Freight firms have been advised by industry bodies to continue to prepare for a 'no deal' Brexit despite the European Union (EU) offering the UK an extension to the deadline for it leaving the bloc without an agreement.
In response to a request from UK prime minister Theresa May for a three-month delay to the UK’s departure date from its 29 March deadline, leaders from the other 27 EU states, at a summit meeting late last week in Brussels, agreed to delay Brexit until 22 May if the withdrawal deal is approved by UK MPs. If the deal is not approved, the European Council said an extension until 12 April will apply, by which date the UK would be expected to come up with alternative proposals.
The UK’s Freight Transport Association (FTA) told Lloyd’s Loading List that its advice to members was to continue preparing for a no-deal Brexit.
A spokesperson commented: “It looks like there could still be a ‘cliff edge’, but it could just be down the road a bit. We should have more clarity next week (this week) and be able to let members know more then about what they can expect.”
“If the withdrawal agreement is approved, then we would expect to leave on 22 May, and we understand there would still be a transition period of 21 months,” the FTA noted. “Of course, there is still the option of a longer delay or a more-radical options. But it is still safer for us and our members to prepare for the most-challenging option, which is ‘no deal’. So our line is to prepare for the worst and hope for the best; to prepare for no deal until that has been ruled out.”
Nevertheless, although nothing is certain, the FTA is now no longer expecting for the UK to exit on 29 March, but added that “a day is a long time in politics.”
The organisation has consistently highlighted the difficulties that a no-deal exit would create for freight transport providers and their customers, which it has been saying for a long time will bring disruptions to supply chains and additional costs and transit times. Senior logistics sources maintain that companies have not had sufficient time to put all the necessary processes in place, nor is it clear what those processes and preparations would need to be, in many cases.
The director general of British International Freight Association (BIFA), Robert Keen, underlined that the possibility of a no-deal Brexit appeared now to have been pushed to April, “and our advice is still to prepare for no deal”, adding: “As I have said before, we are aware that many members are assiduously doing all they can to be prepared and they echo what the CBI has been saying for months about the need for certainty.” He noted that BIFA was apolitical, understandably noting that “we will resist trying to guess what will happen in Westminster”.
In the latest political developments, MPs on Monday evening voted to take control of the parliamentary timetable in an unprecedented move to try to find a majority for any Brexit option, BBC News reported.
The prime minister was dealt a fresh blow as the government was defeated by 329 votes to 302, setting up “indicative votes” this week to find out what kind of Brexit would have the most support among MP
Potentially as many as seven options will be under discussion in parliament: May’s deal; revocation of Article 50; a second referendum; May’s deal + a customs union: May’s deal + customs + single market; free-trade agreement; or no deal.
The Wall Street Journal last Friday reported that after European Union leaders agreed to extend the deadline by at least two weeks, US investment bank Goldman Sachs cut the chances of Theresa May’s Brexit deal being ratified to 50% from 60% aand has increased the probability of a ‘no-deal’ Brexit to 15% from 5%. The bank has kept its estimated probability of no Brexit at 35%.
