Summary
There has been a 3-fold expansion of direct ferry services from the Republic of Ireland to France in 2021, as well as an expansion of direct services to Dutch and Belgian ports. Using these routes to serve Irish markets could enable ACP exporters traditionally using the UK ‘land bridge’ or serving Irish markets via the UK to sidestep export pre-notification requirements further phytosanitary certification requirements, further phytosanitary inspections, and major rules of origin complications, which result in a loss of duty-free access for onward traded goods, while allowing a continuation of low-cost ‘Groupage’ cargo haulage practices. The imbalance in Irish truck-based exports compared to imports could open up opportunities for securing low-cost freight services, which balance the more expensive ferry costs along these routes. However, this will require a process of ‘match making’ between ACP exporters and Irish hauliers, where potentially Irish government support could play a role.
According to reports carried by the BBC, by the end of February 2021 freight volumes across the Irish Sea from the Republic of Ireland were ‘down significantly’. Irish exporters are increasingly turning to the expanded direct ferry services between the Republic of Ireland and the mainland EU, since ‘going direct avoids the new post-Brexit checks and paperwork associated with the Dover-Calais route.’ This is achieved since by using this route ‘lorries never leave the single market’ and ‘avoid new customs formalities’ (1).
According to the BBC report ‘in the week to 22 February, freight volumes on Stena Line ferries from the Republic of Ireland to GB were down 49% compared to the same week last year, while volumes going directly to France were up 102%.’ Stena Lines now has ‘14 weekly crossings between Ireland and the continent compared to six last year’ (1).
These Stena Line services, alongside the new DFDS Seaways ferry service from Rosslare to Dunkirk form part of a total of ‘36 sailings per week from Ireland to Northern France, up from 12 a year ago.’ There has also been an expansion of direct sea freight services to Belgian and Dutch ports.
The Port of Rosslare’s ‘freight traffic with mainland Europe rose by a remarkable 446% in January, compared to 2020.’ According to Glenn Carr, the general manager of Rosslare Europort, ‘businesses have just made strategic decisions to move their trade.’ This has even seen companies in Northern Ireland ‘sending freight south to export directly from Dublin and Rosslare’ (1).
However, given the imbalance in Ireland’s truck-based export and import trade ‘more lorries are coming back empty on the direct sea route, because Ireland is a relatively small market.’ This is an important consideration, since as the BBC report highlights ‘things are about to get more complicated’ along traditional UK ‘land bridge’ routes used by many ACP exporters serving Irish markets. This will be a result of the phasing in of new UK customs and phytosanitary control requirements from 1 April and 1 July (see companion epamonitoring.net article, ‘Brexit Bureaucracy Places Brake on Commercial Flexibility for ACP Horticultural Exports’, 16 March 2021). This will make ‘the post-Brexit border procedures on the land bridge even more cumbersome’ (1).
| Comment and Analysis For ACP exporters, shifting initial points of landing from the UK to mainland EU entry points (in Belgium, Luxembourg, the Netherlands, or France) and using the new direct ferry services to the Republic of Ireland, would allow them to side-step the problems generated by the need for export pre-notification, further phytosanitary certification, and further phytosanitary inspections. It would also mean it was possible to use low cost on-ward ‘Groupage’ cargo shipment practices on a commercially viable basis. All of these problems are avoided by ensuring goods remain within the EU single market and customs union throughout the onward shipment process.What is more, the imbalance in the Irish truck-based export and import trade potentially opens up opportunities for ACP exporters of secure low-cost return freight services to the Republic of Ireland, since otherwise these trucks would be returning empty. The immediate challenge is linking ACP exporters of short shelf-life products with Irish hauliers returning empty to the Republic of Ireland. Some ACP fresh fruit and vegetable exporters who ship to the Republic of Ireland via the UK are already reorientating their supply chains for serving the Irish market. Such operators appear to be favouring the Dunkirk-Rosslare service, given its close proximity to existing distribution centres using the UK ‘land bridge’ route. However, it is unclear whether smaller ACP exporters will be in a position to make such adjustments. Moving away from providing pallets of fresh produce twice weekly as an appendage to the export trade to the UK market, to establishing distribution networks for goods shipped via a mainland EU port of landing may prove far from a simple task. It is against this background that finding a solution to the rules of origin complications which create ‘stateless goods’, which then face standard MFN import tariffs, is a such a priority for smaller scale ACP exporters. However, the limited volume of trade from small ACP country suppliers in each of the individual products affected is such that these issues are not currently on the radar screens of policy makers in the UK, EU, or the governments of exporting countries. This needs to be seen against the background of the overwhelming preoccupation with addressing the unprecedented Covid-19 related economic, social, political and health crisis faced.
This lack of policy engagement could well create a situation where, unless effective assistance is extended to these smaller ACP exporters, they will simply be driven off markets in the Republic of Ireland and Northern Ireland. Against this background, the Irish government could usefully be approached to provide assistance in ‘match making’ between ACP exporters landing cargoes in Belgium, Luxembourg, the Netherlands or France and Irish hauliers with empty truck capacity on their return leg journeys. |
Sources:
(1) BBC, ‘Why Irish freight trade is avoiding Britain’, 2 March 2021
https://www.fpcfreshtalkdaily.co.uk/single-post/why-irish-freight-trade-is-avoiding-britain