It’s the industry equivalent to a Dear John letter, except the relationship isn’t technically over, it’s just much more expensive to continue. Skilled truck driver shortages, cabotage restrictions, the ending of eastern European recruitment – post-Brexit issues are beginning to emerge through the Covid fog. This week, Irish transport specialists Nolan have upped their prices.
Dismissed by government recovery proposals, pushed to the back of the grant-aid queue by the local authorities, swamped by the shipping crisis – the supply chain has had a bad Covid. What it didn’t need was its usually reliable links to the Irish market to be hit by Brexit. But that’s exactly what has happened.
In a letter to its customers, leading transportation firm Nolan has advised of an increase in prices from next month – a double digit hit for supply businesses in the UK.
Nolan confirmed: “The turbulent start to 2021 due to Covid 19 and the implementation of Brexit Customs Controls has resulted in additional costs and reduced truck hours and efficiencies for our business… Unfortunately, we cannot continue to absorb these increased costs and therefore we will be increasing our general rates by 10.60% from the 1st July. We do this reluctantly but it is the only way to maintain our service.”
One of the transportation specialist’s customers is SB Machines who use the Irish route on a frequent basis. MD Paolo Sidoli was disappointed by the news. “I received a notice from Nolan a few weeks ago on this matter and it’s a concern,” he told Coinslot. “They are the number one shipper in and out of Ireland and it really does say it all about our current situation. The reference to Brexit is a particularly worrying issue to deal with – we knew there would be problems, but Covid has distracted our attention from that. We really don’t want Brexit-related problems to start hurting everyone now, especially with three or four fold price increases hitting us due to the global shipping container crisis.”
Sidoli and the supply chain may not be that lucky.
According to Nolan Transport all the logistics forcing the price rise are aligned to Brexit conditions. Here’s how Richard Nolan explained the journey to a 10.6 percentage hike: “The implementation of Brexit Customs Controls has resulted in additional costs and reduced truck hours and efficiencies for our business. The industry wide lack of skilled and experienced HGV truck drivers has led to a significant increase in labour costs. The UK is suffering even more serious drivers issues due to IR35 and no longer being able to recruit Eastern European drivers.”
In fairness to the Brexit debate itself, the referendum was far more idealogically-led; these particular problems are purely logistical. And that is what will anger suppliers most. They could and should have been resolved during the negotiations.
Nolan outlined some of the detail: “Cabotage restrictions and the new Mobility Package regulations are also having significant consequences as to how transport is enacted in Western Europe and this has reduced truck efficiency. This is in addition to enforced uncontrollable delays in international transportation owing to Customs Clearance requirements as a result of Brexit.”
On the supply chain circuit, there is growing discomfort on the border controls. One supplier posted online: “Well at long last we managed to get a new order despatched to Ireland. What a nightmare trying to get stuff in and out of the EU. The restrictions that are in place are pathetic.”
And Sidoli, too, has some issues, notably on the tax position. “Our first lorry came from Italy a few months ago, which was all OK. But now there’s no reciprocal VAT agreement with the EU, we have to stump up the VAT as soon as the lorry entered the UK. I know this gets claimed back, but before we didn’t need to do it, and now we do, it has an effect on our cash flow. It just seems like a ‘barrier’ for trading with the EU now.”
And that barrier has just been raised a little – 10.6 percent higher to be precise.