Concerns over customs rise amid fears of no-deal Brexit

Brexit | | MIC Customs Solutions |

Analysts believe there could be serious delays for imports and exports if no deal is reached with the EU over Brexit.

A new report has suggested that British firms and those trading with the UK in Europe could face massive delays at ports should a no-deal Brexit occur.

The Chartered Institute of Procurement and Supply (CIPS) carried out a survey of more than 1,300 UK and EU-based supply chain managers and warned that failure to reach an agreement with Brussels before March 2019 could trigger truck tailbacks on motorways due to increased paperwork and customs checks.

It discovered that one in ten UK firms believe they could go bankrupt if goods were delayed even by 30 minutes, so tight are their schedules for shipping and processing.

This comes after researchers at Imperial College London suggested that two extra minutes of checks at ports could more than triple the length of existing queues, leading to tailbacks in Kent of as much as 29 miles.

The CIPS found that a quarter of British businesses plan to stockpile goods in the coming months for fear of border delays, while four per cent have already started to do so.

However, many that deal in perishable products will not have the option of doing this.

It is thought that any disruption could prove most serious at Dover, where 17 per cent of the UK's total trade was handled last year from more than four million trucks.

Several big British firms have already warned that border control issues could cause them major issues, including Next and Honda. The latter has said its research shows a no-deal Brexit could cost it tens of millions of pounds and add 60,000 extra pieces of paperwork to its systems for imports and exports.

According to the National Audit Office, if a no-deal Brexit goes ahead, Britain would move onto World Trade Organisation rules to govern trading relationships between nations.

Up to 250,000 businesses may need to fill in customs declarations for the first time, leading to HM Revenue and Customs having to deal with as many as 260 million customs declarations a year compared to the 55 million it sees now.

Economist at CIPS John Glen said: "Common sense has got to prevail. We need to have a two-year transition period and to get something sorted out during that. The idea of day-one no-deal is just crazy.

"Businesses have become used to operating efficiently with exceptionally lean, frictionless supply chains, where quick customs clearance is a given. Customs delays would not only affect businesses but would also lead to a shortage of products on shelves and an increase in prices for consumers as well."

Some economic experts have even said the post-Brexit period could be akin to the situation in North America after the terror attacks in September 2001, when businesses and trade were badly affected by American borders being closed.

Meanwhile, ministers have spoken to downplay the concerns, insisting they could relax efforts to collect border taxes in the event of a no-deal in order to sustain the free movement of imports and exports.

The news comes after MPs on the Public Accounts Committee said they were 'disappointed' by progress on HMRC's updated customs system, which is supposed to be coming into effect to replace CHIEF next year.

It is feared that delays on this could lead to further problems at British borders.