UK preps emergency supply chain as Brexit nears 'cliff-edge scenario'

Dive Brief:

The U.K. awarded three freight contracts worth £108 million ($135.9 million) to help ease congestion on the English Channel in the case of a no-deal Brexit, Reuters reports.
Were the country to leave the EU without a new trade deal in place, three shipping companies — Brittany Ferries, DFDS and Seaborne Freight — would deploy vessels to call on the ports of Poole, Portsmouth and Plymouth to help transport backlogged cargo across the channel.
Roughly 16,000 trucks move between Dover and Calais each day, according to Reuters. A no-deal Brexit scenario would jeopardize the efficiency of these movements, as extra customs checks could result in minutes-long delays per truck, leading to congestion at ports and neighboring roads.

Dive Insight:

The U.K. and the EU had 18 months to negotiate a smooth transition out of the customs union, but less than 100 days from the official Brexit deadline, no deal has been reached.

"Until now there is no clear picture on how all parties involved will have to deal with the situation after 29th March 2019," the European Shippers Council said in an emailed press release. "If the present withdrawal agreement does not pass the vote [in the House of Commons in mid-January], a cliff-edge scenario will be the most likely one. Preparation after this date will be nerve-wracking."

The U.K. government recently instructed all its agencies to actively plan for a no-deal Brexit, according to Reuters. The three contracts granted to carriers by the Department for Transport are part of the agency's contingency plan to keep freight moving after Brexit. The European Sea Ports Organization warned in March 2018 a no-deal Brexit could turn ports into bottlenecks and "disrupt long established supply chains."

However, the European Shippers Council warns no amount of preparation can completely prevent "big disturbances in trade."

Part of the reason is the supply chain infrastructure to facilitate trade is already at capacity. Warehouse space is already fully utilized, leaving no space for emergency stock. Logistics service providers are already completely booked for the period around Brexit, and automation is at its limit, according to the Council.

"The only solution that shippers see is an orderly move into a transitional period, allowing governments as well as companies to finalise their preparation at least until December 2020," the statement reads.