Lack of clarity and additional costs over border checks will drive up prices, says Logistics UK

Monday 29 April 2024

Business group Logistics UK has warned that the confusion and lack of clarity surrounding the implementation of new border checks on imported products from the EU, starting on 30 April 2024, will hit businesses’ bottom lines and, ultimately, consumers’ back pockets.

The latest phase of the Border Target Operating Model (BTOM), introduced as part of the post-Brexit Trade and Cooperation Agreement, will be implemented on Tuesday, 30 April, when documentary and physical checks and related import charges are introduced for plant products and medium and high-risk animal products imported from the EU. The range of products that could be subjected to checks include everyday items such as cut flowers, cheese, fresh fish and meat, yet there is still a pressing need for clarity over how the border checks will be implemented in practice. 

As the leading business group representing the sector, Logistics UK is pressing the government to publish the exact timeline as to when physical checks will be scaled up and details of the compliance regime underpinning the new charging system. In addition, the group’s members want the government to publish the full modelling behind its assertion that its new import controls will have a 0.2% impact on inflation over three years.

Logistics UK’s Head of Trade and Devolved Policy, Nichola Mallon, says, “We know from experience, not least when controls were imposed on UK exports to the EU in 2021, the damage to businesses that increased border friction, costs and delays cause. That is why, throughout this whole protracted process, Logistics UK has been warning of the impact the new checks will impose, on smaller operators in particular, and already hard-pressed families across Great Britain.  It is also deeply frustrating that with one day to go, our members still don’t have all the business-critical details they need regarding how the new procedures will be implemented.”

The new import charges will apply to plant and animal-based products entering the UK at government-run Border Control Posts, where a flat-rate of £29 or £10 per commodity code will be imposed. Despite a cap of £145 for medium and high-risk loads containing several different products (known as groupage), the cumulative charges of these new import controls will have a significant impact on the cost of doing business with the EU and will hit groupage operators and SMEs the hardest.

 “Official communication to the industry has been lacking in the necessary detail required to provide logistics operators with the certainty they need to operate effectively,” explains Mallon.     “The government has said it will prioritise high-risk products for physical checks and scale up checks thereafter, but we still don’t know what percentage of goods are expected to be checked on Tuesday. And critically, there is still no clarity on the exact timeline as to when these physical checks will be scaled up to their intended capacity.

“As well as serious concerns about the cumulative cost of all these new processes on SMEs in particular, fundamental questions remain about the capabilities of the government’s systems and facilities to process loads containing food and other perishable goods efficiently and at pace.  Any delays can ruin fresh produce, reducing its value and increasing wastage and this could cause breaks in the UK’s interconnected supply chain.”

“The cost of these new systems will need to be paid somewhere in the supply chain and, despite our industry’s best efforts, it is impossible for our members to absorb all of these costs given they are already operating under tight margins,” concludes Mallon. “The likelihood, despite best endeavours by traders, is that this will result in higher prices for products on our local shelves.

“Government states that it is listening to traders but 81% of businesses responding to the government’s own consultation on its proposed charging structure at the border made it clear they will have a fairly or extremely negative impact on their businesses. Government has consistently asserted that the impact of the new checks at the border will only result in a 0.2% inflationary impact over the next three years, but despite repeated calls by Logistics UK, it has still not published the modelling behind the headlines in the interests of transparency and to give confidence to UK importers and consumers.”