11/01/2019
The car industry is making headlines again, and although some are talking of "carmageddon" it is easily possible to overstate the impact of Brexit in the reported events. A fair analysis
would suggest that Brexit is only one factor in a long-overdue industry adjustment. And even the
Guardian manages to host a commentary telling us not to blame job losses at Jaguar Land Rover and Ford on Brexit.
However, the news on
Honda is rather different. The company plans to halt production at its UK plant for six days after Brexit, enabling the group to stockpile parts in the days immediately following Britain's departure from the EU, and to ride out any short-term interruptions in supplies.
Honda, of course, is not on its own. The BMW-owned Mini plant is shutting down for its four-week maintenance period in April instead of the summer and Toyota is prepared temporarily to cease production in the event of any disruption to its supply chain following Brexit.
This puts clothes on the predictions of disruption. Hard-headed businesses are not given to attacks of the vapours, their plans driven by "project fear" to the extent that they drop millions from their bottom lines. These are real concerns, based on the best evidence available.
Evidence, though, is not something which our revered government seems to understand. Nor does it even seem to have the capability to acquire it, sufficient to enable it to make sensible decisions â even despite spending
around £75 million on consultants.
This brings us neatly back to "ferrygate", whence we learn that Seaborne Freight were "vetted" by lawyers Slaughter & May, accountants Deloitte and consultants Mott MacDonald. With their focus on the potential ferry-provider and the port of Ramsgate, these geniuses, alongside their minders in the DfT, failed to realise that it would be "impossible" for Ostend to be ready in time for Brexit.
This made the media a couple of days ago, after
the BBC interviewed the mayor of Ostend who told the broadcaster that the port needed guarantees from the ferry line, in view of concerns about their solvency. The mayor also pointed out that spending was needed for security measures to contain migrants, adding: "If the ferry line is getting millions of pounds [from] the government, I think they have to do some investments in the harbour".
But this, it seems, turns out to be only just another of the growing list of problems. Although a deal between Ramsgate port and Seaborne Freight is expected to be confirmed "imminently", the trade journal
Loadstar is telling us that any ferry service will not be "fit for purpose".
It has been speaking to a former "seafarer", with 45 yearsâ experience, 25 of them on Dover-Calais ferries, who has outlined multiple reservations. "The Ostend to Ramsgate is undoubtedly a route that will interest drivers", he says, "but I cannot see it gaining that much interest, largely due to the times involved".
Ramsgate's claim that it can cater for 24 sailings a day, he says, "is nothing more than a pipe-dream, when you consider the port's facilities". Both Ramsgate and Seaborne claim a sailing to Ostend can be completed in four hours, but actual sea journey represents just part of the time taken.
It ignores turnaround times, which, based on similar vessels trading in Dover, average around three hours at each port. Then, bearing in mind that the mile-long approach at Ramsgate is too narrow for two-way traffic, it doesn't account for pilotage in â another half hour â and the same for pilotage out at both ports.
What this amounts to is a 16-hour rotation, which rules out any possibility of operating 24 sailings a day. And the 16-hour rotation will not be popular with truckers. It means different sailing times each day.
Furthermore, says the seafarer, parties seem to be ignoring the limitations imposed by Ramsgate's third berth. Unlike berths one and two, it operates under a linkspan system, which is only capable of handling a certain type of vessel, of which the numbers available are limited.
"So", he says, "number three berth will be left open, unless they can persuade DFDS or P&O to lend one of their ships. And you can't use a traditional stern-loading vessel as it would damage, or even destroy, the linkspan equipment".
However, without linkspan equipment, and particularly the double-deck ramps available at Dover and Calais, high speed loading and unloading cannot be achieved. And while Ostend is equipped with three ferry berths, these can only handle the conventional stern loaders (pictured).
As if that was not enough, questions have also been raised about the limited number of pilots available, leaving larger-scale operations reliant on exemption certification.
But exemption certificates can only be obtained by masters and first mates on completion of an examination process, which requires the applicant to complete eight inward and eight outward movements, 50 percent conducted in darkness, on a vessel of similar characteristics to the one they will be sailing. These movements must be made within a 12-month period prior to the application, with at least half conducted within a six-month window.
For this to happen, the process needs to be under way now, but there is an obvious hurdle. Seaborne don't have the ships, nor do they know what ships they will have, so they cannot be lodging applications for the exemptions. Without exemption certificates, Ramsgate would, at a minimum, need to provide four harbour pilots. It is not clear that the post has that number.
Thus, the more that emerges about the DfT ferry contract, the more ill-considered it appears to be.
And, adding still more to the pain, we have
Getlink, operator of the Eurostar Shuttle, complaining about the anti-competitive nature of the contract. This is from chief executive Jacques Gounon who has written to Chris Grayling, stating that the
Le Shuttle is the most efficient way of supplying vital goods to the UK, which will "remain the case" even if border controls are introduced between the states. Getlink would be prepared to mount additional "missions" under equivalent contracts to those signed with the ferry operators.
With the threat of further action, possibly in the courts, Gounon makes good points but the DfT seems to be determined to add insult to injury. A source
has confirmed that it is talking with German-owned DB Cargo and Swedish-run GB Railfreight about running extra trains through the night from April to guarantee the flow of food and medicines.
As the situation thus gets more complex and absurd, perhaps Jean-Marc Puissesseau was on the ball when he suggested that a better way to spend £100 million might be to invest in facilities at Calais. Even the £75 million spent on consultants would go a long way.
Considering that the Pif-Pec at Le Havre cost â¬3 million, the sum Mr Grayling is prepared to spend on extra ferries, much less the consultant fees, would cover the installation of substantial facilities and even provide a dowry to keep them operating. In terms of speeding trade flows, this would seem at first sight a far better option.
There is even provision in EU law for pre-export inspection in the country of origin (see discussion
here), in which event the UK could perhaps build a giant inspection facility outside Dover, to be operated under EU supervision. After their loads had been inspected, vehicles could be sealed and then directed by a supervised transit corridor (under continuous CCTV observation) direct to the ferries or shuttle (see
Article 23 - this would not remove EU import controls but it could reduce their frequency).
As regards Calais and generally, there is no provision in EU law for the inspection to be anything other than in the "immediate vicinity" of the point of entry. In the run up to the Puissesseau interview, Iain Duncan-Smith spoke of facilities being supplied at Calais 12 kilometres from the port.
That seems to fit with provision being made at the Turquerie site. But, while Commission official Ms Gauer spoke of being able to defer inspection of low risk products, those which were not of animal origin, it is not possible under EU law that a Border Control Post in the "veterinary domain" can be operated there. Any site must be within the port perimeter.
As regards the Tunnel, Getlink does run trains directly to Dunkirk port, where it owns some land. Here, the law might be stretched and it be argued that the "point of entry" for these trains was Dunkirk rather than Calais, provided there was no intermediate stop.
Even then, deferring inspection does not really solve anything. Observation of the
Le Havre Pif-Pec indicates that it has parking, at a pinch, for about 40 lorries. And, with a maximum inspection capacity of about 100 lorries a day, this is hardly going to make a dent in the UK traffic, which might account for 2-3 thousand lorries a day requiring inspection.
On that basis, a modestly sized inspection centre will still have the traffic backing up all the way to the port and clogging the flows. Positioning it a few kilometres from the terminals would only buy a few hours. Thus, the only answer in the long-term is either the investment in massive, high-throughput facilities, or permanent reductions in trade â or both.
This, however, happens whether we have a no-deal scenario or, eventually, a free trade agreement. In either event, the UK becomes a third country and full border controls apply. What approving the withdrawal agreement gives us is more time to prepare, in the form of a transition period. It also allows new regulations to apply, which may give us a way out.
Small wonder, therefore, that
the CBI is warning that a no-deal Brexit would have profound economic consequences with GDP shrinking by up to eight percent, putting thousands of jobs at risk. But having cried "wolf" so often, its intervention will be dismissed by many as simply another instalment of "project fear".
From CBI director general Carolyn Fairbairn, who will be speaking today on the subject, all we will get is generalised whiffle, with no detail to support the eight percent claim. What we need, therefore, is "project reality" â a determined effort to put factual evidence before the public, setting out costs and detailed information of what mitigation measures might be needed.
Facts are a great antidote, but so far no one seems to be prepared to put them on the table. They can only be built up from painstaking evaluation of the evidence, which puts us back where we started. In an evidence-free environment, reality is being forced to take a back seat.
