Working for our members: Navigating the impact of the Border Target Operating Model

Logistics UK responded to the Draft Border Target Operating Model (TOM), which sets out the proposed approach to importing goods into GB from countries inside and outside the EU. Sitting alongside this is the Windsor Framework, an agreement between the government and EU to ensure Northern Ireland has full access to both the UK and EU market. 

The TOM proposals put implementation of a new model in three phases, with the first set of changes due to come into force in October 2023 – you can view draft proposals on Gov.uk. We expect publication of the final model imminently, but so far industry has limited assurances of how it will work in practice. 

A PERIOD OF SIGNIFICANT CHANGE 

Businesses are finding themselves in a period of significant change. For trade to be facilitated, the logistics industry needs certainty, affordability and simplicity in regulation and borders. Logistics UK supports the Government’s intention under the draft TOM to create the most effective border in the world, which reduces friction and facilitates trade and investment.  

However, through engagement with our members, we have identified serious concerns across six key areas which we are urging government to address in the final model. These are: 

• Lack of detail, the cumulative impact of change and challenging timescales. 
• Impacts on supply chains. 
• Potential inflationary impact and market distortion. 
• How the Windsor Framework and TOM will effectively interact. 
• EU and Rest of World readiness. 

• Meaningful engagement with the logistics industry. 

The government held a six-week feedback period, which included sessions where Logistics UK took the concerns raised by members to them. The logistics industry had anticipated a formal consultation process and it has been disappointing that instead there has been a short, more informal feedback process which has made meaningful engagement with Government difficult. 

UNDERSTANDING MEMBER CHALLENGES 

We have worked with members to understand their challenges through online webinars, workshops and member feedback groups.  

As part of that, I met with members during site visits to important international trade gateways, including Euro Tunnel, Port of Dover and Port of Southampton. We talked about facilitating and increasing the flow of trade, concerns about the Government proposals and how they will affect the way members can do business, and also their impact on inflation. 

For me, getting out on the ground and seeing the practicalities of businesses, the everyday challenges and the opportunities, means I can provide meaningful representation of members’ views to government.  

It’s crucial that government has a practical understanding of supply chains and the logistics industry which keeps the UK trading. Through engagement, I have found that concerns are shared across the membership, so government must get this model right to avoid a negative impact on our vital industry and the wider economy.  

INSUFFICIENT DETAIL AND GUIDANCE 

One of our biggest challenges right now is that members have insufficient detail and guidance to enable them to prepare to meet the requirements of the new border model from October.  

For example, we don’t know details of what new system will be in place and developing, testing, and operationalising a new IT system could take a minimum of 6-12 months – which puts us into 2024. 

There is also uncertainty on the impact on supply chains – for example how groupage movements will operate under the TOM and what support and flexibilities will be provided.  

There could also be environmental impacts if physical certificates and checks are needed for unaccompanied freight which could push operators away from short sea container freight to road freight.  

We have also called for assurances from government that there will be sufficient capacity at the border and through key corridors to avoid delays when physical checks are introduced in January 2024. 

INCREASED BUSINESS COSTS 

Another key issue is that new import control processes, and potentially different charges across border facilities, will increase business costs and could distort movement and markets. The logistics industry already operates under tight profit margins and can’t absorb higher costs. We have pressed on government the real concern that its proposals could mean higher prices and reduced choice for UK consumers during a time of already high inflation, and when the government has made tackling inflation a top priority. We have urged government to minimise costs as much as possible.  

If the final TOM does not sufficiently address these concerns, EU countries might consider it too costly to do business with the UK, with less products appearing on supermarket shelves. Government needs to appreciate that there is a whole supply network behind consumers getting their goods when they need them. Additional costs, process and friction will have an impact on this. 

TRUSTED TRADER SCHEMES 

On a more positive note, members have welcomed proposals to develop cross-government Trusted Trader Schemes. We are keen for more detail on how these will operate and the benefits, particularly to SMEs who may have to invest more to meet the suitability criteria.  

When I took part in a roundtable meeting hosted by Baroness Neville-Rolfe, Minister of State at the Cabinet Office, to raise concerns – you can read our press release on this event – I was encouraged that she assured us she was listening and working to address concerns in the final TOM.  

While we await the Government publishing a final model, Logistics UK continues to push for members’ views to be heard and to seek reassurances on how this will work alongside the Windsor Framework.  

We appreciate the time taken by members to provide meaningful feedback, particularly alongside running a business and preparing for change. I reassure members that we are representing their views at the highest level of government and will continue to push for more information and support to meet new regulations. 

Published On: 20/07/2023 14:00:00

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