Brexit: Trade regaining momentum

New rules and a lot of paperwork have presented challenges in trading with the UK, despite the trade agreement. Still, trading is well under way once more, and at the BIP centre at the port of Esbjerg, they are busy checking food imports. The experience gained at the BIP centre will now be shared with our British counterparts on the other side of the North Sea. 

The DFDS ferry from Immingham in the UK arrives at the port of Esbjerg at about 3:00 pm every day. Containers full of imported goods are driven off the ferry and over to the new BIP centre in Zodiaksvej, where imported animal products from third countries are checked.

Notification of the goods have already been received in writing, and all documents have been checked by the staff from the Danish Veterinary and Food Administration (the “DVFA”) working at the BIP centre.

Containers full of imported goods are driven off the ferry and over to the new BIP centre in Zodiaksvej, where imported animal products from third countries are checked.
 

The papers are in order, and now the lorry and the goods must pass through an ID check. The officers check that the shipment is consistent with the information in the documents, and they may in some cases make spot checks involving physical inspection. This means one of the four people working at the BIP centre will physically inspect, smell and maybe even taste the goods. And perhaps a sample will be sent to the lab. Finally, the goods are approved in Traces NT, the EU’s certification platform, and a message is sent to the customs authorities, so the goods can be cleared through customs.

People working at the BIP centre will physically inspect, smell and maybe even taste the goods.
 

Typically, an ID check takes just under 30 minutes, while a physical inspection takes a couple of hours. And for every 15 minutes, the cost runs to about 750 Danish kroner.

This is the new process for imported goods from the UK.

If we rewind to before 1 January 2021, it was a whole lot different. When a DFDS vessel arrived at the port, it would take only a few minutes before the lorries would be on the road to their various destinations in Denmark.

The checks at the BIP centre are a good example of how many rules and how much paperwork the UK’s withdrawal from the EU has led to. And that even though a trade deal was landed at the last minute.

“We’ve really been concerned about what trading with the UK would be like, because there’s such a huge difference between being an EU-member trading partner and a third country. The trade agreement did break down some barriers, but there’s still a lot of bureaucracy,” says Annette Arbjerg, head of section of the DVFA, who is in charge of the recently opened BIP centre at the port.

Brexit has meant extra waiting time and lots of paperwork. A check at the BIP centre takes from half an hour and up to a couple of hours.
 

Constructive dialogue with Port Esbjerg and the import/export industry

The new rules and the paperwork are probably part of the reason why imports have so far been a good deal slower than normal in 2021. Still, the eight people manning the BIP centre at the port of Esbjerg have been getting more and more work with each week.

“It’s clear that the need for what we do here is starting to build. I think that at the beginning, people thought they’d like to test it first,” says Arbjerg.

During the first week of January, we had only seven consignments of goods going through the BIP centre, but the volume has been growing steadily since. One week in mid-February, 52 consignments passed through the BIP centre. Even though Brexit means more waiting time for the drivers and a bit more hassle, Arbjerg says that people are friendly, understanding and accommodating.

“We’re still in a start-up phase, but we’re building experience and our regular clients are getting used to the routines. We’ve had good collaboration with Port Esbjerg and a constructive dialogue with the import/export industry for a long time, so we’ve been well prepared to meet the needs and expectations,” explains Arbjerg.

A strong starting point

On the export side, there have also been fears about the implications of Brexit. The UK economy has been hard hit by both Brexit and COVID-19, so the question was whether the country would seek to protect itself by imposing high tariffs and import quotas and trying to source cheaper goods of inferior quality from further afield.

“When the two sides reached an agreement on Brexit, it was a huge relief for the Danish food sector. The UK is an important export market for us, valued at DKK 12 billion per year,” says Flemming Nør-Pedersen, Executive Director with the Danish Agriculture and Food Council.

In 2016, when the British electorate voted to leave the EU, the food sector went into a state of high alert, because the decision might have resulted in trade barriers. In response, all parties involved teamed up, including major operators like Blue Water Shipping, DFDS, Port Esbjerg and various public authorities. Nør-Pedersen is an enthusiastic supporter of the collaboration, which led to the establishment of the BIP centre at the port of Esbjerg, among other things.

However, as a trade deal was struck, no tariffs were imposed on food exports and the fears of quotas proved to be unfounded.

“Those are two strong starting points for maintaining food exports to the UK,” says Nør-Pedersen.

“When the two sides reached an agreement on Brexit, it was a huge relief for the Danish food sector. The UK is an important export market for us, valued at DKK 12 billion per year,” says Flemming Nør-Pedersen, Executive Director with the Danish Agriculture and Food Council.
 

Reasonable outcome of the first half

Despite prospects of a future with more bureaucracy and a likelihood of more expensive delays of goods after 1 July when the grace period ends, Nør-Pedersen is in the main optimistic about the future. He points out that Danish exports are off to a good start despite the initial teething problems.

“Unfortunately, all the friction that was done away with when we had open borders will now return, but those are the terms and we’ll just have to get on with it. Fortunately, Brexit has turned out to be an amicable divorce, and both sides still value each other very much, so we simply have to continue the collaboration we’ve got on exports. That’ll be our approach,” says Nør-Pedersen.

He also does not believe market conditions will change:

“At best, they’ll probably be relatively stable, but we’ve had a reasonable outcome of the first half,” he emphasises.

Overseas collaboration

Trade is not the only thing that needs to be sustained after Brexit – so do the many long-standing business relationships. To that end, Port Esbjerg recently formalised a collaboration with the Hull & Humber Chamber of Commerce across the North Sea. This is a forum where Port Esbjerg and the Hull & Humber Chamber of Commerce will meet and discuss challenges with relevant experts, businesses and organisations.

“As a port, we’re always looking ahead, and post-Brexit, it’s important to maintain strong ties and relationships to the local regions across the North Sea. We have about 200 companies at the port that do business with the UK on a daily basis. That’s why we started this collaboration,” says Dennis Jul Pedersen, CEO of Port Esbjerg.

The collaboration also covers offshore wind and other sources of renewable energy as well as practical experience involving Brexit.  When the grace period is over, the Humber ports will also have border inspection posts in place. Currently, three of them are under construction: at Humber Port of Immingham, at Humber Sea Terminal and at King George Dock in Hull. 

“We’ll have the buildings ready by July, but there are still some things we need to get a handle on. We have a few hurdles to clear, but we’re working at full speed to be ready on time. We’re also considering visiting our friends at Port Esbjerg to learn from them and their experience,” says Pauline Wade, who is Director of International Trade with the Hull & Humber Chamber of Commerce.

She agrees with the Danish Agriculture and Food Council that the future looks bright.

“It’s all still very new, but I’m sure things will normalise in the next couple of years. I’m confident that trade will continue with plenty of demand from both sides. We just have to get past our teething problems,” says Wade.

At the BIP centre at the port of Esbjerg, the early issues were mainly about practical matters that are steadily being resolved. Arbjerg mentions as an example that they have changed their opening hours to fit in with the times when reports and goods generally arrive.

“It’s been different to how we’d imagined, but things are usually easier to handle once we get up and running.  At the end of the day, it’s about engaging in constructive dialogue with our customers,” she says.

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