Frank Dunsmuir, Fujitsu’s Head of Customs and International Trade, is responsible for thinking about this question and how a technology company like Fujitsu could provide some of the answers.
The UK has been a member of the EU customs union for 47 years, which has facilitated the free movement of goods across the EU’s internal borders. How will the UK and EU avoid disruption to the vital trade in goods via road freight once it has formally exited the EU?
Following the UK referendum vote to leave the EU on the 23rd June 2016, the Withdrawal Agreement was finally signed on January 31st, 2020, and the UK officially exited the EU. We are now in a transition period until the end of 2020, after which new customs procedures, and potentially tariff payments, will be introduced on goods moving between the UK and the EU.
Trade in goods between the UK and EU is worth more than £430 billion annually, and vital to the health of both economies. In the run up to the end of the transition period the UK and the EU are locked in negotiations to agree a new Free Trade Agreement (FTA), with the intent of minimising disruption on this trade.
But even with an FTA new customs administration such as declarations will still be required, and additional checks on some types of goods, including food products, will be required at ports of exit and entry. This administration adds cost, and increasing the number and nature of physical checks at ports threaten to disrupt existing supply chains.
Fresh food, livestock and perishable foods are some of the most at risk commodities if delays are introduced at ports of exit and entry. The UK is highly dependent on the EU for its food supply, providing over 30 percent of its total requirements. The fruit and vegetable sectors are disproportionally represented with approximately 76 percent of vegetable imports and 41 percent of fruit and nuts imports originating from the EU.
The bulk of this trade is transported by road freight, making the ports of Dover and EuroTunnel the busiest road freight RoRo (roll on roll off) ports in Europe. Handling a staggering average of 17,000 freight vehicles per day, worth an estimated £120bn in trade, leaves no spare time to stop and check vehicles in the ports without causing major congestion. Even moving these checks to special sites near the ports may not remove the threat of congestion.
At the end of the transition period the UK will once again be in control of its borders. It therefore has the opportunity to develop and implement advanced border management solutions which ensure these supply chains and associated trade are not disrupted by new customs procedures and physical checks.
We can turn for inspiration to a examples of global best practice in the efficient management of road freight border crossings. Often referred to as the ‘Drive Through Border’ (DTB) concept, a combination of policy and technology initiatives enable ‘smart’ freight vehicles to be automatically processed and pass unhindered through border crossing points.
The foundations of a DTB are based on advanced Trusted Trader schemes (such as the EU’s Authorised Economic Operator ‘AEO’ scheme), enabling access to simplified customs procedures, which can be supported by technology to move checks away from the physical border. The promise of unhindered passage through the border and access to simplified customs procedures also reduce administration and supply chain costs to traders.
The concept of a DTB is in action on borders across the world;
Trials on the Canadian-USA border are in place today with FAST lanes allowing pre-registered vehicles to be automatically processes and rapidly cross the border. In a similar way, pre-registered vehicles crossing the Norwegian-Swedish border experience significantly reduced processing times and delays.
Meanwhile, closer to home, the port of Eurotunnel in Ashford in collaboration with its French counterpart of Coquelle has developed and tested a DTB concept to automate customs and border processing to maintain the flow of vehicles through its facilities. Freight vehicles are obliged to pre-register their vehicle and cargo details on their new ‘paring’ platform which electronically links customs declarations with the associated vehicles. On entering the Eurotunnel port, the paring document is scanned and French customs administration are notified of the imminent departure of the vehicle and goods from the UK. They are able to pre-clear or assign vehicles for mandatory inspections and spot checks, for example those containing controlled goods such as food, on arrival into Coquelle.
The UK has also hinted at a DTB concept playing a role in its future border strategy. Its recently published new Border Operating Model describes the processes it will introduce to manage road freight between the UK and the EU. This model includes a new platform called the Goods Vehicle Management System (GVMS) which will collect consignment data for each vehicle journey in a similar way to the Eurotunnel system, helping to automate some of the processing at other ports such as Dover.
The government has also recently published a consultation document on what the UK’s future border management strategy may be, which looks to maximising the promise of benefits from new and emerging technology. At Fujitsu we are continually investing our research into the role technology has to play in the future management of the UK’s border.
Fujitsu’s concept of a DTB for the UK has four main features which support the ability for freight vehicles to enter and exit sea ports as seamlessly as possible:
- Data is collected electronically for each journey and assigned to the vehicle or trailer, including; customs documents, invoice details, vehicle / trailer ID, and drivers ID.
- Border agencies (UK & EU) are automatically notified of a vehicle’s imminent arrival into the port of exit, together with the nature of its consignment(s)
- Pre-arrival checks and processing can be performed by the corresponding port of entry while the vehicle is at the port of exit or onboard the carrier (ferry or train) making its way to the port of entry
- Prior to arrival at the port of entry, vehicles can be pre-sorted into pre-cleared or requiring checks lanes or facilities.
The main challenges for exporters of food and animal products will be the requirement to demonstrate proof of origin of their goods, together with compliance to the EU, or UK, market standards depending on intended final destination. For example, goods imported from Spain into the UK would need to be compliant to UK standards and adhere to customs administration processes.
These types of checks typically need to happen at border points of exit and entry, in the EU – UK case that will mean the major sea ports. Fujitsu’s DTB concept, combined with a Trusted Trader scheme could be used to move such checks away from the ports. For example, a registered orange producer in Spain exporting produce to the UK could use the DTB platform to transport these goods. At the point of dispatch the goods are checked, health certificates issued and they are approved to be exported. On approaching the port of exit, for example Calais, the Smart truck which is transporting them sends information digitally to the port and border agencies informing them of the nature of the goods, sharing the customs declarations and health certificates, together with their status as a trusted trader. In this scenario the vehicle should be subject to a low percentage of random physical checks at both ports of exit and entry.
In summary, the ‘Drive Through Border’ concept combined with an enhanced Trusted Trader scheme would enable:
- Goods vehicles to move with minimal friction through the channel crossing ports
- Regulatory checks on goods and food products to be performed ‘in market’, reducing the need for additional physical checks at the border
- Automation of customs administration, reducing cost to industry and government agencies
- Health and security standards to be maintained through in-market monitoring
- The acceleration of the introduction of simplified customs procedures such as self-assessment.
Fujitsu believes that, by working collaboratively with government and industry, innovative technology solutions can play a major role in establishing a future border management capability to support the highly efficient movement of goods between the UK and the EU.