Brexit Update: Freeports & Operation Yellowhammer

Clock  5 minutes to read

Since parliament returned from the summer recess, a law making it illegal to leave the EU with no deal has been passed. That means that unless a deal is agreed by 19 October, the prime minister must by law request a Brexit delay. However, there is uncertainty as to whether the government will abide by this and, even if a delay is requested, there is no guarantee the EU will grant it.

As far as negotiating a new deal with the EU is concerned, the PM says it’s happening, while the EU denies it.

On 9 September, parliament was prorogued for five weeks, meaning no business will be carried out until 14 October – just 17 days before the UK is due to leave the EU. On 11 September, the prorogation was ruled unlawful by the highest appeal court in Scotland, a decision that was unanimously endorsed by the UK’s Supreme Court on 24 September.

Amid the uncertainty, two recent developments look set to impact those working in transport and logistics, as well as companies that import and/or export goods.

Operation Yellowhammer

“Operation Yellowhammer” refers to government activity intended to deal with the immediate impacts of a no-deal Brexit. Details from a leaked document, Operation Yellowhammer: no-deal contingency planning, were published by the Sunday Times on 18 August 2019, The document was officially released by the government on 11 September 2019. They suggest that in the event of a no-deal Brexit, the UK will be hit with a raft of issues, including shortages of fuel, food and medicines, ports jammed with lorries, and the need to establish a hard border in Ireland. Attempts to suggest the report was out-of-date failed, as it was shown to be only around two weeks old.

The Yellowhammer report predicts that up to 85% of lorries using the main Channel crossings “may not be ready”, leading to a three-month “meltdown” at British ports. The loss of frictionless movement could see HGVs facing a delay of almost three days at borders. Customs checks at Dover and the Channel Tunnel are likely.

Meanwhile, the imposition of petrol import tariffs could lead to the closure of two UK oil refineries, with fuel shortages following.

Industry reactions have been strong and indicate the frustration many feel with regard to the lack of both progress and understanding demonstrated by government.

The Road Haulage Association’s managing director of policy, Rod McKenzie, warned of a “very, very serious problem with the UK supply chain” in the event of a no-deal Brexit. He added: “… we are calling on the government in the clearest terms to make it clear what traders have to do to trade with the Continent. This, they have failed to do so far.”

James Hookham, the Freight Transport Association’s deputy chief executive, expressed concern regarding interruptions to fuel supplies, adding: “We have been planning for queues at Dover and the disruption of trade with Ireland, but this would be a new order of magnitude.”

Freeports

The government also recently announced plans to establish up to ten freeports around the country after Brexit. The UK last had such zones as recently as 2012.

Freeports, or free trade zones, are areas that are exempt from checks, paperwork and the usual tax and tariff rules. They allow for raw materials to be imported into the freeport zone and used to create completed products, which may then be exported.

The government has established a Freeports Advisory Panel, and ports and airports around the UK will be able to apply for freeport status. Prime Minister Boris Johnson says they could benefit “left-behind areas” while International Trade Secretary Liz Truss claims they will create “thousands of jobs”.

The British Ports Association (BPA) has come out strongly in favour of the initiative and has itself developed complementary proposals for port enterprise and development zones.

BPA Chief Executive, Richard Ballantyne, said: “We are pleased that ministers recognise the vital economic role that ports play and we are keen to explore with the government how this can be boosted further.” He added: “The potential selection of ten UK Freeport sites could be transformational for some locations but there will need to be some balance to ensure that those ports which don’t have status are not disadvantaged.”

Conclusion

At the time of writing, things are in a state of flux. While nothing is set in stone, with no extension to Article 50 and no new deal, the UK would by default leave the EU without a deal on 31 October.

This is deeply concerning for many but no matter how things end up, Hemisphere Freight Services is fully prepared for Brexit. You can rely on HFS to find you the most efficient and cost-effective solution for transporting your goods, and we will also take care of the customs processes and other administrative requirements on your behalf, saving you the hassle.

To ensure smooth passage of your goods, we recommend reading our guide on preparing for a no-deal Brexit. Alternatively, please get in touch with a member of the team for further guidance or to discuss your logistics requirements.