Brexit and Port of Rotterdam
Now we have a divorce agreement between the United Kingdom and the European Union an important new phase for the port business community will commence. What will the relationship between the United Kingdom and the European Union look like after 29 March 2019? It is of great importance that the port community in Rotterdam is able to prepare itself for the transition and that the expected changes are limited to a minimum. This will require a strong commitment from the business community, but certainly from the Dutch government and the European Union as well.
The United Kingdom, after Russia, is the second country of origin for Rotterdam in terms of volume for goods shipped. After Germany, Belgium and Russia, the United Kingdom is fourth in terms of total throughput with a 40 million tonnes (8.5% of the Rotterdam total throughput). British import from Rotterdam consists mainly of Roll-on / Roll-off (RoRo) cargo, containers and liquid bulk. The British export to the Netherlands consists mainly of liquid bulk (especially North Sea oil) and shortsea and RoRo cargo.
As a result of the Brexit, maintaining the quality and capacity of customs will be the highest priority for the Port of Rotterdam. According to the Dutch customs authorities, as of 30 March 2019 more than a hundred well-trained extra customs officers will be required in the Rotterdam Rijnmond area. In addition to this, extra inspections and inspection points for the Dutch food and consumer product safety authority (NVWA) are needed. Furthermore the necessary additional veterinarians to execute the inspections will be a major challenge as well. Of course, this will also apply to customs in the UK. It remains to be seen whether customs capacity from 2019 can handle all the extra declarations.
Customs declarations may increase waiting times, subsequently increasing costs for freight forwarders, operators and terminal operators as well as creating additional congestion in the port area. Short sea and RoRo terminals expect available waiting space for lorries to be limited. This will be one of the major challenges for Port of Rotterdam authority to facilitate. Not only space at the terminal but also waiting times may have an impact on the use of the public infrastructure and could result in congestion on the route (for example on the highway A15) to terminals.
The Dutch government, together with the business community, must tackle the capacity challenges of customs and infrastructure. In addition, they must support the companies in preparing contingency plans to ensure that the transition will go as efficient as possible.
It is important for the European Union to negotiate a proper coordination of the digital infrastructures as well. IT systems in the Netherlands and the United Kingdom must be able to interconnect. A transition phase is needed to find new ways of cooperation between the UK and the Netherlands. Finally, it is important that the European Union ensures a level playing field between the UK and the EU member states. If bilateral agreements are made, they must apply to all ports on the continent and in the United Kingdom, with the same procedures.
To conclude, it remains uncertain if and how tariffing will apply to the producing companies in the port area. All producing and trading companies will in any case suffer from declining volumes through increasing tariff rates and fluctuating exchange rates. It seems that no winners result out of the Brexit.
Source: Port of Rotterdam