Principles of Logistics

Assessment 2

Brexit has left the European Union. What are the

implications of Brexit for UK road transport and short sea
ferries?
I. The essence of Brexit

The European Union is an organization associating numerous countries, which has a

special position on the international market. Nowadays, as well as referring to the past, it is
difficult to find another organization with the same coherence and integration. There is no
doubt that the EU plays a key role for many sectors of the economy around the world. It is
recognised that the European continent is an area of prosperity and peace. There are many
views, both pointing to the positives of membership of the European Union, but also
pointing to the negative effects associated with it. It is widely recognised, as evidenced by
figures and statistics, that economic growth and an overall improvement in conditions are
observed in the Member States. This economic growth is a key success for the Union,
alongside maintaining a high level of security and consensus between Member States.
(Usewicz, 2017).

In 2016, the achievements of the European Union in the United Kingdom were
questioned. For the first time in the history of the organisation, the citizens of a Member
State decided democratically to leave the EU and showed the world that membership is not
a coercive element, given forever, and that at any time, each country can take its own path.
It was a key moment for history but also for the economy, both for the EU member states,
the entire organization and the United Kingdom itself. (Krzemiński, 2010).

The notification letter, informing the European Council of the European Union about
the fact that the United Kingdom intends to withdraw from the organization, was delivered
on March 29, 2017. An excerpt from the European Council's statement on the event was as
follows: (Granowska, 2018): "We regret that the United Kingdom will leave the European
Union, but we are ready for the process that we will now have to carry out. (...) During the
negotiations, the Union will act as a single entity and will protect its interests. Above all, we
need to minimise the uncertainty that our citizens, businesses and Member States feel about
the UK's decision."

The legal basis governing the withdrawal of an EU member from an organisation is

governed by the Lisbon Treaty of 2009, which stipulates that each country has the right to
decide to withdraw from the organization on the basis of its own constitutional law. The
withdrawal is a voluntary activity and does not require external consent. The state that
wants to withdraw from the organization signs the appropriate contract, committing to
implement it within 2 years. This agreement contains transitional provisions mitigating the
consequences of the withdrawal. In the event of Brexit, the agreement addressed issues
such as citizens' rights, the problem of borders, financial obligations and the international
obligations of the United Kingdom undertaken during the period of membership of the
Union (Ibidem).

In early February 2017, the UK government issued a White Paper entitled The United
Kingdom's Exit from the European Union and a New Partnership with the European Union,
which sets out the government's plans, in the form of 12 priorities leading the way forward
(Ibidem)::

 ensuring certainty and clarity;

 taking control of the rules and abolishing the jurisdiction of the CJEU by the United
Kingdom;
 strengthening the Union by concluding an agreement that benefits all the nations
that make up the United Kingdom;
 protecting strong ties with Ireland and maintaining the common travel area;
 immigration control;
 ensuring the rights of EU citizens in the UK and UK citizens in the EU;
 protection of workers' rights;
 ensuring free trade with European markets;
 ensuring new trade agreements with countries around the world;
 ensuring that the UK remains the best place for science and innovation;
 cooperation in the fight against crime and terrorism;
 carrying out a smooth and correct withdrawal from the EU;

Currently, the United Kingdom is no longer a member state of the European Union.
She left on February 1, 2020. According to statistical surveys conducted among UK citizens,
they are not fully satisfied with the decision they made in 2016 during the referendum. As
many as 6 out of 10 people who were convinced of the rightness of the UK's exit from the EU
indicated that in the current situation they would decide otherwise. Brexit has had a number
of consequences in every area of the economy.
II. Brexit implications for UK road transport and short sea ferries.

Discussing the implications of Brexit for British road transport and short sea ferries is
worth starting with a table with assumed forecasts for the next years after leaving the EU for
selected macroeconomic categories.

Table 1. Projected impact of Brexit on selected categories of the UK macroeconomic

economy in 2020, 2025 and 2030.

ECONYMOUS CATEGORY FTA Scenario WTO scenario

YEAR 2020 2025 2030 2020 2025 2030

Consumption
-2,8 -1,8 -1,8 -5,5 -5,3 -5,2

Investments
-16,4 -4,7 -1,7 -25,8 -14,8 -9,9

Export
-3,6 0,4 0,7 -9,8 -8,4 -6,0

Import
-4,8 -0,6 -0,3 -11,9 -10,5 -7,8

GDP
-3,1 -1,1 -1,2 -5,5 -4,1 -3,5

Source: P. Wieczorek, Effects of Brexit on the economy of Great Britain and Polish [in:] State and
Society No. 3, 2017, p. 443.

As you can see, imports and exports, which are in the group of leading
macroeconomic categories, Transport is therefore one of the departments of
microeconomics that is most affected by the UK exit from the European Union. For example,
Poland and domestic carriers, until 2020, performed about 500,000 the transport of goods
across the English Channel during the year. England was the 4th country served by Polish
transport. Moreover, not only for Polish, but also for a number of other countries, England,
in terms of economics, became a third country, and transport covered a number of
difficulties related to the law and the necessary documents.

The basic document that regulates transport between the Member States of the
European Union and the United Kingdom is the Trade and Cooperation Agreement between
the European Union and the European Atomic Energy Community, of the one part, and the
United Kingdom of Great Britain and Ireland. The north on the other hand. The third section
of the agreement covers road freight transport issues. Initially, for a better, unambiguous
understanding of the contract, key concepts related to transport were defined. At this point,
the content of the contract should be quoted:

,, Article ROAD.4 Transport of goods between, through and within the territories of
the Parties:

(1) Subject to compliance with the conditions referred to in paragraph 2, road transport
operators of a Party may carry out:

(a) journeys by a laden vehicle from the territory of the Party of establishment in the
territory of the other Party and back, with or without transit through the territory of a third
country;

(b) journeys by a laden vehicle from the territory of the Party of establishment in the
territory of the same Party, with transit through the territory of the other Party;

(c) journeys by a laden vehicle to or from the territory of the Party of establishment,
with transit through the territory of the other Party;

(d) unladen journeys in connection with the journeys referred to above;

(2) Road carriers of goods of a Party may make the journey referred to in paragraph 1 if:

(a) hold a valid licence issued in accordance with Article ROAD.5 [Requirements for
carriers],except in the cases referred to in Article ROAD.6 [Exemption from licensing
requirements];

(b) and the journey shall be carried out by drivers holding a certificate of professional
competence in accordance with Article ROAD.7 [Requirements for drivers] paragraph 1.

The key issues addressed by the document, called the agreement, involve a limited
number of transport journeys within the Member States. According to the agreement, road
haulers of goods from the United Kingdom can make up to two journeys with cargo from
one Member State to another Member State without returning to the UK. In addition,
United Kingdom road haulers may make a single journey with cargo within the territory of a
Member State, provided that the operation: is compatible with the journey from the
territory of the United Kingdom and takes place up to 7 days after unloading in the territory
of that Member State.

Another important element is the issue of having a Community license. An extract

from the license should always be in the vehicle and be presented by the driver in the UK at
the time of request by the authorities. From February 21, 2022, the requirement to have a
license also applies to drivers of vehicles with a permissible total weight of 2.5 to 3.5 tons. In
addition, vehicles that enter the UK should be driven by drivers with a valid document
confirming professional qualifications, as well as confirming the necessary training. Drivers
who meet these requirements can make journeys to the United Kingdom:

1. bilaterally - that is, to transport goods to and from the country of the carrier's
registered office;
2. transit - carriage of goods through the territory of the UK, with unloading from
another country;
3. make EU cross-trade - i.e. make transport between an EU Member State, other than
the country of the carrier's registered office, and the United Kingdom;

Carriage within the three possibilities distinguished above is associated with the
possession of adequate documents. Thus, in the case of bilateral transport, the required
document is a Community license. The excerpt from the license is the key and only required
document in this respect. In the case of transit journeys, carriage is also possible by means of
and under license. Restrictions were introduced at the time of using cabotage transport, i.e.
when a transport company provides a road transport service as part of its business activity,
while not having its registered office in a given country. Cabotage operations are currently
possible only when the goods have been imported into the UK. In addition, the restriction
assumes that the number of cabotage operations may be two, the second of which must be
carried out within 7 days of unloading the first, performed as part of a bilateral or EU cross-
trade transport.
 Without a license, it is possible to transport:

 Mail
 vehicles after breakdown,
 medicinal products, equipment which serves to meet medical needs in an
emergency, particularly in the event of a natural disaster and in the framework of
humanitarian aid,
 transport for the entrepreneur's own needs,
 transport carried out by motor vehicles whose maximum permissible speed does not
exceed 40 km/h.

Another requirement for transport vehicles that the contract undertakes is the
mandatory equipment with a tachograph installed, checked, used and controlled. An
obvious fact is the driver's obligation to comply with the road transport regulations that
apply in the UK. In addition, the agreement introduces an exemption from taxes and fees
charged for owning vehicles or moving them on the territory of the other party, which does
not apply to tax or charge on fuel consumption, tolls for the use of toll roads, fees for the use
of bridges, tunnels, ferries.

Moreover, when it left Brexit in 2020, the UK ceased to be a member of the Customs
Union, the EU's single market. The transport of goods has therefore been placed under
extensive customs procedures that apply to both the import and export of goods. The
negative factors in this regard that are taking place are:

 numerous mandatory border controls,

 delays in ports, both for road and sea freight, caused by customs controls o,
 resignation of carriers from the provision of transport services at controlled
temperature,
 limited ability of clients to process the required documents,
 increases in customs duties and transport,
 additional obligations for customs officers,
 an increase in the number of inexperienced traders who do not know the procedure
and do not have documents
 difficulties in securing trucks by importers of goods from great Britain, increasing the
number of empty semi-trailers, as an alternative, not requiring documentation.

From 1.10.2021, when exporting goods from the UK, it is required to submit an Exit
Summary Declaration (EXS) to the UK customs authorities. The declaration shall relate to the
export of empty pallets, containers and vehicles under a transport contract, empty reusable
packaging, goods temporarily stored for more than 2 weeks, and those stored for a shorter
period of time, without security data, the place or consignee of which has changed, goods
moved in transit using a transit accompanying document (TAD) or a transit security
accompanying document (TSAD), a TIR carnet.

Traders wishing to make a transport operation with the United Kingdom are required
to ensure customs operations related to import or export with a third country. One of the
mandatory formalities is to apply to the e-client platform. The goods must be declared at the
customs office in accordance with the customs procedure in force. The carriage of goods
from the UK to the EU is subject to a 0% customs rate, which also requires a declaration and
completion of relevant documents. Goods imported into Northern Ireland by direct
transport from a third country are released for free circulation and are subject to the EU
Common Customs Tariff when they are at risk of being imported into the EU common
market.

Customs aspects to which the entrepreneur should pay special attention in the
context of transit procedures to/from the UK:

 EORI number
 authorization for the use of a comprehensive guarantee in Union transit
 customs status of goods
 Entry Summary Declaration (ESD)

The payment of customs duties shall concern:

 VAT on imports,
 excise duties and customs duties,
 charges related to customs clearance.
 Brexit has also caused an increase in customs controls and delays in maritime
transport, i.e. in ports. Kontola and additional formalities related to the transport of goods
contributed to the increase in the waiting time for ferry flow. In the field of maritime
transport, the agreement between the UK and the EU assumes that both parties will be guided
by the principle of unrestricted access to international maritime markets and maritime trade.
This cooperation is to be conducted by the United Kingdom and the European Union on a
non-discriminatory and commercial basis. This means, m.in, that ships of the other party are
to be treated on an equal footing with their own ships in terms of: access to ports, use of port
infrastructure, use of maritime ancillary services, designation of berths in port and customs
infrastructure.

Under the terms of the agreement, the UK and the EU will provide port services to ships of
the other party, such as pilotage, towing and towing assistance, supply, refueling and water
refueling, waste collection and ballast waste disposal, harbor master's office services,
navigational assistance, emergency repair services, anchoring, mooring and berthing and
berthing services and services necessary for the operation of the ship, including
communication services, water and electricity supply. According to the agreement: both
parties undertake to accord to ships flying the flag of the other Party or operated by service
providers of the other Party treatment no less favorable than that accorded to their own
ships, inter alia, as regards:

(i) access to ports;

(ii) the use of port infrastructure;

(iii) the use of maritime ancillary services, and

(iv) customs infrastructure and the designation of the vessel's berth in port and the equipment
for loading and unloading; including related fees and charges
.

Other changes that are worth mentioning are those related to passenger transport. The
agreement assumes that it is possible to transport people in one or two directions, as well as
transit transport. An important indication is that a road transport operator of persons of one
Party may not operate regular or special regular services with a place of departure and
destination in the territory of the other Party. Coaches and buses must meet the requirements
indicated in the INTERBUS contract. Carriers sometimes have to apply for authorization to
submit services. This is the case for the provision of passenger transport services on a regular
basis. For EU countries, the licensing authority is the authority of the Member State where the
transport begins. The authorisation shall specify: the type of service, the route of transport, in
particular with the designation of the destination, the period of validity of the permit, the stops
and the timetable. The permit or a copy thereof should be stored on the bus. Other required
documents are the contract between the carrier and the organizer or a copy thereof.

In terms of seaports, Brexit has had a very strong impact on the functioning of ports
and flows within them. The key changes concerned Ireland, as the country's trade was
transferred to EU markets. This is due to the designation of new sea routes that bypass the
UK. Thanks to the new routes, it is possible to reduce formalities. The statistics are as
follows:

 Already in the first 9 months since the UK's departure from the EU, the drop in truck
freight on ferries between Holyhead and Dublin fell by 1/3;
 A sharp decline was also recorded in the case of trucks that travel on the UK-Ireland
route and across the "land bridge" to continental Europe;
 Dublin and Rosslare saw sharp declines in truck freight traffic between Ireland and the
UK, but an increase in the volume of cargo on direct routes, which was influenced by
the avoidance of the UK due to new formalities;
 The number of trucks carried by ferries between Northern Ireland and the United
Kingdom has increased;
 There have been no changes at Dublin Port or Rosslare Europort;
 One of the leading companies - Maersk, undertook the collection of containers
collected during the time from the ports of Felixstowe, Rotterdam and Antwerp. These
containers concerned an extended waiting time of up to 20 days;
 According to the data, Irish shipping traffic has not been affected, and about 20 ships
arrive in Dublin every day;
 The port of Rosslare Europort recorded a decrease in truck traffic by 30% for ferry
connections, but also an increase of 370% on direct routes;
 There are currently 44 direct ferry connections between Ireland, France and the
Benelux countries, compared to the pre-Brexit situation when there were 7;
 The Port of Dublin recorded a 21% drop in trade with the UK, as well as a 36%
increase in trade with the EU in the 9 months following Brexit.

III. SUMMARY

Brexit was undoubtedly an event that was not important for the economy of not only
Great Britain, but also the entire European Union, as an organization, as well as for the
member states individually. It was reflected in individual areas of the economy, and as
analyses and forecasts assume, these changes will continue for the coming years.

In order to alleviate any inconvenience and to regulate relations, dependencies and

cooperation between the European Union and the United Kingdom of Great Britain, an
agreement has been drawn up to regulate the relations of both parties. One of the key elements
that was highlighted in it is transport. It concerns not only the transport of passengers, but
above all goods, and thus trade, affecting other areas of the economy: especially trade and
services. Freight exchange and transport, both road and sea, have become a bit more
complicated, due to the implications imposed. Exchange and transport between EU countries
and the UK is now as a trade in goods of third countries.

As drivers point out, the biggest difficulties in transport are primarily:

 increase in freight prices,

 the need to pay customs duties,
 customs clearance of goods at customs offices,
 customs controls,
 the need to have a number of documents,
 longer waiting time for entering the ferry.

The conclusion of a trade agreement between the EU and the UK allowed to reduce to
a large extent trade and service barriers and high tariffs. An important aspect has also become
the restriction of the free movement of people, and thus the creation of a point immigration
system. Employees from this point on must apply for a work visa.

BIBLIOGRAPHY:

1. Granowska J. 2019 , Brexit- podstawowe zagadnienia, Kancelaria Senatu, Warszawa,

2. Krzeminski M., 2010, Wpływ integracji Polski z Unią Europejską na handel rolno-
spożywczy z wybranymi krajami europejskimi [w:] Roczniki Naukowe
Stowarzyszenia Ekonomistów Rolnictwa i Agrobiznesu,.
3. Usewicz T.,2017 Brexit i jego konsekwencje dla wspólnej polityki bezpieczeństwa i
obrony Unii Europejskiej [:] Roczniki Bezpieczeństwa Narodowego
4. Wieczorek P. 2017, Skutki brexitu dla gospodarkiWielkiej Brytanii i Polski [w:]
Państwo i Społeczeństwo.
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Secretary has reaffirmed.
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