Companies are in a last-minute dash to stockpile goods from the European Union, according to logistics industry leaders, driving the price of customs services “through the roof”.
With five weeks remaining before the post-Brexit transition period concludes, British businesses have rushed to import goods because of fears of disruption in the new year.
Michael Gove, chancellor of the Duchy of Lancaster, heightened apprehension among some executives this week by cautioning that not everything would be “all right on the night” and predicting several weeks of disruption.
“We have told our customers that the best thing you can do now is stock up, stockpile, and they’re bringing in as much as they can,” Jon Swallow, director of Jordon Freight, told Reuters news agency. “The consequence of that is there’s simply not enough capacity and the prices are going through the roof.”
Rates have risen by about a fifth over recent weeks, he estimated, with further increases likely next month.
When the transition ends on December 31, four and a half years after the vote to leave the EU in 2016, British companies trading with the bloc will have to navigate a full customs border for the first time since the single market came into effect nearly 30 years ago.
British and European negotiators have yet to finalise a free trade agreement. Either way, traders will face new administrative barriers at the border.
The government has sought to improve industry preparedness with an advertising campaign urging companies to “get ready for Brexit”, although the response has been mixed. Lord Agnew of Oulton, a Cabinet Office and Treasury minister, faced a backlash for suggesting last month that many companies had adopted a “head in the sand” approach to the changes ahead.
“Everyone is panicking,” Sam Harris of Freight UK told Reuters. “We had a farmer on the phone and he had no idea whatsoever about what needed to be done.”
Britain will need some 50,000 customs agents, up from between 5,000 and 10,000, according to industry estimates, although Whitehall officials have said they do recognise these figures. George Baker, a logistics industry veteran, this month predicted a “very serious shortage” of brokers and accused ministers of “sidestepping questions” over the issue.
The Road Haulage Association described preparations as a “complete shambles”. In a letter to Mr Gove, reported by Sky News, the lobby group warned there was insufficient time to prepare for a smooth Brexit transition as it expressed apprehension over the rollout of a new IT system.
HM Revenue & Customs has provided funding of up to £84 million to support the sector and is calling on companies to apply for state-funded grants.