Demand for direct ferry sailings out of the Republic of Ireland has increased by 20% this year and is most likely will continue increasing post-Brexit, particularly if the United Kingdom leaves the European Union without a deal.
Ireland’s traditional music and dance called the ceilidh commonly sees the protagonists whirling and jigging, but in Prime Minister Theresa May’s ceilidh the apparent finale could be sinister for traders on both sides of the border.
Nowhere have the political tremors that have shaken the British during the negotiations for the country to leave the European Union been more keenly felt than in Ireland. When Britain leaves the union on March 29, Ireland’s border with Northern Ireland, which is part of the UK, the north will be the only land border between the Europe and Great Britain. Protecting that border will be an administrative nightmare as Britain and Europe’s economies and customs regulations diverge.
Aidan Flynn, general manager at Freight Transport Association Ireland, highlighted some of the issues by using the example of the iconic Irish beverage, Guinness.
Speaking at the Freight Transport Association’s Brexit conference in central London earlier this week, 100 days before Brexit is scheduled, Flynn told delegates Guinness is brewed in Dublin and transported to Belfast on a bulk liquid tanker where it is canned and loaded onto pallets. From there it is returned to a Dublin warehouse ready for export to the UK and Europe.
If there is a “no deal” Brexit and a hard border is imposed, such a supply chain would be impossible, while a return to border checks and the closure of parts of the border would be anathema to most of the population on either side of the line.
If a hard border were imposed, Diageo, which owns the Guinness brand, would need to alter its supply chain and ultimately may need to use direct ferry services to Europe. Flynn, however, was concerned about the 150,000 lorries carrying 3 million tonnes of goods per year that make the crossing from the Republic of Ireland across the landbridge to Europe. The landbridge route is the most timely and is suited to the perishable goods that are traded across the Irish Sea. Using the landbridge cargo takes 20 hours via the 22 sailings per day out of Southern Ireland and through to Dover and then Europe.
Direct ferries out of Ireland to Europe double the transit time, and a container on a container ship takes three times as long as the landbridge route.
Freight Transport Association Ireland conducted a mapping exercise of the three routes out of Ireland, a crucial exercise because the vast majority of cargo, both into and out of Ireland, are agri-products and seafood, while just-in-time supply chains would also be affected.
The mapping exercise found that delays at the borders would mean that there is a 40% chance that food or other products would perish as a result of the interruptions in cargo flows. According to Flynn, the Common Transit Convention may allow a channel for Irish lorries to be fast-tracked through the border checks, but then the hauliers will meet the delays in the southeast of England.
According to Flynn, any changes to the borders could mean “remapping multiple industries’ supply chains and may simply be unsustainable for [some] sectors.”
To avoid the costly reshaping of supply chains and to maintain as normal a service as possible, the EU is considering creating a fast track system that minimises checks for southern Irish truckers. More news on this issue will emerge in time, Flynn said.
Prime Minister Theresa May has left herself with little room for maneuver following her agreement to make certain that there is no hard border between the two countries. In addition, in the Phase One discussions of the withdrawal negotiations the two sides agreed, “In the absence of agreed solutions, the United Kingdom will maintain full alignment with those rules of the Internal Market and the Customs Union, which now or in the future support North-South co-operation, the all-island economy and the 1998 [Good Friday] agreement.”
May also pledged that no new regulatory barriers would be allowed to develop between Northern Ireland and the rest of Great Britain.
In the 20 years since the Good Friday agreement, new and complex supply chains have evolved. That means any interruptions in the movement of cargo within and out of Ireland could be costly.
Smuggling would most likely return as an issue as it would be impossible to police the 254 road crossing points that separate the six counties of Northern Ireland from the Republic, according to the Freight Transport Association.
Flynn urged haulage companies and forwarders to keep an eye out for announcements from the government of the republic on the issue. He added that the Irish Government has said little on the issue, mainly to support the European Union’s negotiating position. But he said he believes any plans for the borders will be revealed close to deadline day in March.
Flynn’s counterpart in Northern Ireland, Seamus Leheny, urged traders to “think through your strategy” and suggested that companies could move to Northern Ireland or the Republic depending on their needs.
One thing is certain: PM May having left herself little wriggle room on the issue of the Irish border and the backstop negotiations, the “no deal” cliff edge is coming into ever sharper focus. And that could mean major changes to trading patterns.
