How has Brexit impacted importation and logistics sector? Franco Azzopardi, CEO of Express Trailers explains the repercussions and the new challenges that Brexit brought about in an interview with Dayna Camilleri Clarke
What are the new importation services of items coming or going to the UK?
Whilst these importation services can no longer be referred to as ‘new’, what we know for sure is that many industries, traders and E-commerce operators have left the UK and relocated to EU countries.
Having said that, our exports have remained strong since the UK has not put too many immediate customs restrictions and controls in place for their importation, whereas we have customs clearance on importation.
How has Brexit impacted your company the most?
I believe the biggest impact was the import customs control because suddenly Britain became a Non-EU Country.
We offer a road service with transit times and frequency that are important for our customers’ supply chains. Sea services were less impacted as customs was done at the ports but transit time due to Covid pressures brought about delays.
T1 guarantees paid to UK customs to transit France and Italy en-route to Malta are hefty and expensive Rules of Origin has impacted duties.
Do you feel that the government is doing enough to support you?
Frankly it is Brussels that sets the rules and are supposed to be applicable all over the union. Having said that, being an island state is so much easier for customs to have more controls in place. It can help in fast customs process .
As CEO, what do you think can be done to further facilitate the transition these changes have brought about?
Space! We are in dire need of space at the Groupage Bonds in Hal Far. We are experiencing a serious congestion pile-up that gets worse with the weekly imports. There could possibly be a faster turnaround of the customs clearance of the non-EU, including now UK imports. At the same time perhaps the limited space that is the gold dust in the logistics world, could be optimised better according to usage. Also, logistics has always been left out of any fiscal or funding incentives. Being an island with consumption dependent on imports, and with groupage and consignment fragmentation on the rise because of changing importation patterns, has brought with it a very significant amount of pressure on investment on our part in equipment, space and people. Equipment requires parking. Land as everyone knows comes at a hefty premium. Our company has 10,000 sqmt of equipment that requires parking at night. There are no trailer parks on the island and everyone is left on his own.
Many importers are experiencing an increase in freight tariffs. What are the main factors behind this situation?
The lack of capacity on the ocean vessels mainly from China and the Far East and the scarcity of empty containers in these ports has pushed up freight costs to historic levels. Shipping lines have taken advantage of the demand for freight space and have put premium tariffs on the inbound voyages which have increased to levels of over 500% in the course of one year. There is not only a question of freight costs but also of cargo being delayed in over-congested ports and that containers are being short-shipped due to space availability and rolled over sometimes missing 2 consecutive sailings. This is causing weeks of delay and disruption to clients’ supply chain. In the short term there is no sign of relief on the tariffs and these delays. One must take precautions and assess risks for late delivery of goods.
Is Express Trailers experiencing the same increases? How is this impacting your business?
Yes unfortunately this has a ripple effect on the industry. Whilst the increases have been felt on the Sea and Air shipment modes and mainly as stated from China and Far East imports, road connections to and from our European networks have remained comparatively stable and had no major cost increases or supply disruptions. Capacity has been stable except for the Covid effects in the industry and a very slow start from the UK due to Brexit effect on Malta as a major trading partner.
How can the sector respond to this situation?
We are advising clients to plan purchases and book in advance, to find alternative sourcing from different regions, to look at supplier performance and to choose the right logistics partner. Most importantly to budget for the cost increases and to look out for new opportunities.