How will Brexit change supply chains in and out of Ireland? And is YOUR logistics ready for the impact?
23 September 2020
As a central hub for the manufacture and distribution of some of the world’s most prominent service-industries, Ireland has in recent years become highly dependent on the free-flow of parts, products and medical equipment. Trading as it does in the European marketplace, supply chain movements form a huge part of the Irish transport industry. Yet, as Brexit discussions continue, it’s becoming increasingly clear that organisations will need to prepare for new customs obligations, because changes to customs and checks are now likely, no matter the outcome of the ongoing political debates.
While the extent of the impact will depend on the outcome of these discussions, or a deal (if indeed one can be reached in time), one of the biggest changes we can expect to see for organisations is a massive upsurge in customs paperwork and administration. As such, Irish exporters should already be working on their preparations and should be prepared to act quickly in response to the potential disruptions Brexit could bring.
That said, a lot is still very much unknown. What we can do now however is look at what is known at this stage and what can be done to get prepared. Carousel is poised for an assortment of outcomes and as part of our commitment to helping organisations navigate this tricky time, our blog today looks at the current implications Brexit could have on Irish freight movements, effective 1 January 2021.
What WILL happen in Ireland after 31 December 2020?
After the transition period has ended, Northern Ireland (NI) will in effect be outside the EU and will leave the customs union. NI will continue to enforce the EU's customs rules at all points of entry.
The UK and EU have agreed that this will not mean new checks or controls will be needed on goods that transfer between the two parts of Ireland, however, this will mean that some new checks and processes will be introduced for goods moving to NI from other parts of the UK – these will particularly impact food and agriculture products – but further details of this are still being negotiated at a political level. However, with that said, shipments from mainland Europe (from places like Germany and The Netherlands for example) into the ROI, will only see minimal changes, even when these goods transit through the UK.
Why organisations need to focus on Ireland, NOW
The customs process can raise many challenges and some potential problems for importers, especially for companies who bring goods into NI from the rest of the UK; as these goods maybe subject to tariffs and duties (to protect against internal movements throughout Ireland). The biggest challenge however is the amount that’s still unknown. We still don’t know what goods will be deemed as ‘at risk’ (and therefore liable for tariffs) but also, the new tariff rebate system, required to facilitate these tariffs, is still to be designed and implemented.
There is of course still a chance that an agreement will be sought, and this may see zero-tariffs covering all goods. Yet, while negotiations continue about how the transfer of goods will work from 2021, it’s important to note that even if a trade deal can be sought, it will not replicate the current customs union. So, change will happen, no matter what.
Why getting a trade deal would be good for Ireland
A trade deal would have the potential to remove many of the tariff issues outlined above - particularly if a zero-tariff agreement can be made. Whilst this would safeguard GB-made goods entering NI, there would still be an issue around differing third-party country agreements with either the EU or the UK.
Despite differing views on its benefits, it’s certainly better than a ‘no-trade-deal’ which would impact both NI and the rest of the UK, but in very different ways. The withdrawal deal already guarantees frictionless trade with the Republic of Ireland - and by extension the EU – but a ‘no deal’ would mean England, Scotland and Wales would face tariffs (and other trade barriers), whilst NI would not.
Managing the potential of delays – what are your options?
Any changes made to current procedures has the potential to bring delays, particularly by road which can be unpredictable.
Road delays at non-EU borders are not uncommon and are caused by the additional administration required for declaring goods and their country of origins. To help prevent this, the Port of Dublin has already built additional customs facilities, including drive-by booths and coverage inspection areas where goods can be unloaded and examined. Yet, for companies exporting to or from the European continent, the extent of these potential delays is still unknown.
However, there are alternatives to using a road network, that can help avoid these delays. The alternative being a time-critical air-bridge solution.
Selecting an air-cargo provider, and one that is also an Authorised Economic Operator (AEO), will ensure that the transfer of goods is managed in the most time-efficient manner. The AEO certification allows providers to accelerate import and export procedures through Customs Simplified Procedures and facilitate just-in-time (JIT) logistics solutions – particularly important, should a no deal Brexit happen. Benefits include: later pick-ups, earlier arrivals / deliveries, fewer delays and streamlined processes.
Another option to consider when planning for Brexit is establishing a customs / bonded warehouse in the UK where goods are held physically, but have not yet cleared customs, or are in transit.
How to manage time-critical services post-Brexit – our expert advice
As a service-logistics specialist we understand, more than most, the importance of maintaining time-critical logistics and specifically, the important role JIT delivery solutions play. This is particularly relevant for the agriculture, medical and construction industries - where penalties can occur if goods are not delivered to the right place, within a pre-agreed timeframe. As such, exporters must be prepared to manage delays and mitigate them wherever possible.
Carousel’s advice (and particularly for those companies with JIT constraints) is to consider utilising an air-cargo option in and out of Ireland, where goods can still be brought into the country, at the last minute, with minimal possible delays. A solution of this kind will help avoid delays, to circumnavigate the short straights, and importantly ensure end-customer requirements can still be met.
The situation in Ireland is still being decided and is still subject to changes, as political negotiations continue to develop over the coming weeks. Carousel is however committed to sharing our expertise and doing whatever it takes, and more to help and support high-performing businesses through the transition. Look out for future updates from us on how to maintain reliability and consistency in your logistics post-Brexit - both in and out of Ireland.
If you’re not already talking to Carousel about your post-Brexit planning, then get in touch today by emailing email@example.com, to speak to a member of our expert team or to book an introductory meeting to discuss your requirements.