 million Port Infrastructure Fund, but this too has been controversial. The Port of Dover took the government to court when it only received around 10% of the funding it requested to build additional passport checkpoints.
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In other words, not only are businesses facing a major adjustment in the way that they deal with customs clearance, but goods are likely to end up waiting longer in UK ports – further increasing costs on businesses because time is money. It increases the prospect that supply chains will divert away from UK businesses towards other partners instead.