Written evidence submitted by the Centre for European Studies, Canterbury Christ Church University (FAB0009)

 

Executive Summary

 

 

Introduction

 

  1. Since the EU Referendum in June 2016, attention has been directed towards the impact Brexit will have on Ireland, largely due to the historic troubles that have occurred. However, whereas the Ireland-Northern Ireland border has approximately 275 crossing points, the county of Kent has 4 (Dover, Ramsgate, Folkestone and Sheerness). Yet, Kent accounts for approximately one third of Britain’s trade in goods with the world, the majority of which travels through the Port of Dover and Channel Tunnel.

 

  1. Owing to the geographical constraints that exist, Brexit will have a profound effect on Kent, and in particular, freight. It is therefore important that the Committee understands the nature of what we at CEFEUS call the ‘Kent Imperative’: i.e. challenges arising from Brexit currently facing Kent as a frontline county that are strategic in terms of impact and critical in terms of preparation time.

 

 

  1. Lastly, this submission provides a range of policy suggestions to limit problems and suggest response. The focus of the Committee’s enquiry should therefore not simply be on freight operators and their customers, but also on the wider socio-economic impacts of freight upon Kent, as a ‘frontline’ county.

 

The Kent Imperative

 

  1. The county of Kent is home to 1.8 million people and a key locale for the majority of British imports and exports. Kent hosts three ports: The Port of Dover, the Port of Ramsgate and the Ports of Sheerness, in addition to the Folkestone Channel Tunnel link to les Coquelles (Pas-de-Calais).

 

  1. Taken together, the Port of Dover and Channel Tunnel account for approximately one third of Britain’s trade in goods. It is estimated that 16,000 HGVs enter through these two entry points every day, with lorries spending approximately one fourth of their entire UK journey in Kent. In addition, the county has two major routes leading from the ports through to the M25: the M20 and A2. Freight vehicles represent 41% of all vehicles on the Kent M20/A20 and M2/A2, with the vast majority of these simply passing through Kent to destinations elsewhere in the UK (Kent County Council, 2017, 4).

 

  1. The issues of HGVs in Kent has become increasingly problematic. The decision by French port workers in the summer of 2015 to strike resulted in Operation Stack being enforced here in Kent for 32 days, with extended stretches of the M20 closed down. The economic effect of Operation Stack was devastating. Kent’s economy alone was negatively impacted by £1.5 million each day of the operation, whilst the UK economy as a whole took a daily hit of £250 million. As this and other operations have demonstrated, minor, small-scale traffic problems escalate quickly with far-reaching impacts both county and country-wide. Based on our own research, these and other problems are already beginning to deter investors in Kent, many of whom are “questioning the long-term viability of remaining in Kent” (CEFEUS Interview 2018).

 

  1. In 2016-17, 88% of foreign HGVs entering the UK did so via the Channel Strait. For the year 2017-18, more vehicles travelled through the Port of Dover than all remaining UK ports combined, compromising of approximately 2 million vehicles (57% in total) (Department for Transport A, 2018, pg.4). In total, the Channel Tunnel and Port of Dover accounted for 4.2 million HGVs in 2016 in addition to 23 million passengers. Based on Department for Transport estimates that place HGVs volumes increasing by 43% by 2035, the Port of Dover would be expected to handle 3.8 million HGVs.

 

  1. Both the Channel Tunnel and the Port of Dover have ambitions to grow. Channel Tunnel is expecting growth to increase by up to 30% in the next five years, whereas the Port of Dover estimates growth at 2-4% during the same period.

 

The Port of Dover

 

  1. The Port of Dover handles £122 billion worth of goods annually, representing 17% of the UK’s entire trade in goods, where 99% of transport is via ‘roll-on, roll-off’ (roro) ferries. The Port of Dover is considered to be both the busiest Roro Port in Europe, and the busiest passenger port in the UK (Oxera, 2016, pg.1). During peak hours, the Port of Dover handles approximately 400-500 freight vehicles per hour outbound, averaging 10,000 HGVs a day (Port of Dover, 2017, pg.1). Currently, EU trucks account for 99% of freight traffic, with ferry crossing times are roughly 90 minutes.

 

The Channel Tunnel

 

  1. The Channel Tunnel also handles approximately £120 billion worth of trade and 1.6 million HGVs per annum (The Guardian A, 2018), equating to roughly 6,000 HGVs daily. A substantial amount of freight that moves through the Channel Tunnel is considered part of the ‘just-in-time’ supply chain, where speed is of the essence. The tunnel’s journey time is roughly 35-40 minutes, serviced by Eurotunnel’s fleet of 15 shuttles, with up to six running per hour (Kent County Council, 2017, pg.8). The largest product by value that travels through the Channel Tunnel is postal and courier freight, valued at £21.5 billion, and food goods, valued at approximately £9.2 billion (Ernst and Young, 2018, pg.10). In 2016, approximately 30% of food consumed in the UK was imported from the EU, with 49% produced domestically.

 

  1. Many EU HGV drivers need to take a break once they reach the UK, via Dover or Folkestone. This can have profound consequences in logistical terms however, with over 1,000 lorries are estimated to be parked in key non-designated parking areas in the county, with designated lorry parks already at capacity. Kent differs in this respect from Belgium and France, where there are parking facilities every 20/30km on motorways.

 

Brexit Issues

 

 

  1. Britain’s departure from the European Union will likely further frustrate these issues and therefore it is important to address the root causes of a range of 3 anticipated problems: (1) bottlenecks at the ports, (2) overcapacity of HGVs on Kent roads, particularly on the M20 and A2, (3) and increased non-designated parking, rather than the symptoms alone.

 

(a)   Bottlenecks at Kent’s Ports

 

  1. As outlined above, the Port of Dover alone accounts for approximately 10,000 HGVs per day, the equivalent of an 180,000km queue. Due to the limited space (i.e. the port can only accommodate fewer than 1,500 HGVs plus tourist traffic at any one time), the Port of Dover must turn over the equivalent of its entire holding space 5-6 times a day, in contrast to container ports which does so only every 5-6 days (Port of Dover, 2017, pg.1).

 

  1. Currently, the Port of Dover takes approximately two minutes to process EU HGVs, and between 20-45 minutes to process a non-EU HGV. An increase in customs processing times will result in delays for HGVs, which in turn will cause a build of vehicles as they await processing. This presents a danger to the Port due to its limited capacity and will likely cause queues throughout Kent.

 

 

  1. The Port of Dover estimates that the addition of a mere two minutes to the current processing time of EU HGVs to each vehicle (whether UK or EU) could cause queues of up to 17 miles on both sides of the Channel, in addition to the likelihood of Operation Stack being enforced once a week (Port of Dover, 2017, pg.2).

 

  1. Further, Jean-Marc Puissesseau, Director of the Port of Calais, recently stressed the probability of queues up to 30 miles on the French side due to necessary customs and sanitary checks for both UK and EU HGVs in the absence of a UK-EU customs deal (The Guardian B, 2018).  With two thirds of Irish exports to the EU also travelling via Britain, (Oxera, 2017, pg.1), bottlenecks are clearly not merely a British problem (see Appendix 4), but highly impactful on its neighbours.

 

  1. What is problematic is the complete lack of a Brexit-specific plan for Dover, to assist the port, and its users. A recent survey by the British Chamber of Commerce for instance revealed that 67% of respondents did not anticipate changing the UK port they currently use for their operations, with 33% currently not planning for additional checks and declarations between the UK and the EU (British Chambers of Commerce, 2018, pg.1).

 

 

(b)   HGV overcapacity on Kent Roads

 

  1. In recent weeks, Highways England and the Department for Transport have unveiled plans for an alternative to Operation Stack, entitled Operation Brock. The proposed scheme involves the coast-bound side of the M20 between Junctions 8 and 9 serving as a temporary lorry park for up 2,000 HGVs. In turn, the London-bound side would adopt a contraflow system, with two directions either way and a speed reduction to 50mph. The measures would run for approximately 13 miles between Junctions 8 and 9.

 

  1. Whilst Operation Brock is generally seen as a more positive alternative to Operation Stack, it stills brings serious repercussions for the county and is considered only a temporary measure, and not an answer to the enormous logistical strains arising from customs-induced bottlenecks at Kent ports (above) and increased HGV parking on Kent’s roads (below). The Port of Dover also suggest that Operation Stack may also have to be enforced once a week (Port of Dover, 2017, pg.2).

 

 

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  1. It is important to consider both the direct and indirect impacts of freight on Kent’s highways. Delays to HGVs will not only cause serious congestion in the cities and towns connected to the arterial roads across Kent, but go on to cause delays to urban and rural locations across the country, impacting communities and businesses alike. In particular, as we recently investigated, the healthcare sector faces serious risks[1]: delays in travel on roads to Kent hospitals and clinics could impair the ability to adequately reach and/or treat patients, especially during emergencies. Further, the UK is currently highly dependent on key healthcare items, such as medical isotopes. The notorious half-life span of isotopes (and the sensitive nature of medicines and medical hardware) runs a very real risk that delays, small or large, will severely impair the quality of the product, and undermine in material terms the subsequent treatment of patients, including cancer-sufferers.

 

  1. The resulting pollution arising from the semi-permanent queuing of HGVs will also be highly detrimental for the environmental standards of the county as a whole. Lastly, it is worth noting the increased damage the average HGV causes to Kent’s roads network in comparison to the average car, which has been suggested to be as much as 136,000 times more (Campaign for Better Transport, 2018).

 

 

(c ) Increased non-designated HGV Parking

  1. In 2015, the then Chancellor of the Exchequer George Osborne unveiled £250 million to be spent on the construction of a lorry park in Stanford, Kent with capacity for around 3,600 vehicles. However, this was subsequently scrapped in November 2017 following intense campaigning by locals, with the Government yet to reveal what they intend to do going forward to meet the needs of HGVs in the county.

 

Freight-Related Legislation

 

  1. In the last 6 months, it has become clear that licensing to drive HGVs will likely change post-Brexit. Currently, EU drivers are able to use a single permit for trips between all EU Member States 28 with a Community Licence, issued by the European Commission. While the EU has been clear that they do not expect this to continue, it should be noted that EFTA member states (Iceland, Lichtenstein, Norway, Switzerland) also use Community Licences, suggesting that a UK inclusion could be a possibility.

 

  1. From a UK perspective, Parliament is currently debating the ‘Road Permits and Trailer Registration’ Bill as proposed by the Secretary of State for Transport.[2] The consultation note released by the Department of Transport in May 2018 for instance appears to accept that UK freight operators will need permits to operate within the European Union post-withdrawal date (Department for Transport C, 2018, pg.9). This follows on from the European Commission, who made clear in January that there will be substantially more paperwork involved for freight operators. This includes UK-issued ‘certificates of professional competence’ no longer being recognised, the need for ‘driver attestations’ for third states, lack of recognition of driving licences at EU level (instead, state-by-state) and finally loss of access to the EU’s internal road haulage market (European Commission 2018, pg.1-3). Finally, the UK’s withdrawal from the European Union will also bring question marks over its access to EEA (Norway, Lichtenstein, Iceland) states and Switzerland over freight, which have agreements with the EU.

 

  1. In terms of road transportation agreements, Britain will likely need to negotiate bilateral agreements with each EU member state post-Brexit, regardless of the economic model it chooses to adopt with the European Union. The Treaty of Lisbon allows the individual member states to negotiate international road transportation agreements with third (IKV Brief, 2017, pg.7). However, as with Turkey, which has a partial Customs Union with the EU, this is far from assured; Turkey itself currently has 25 bilateral agreements covering road transportation (with Cyprus, Ireland and Malta being the exceptions).

 

  1. Finally, Kent County Council Trading Standards have stated that they expected checks at Dover to increase from around two a month to two a day in order to prevent counterfeit goods entering the UK. This would represent an annual rise in checks from 24 to 730 (Kent Online, 2018). This in turn could place a heavy burden on freight transportation, as goods are impounded for around a day whilst checked, which could disturb logistic planning. As above, there is also real as to whether Dover has anywhere near the required capacity to carry out the required checks and impounding services.

 

Policy Suggestions

 

  1. Kent-Specific Brexit Bill: As outlined, Brexit may likely have a far more a profound effect on the county of Kent, at least initially, than any other location in England. ‘Kent Imperatives’ therefore represent challenges arising from Brexit currently facing Kent as a frontline county that are strategic in terms of impact and critical in terms of preparation time. While a range of issues arising from Brexit will ultimately impact on the county, freight  - and its related issues of customs, logistics, safety, security, and the guaranteed supply and sale of key goods represent the most critical Kent Imperatives at this time.

 

  1. From this perspective, a legislative bill addressing in sequential fashion the Brexit-specific Kent Imperatives, and freight is a reasonable place to begin. The hierarchy of freight begins with the triad of issues that will become acute in the short-term: (1) bottlenecks at the ports, (2) overcapacity of HGVs on Kent roads, particularly on the M20 and A2, (3) and increased non-designated parking. These lead on to decisions to take advantage of medium-term issues including related infrastructural projects, funding, priority status for goods of national importance and easing of legislative burdens. Infrastructure projects would be crucial additions that are necessary to mitigate the increased ‘friction’ across Kent, such as the duelling of the A2 into Dover, increased used of rail freight and optimising improvements around the proposed Lower Thames Crossing.

 

 

  1. At a minimum, the creation of a Kent-specific inter-ministerial strategic group working from DEXEU, and in direct cooperation with Kent County Council should be swiftly put in place.

 

 

  1. Common Transit Convention (CTC): The committee should look into the advantages of signing up to the CTC, which could allow freight to move freely until reaching its final destination, with HGVs making necessary declarations and tariffs at the final destination rather than initiating location. Properly implemented, the CTC could allow the UK to trade freely with non-EU states, and possibly implemented as part of a customs regime agreed with the EU itself, allowing goods to move with reduced delays, and reducing the burden on ports and ancillary infrastructure.  The Government outlined this as an option under the ‘highly streamlined customs arrangement’ in the August 2017 position paper on Customs (HM Government, 2017, pg.8). 

 

  1. Redirection of Goods: It is also clear that greater thought needs to be placed on how to handle the customs process post-Brexit, in particular as this will have a direct impact on freight. Several reports have indicated that the average HGV’s final destination is in the Midlands, and this is often reflected in surveys on construction of infrastructure such as the Lower Thames Crossing. Under the assumption that Britain leaves the Single Market and Customs Union, checks will have to take place, and will likely increase the burden on Kent.

 

  1. Therefore, at least during times of increased or prolonged overcapacity, the Government should consider the rationalisation / redirection of freight based on strategic requirements. Just in Time goods (perishable and degradable) including medical isotopes, medical equipment, dairy, vegetables and fruit, and key components within extended supply chains (e.g. automotive and aeronautical) go via Ken. Non-time bound goods could be rerouted (at least temporarily) to alternative ports such as Felixstowe and Hull. However, it is important that any solution found in the UK is applied equally to Calais and Dunkirk, due to the ‘closed loop’ system that operates.

 

  1. Priority Permits: To supplement the redirection of goods, whether temporarily or permanent, priority permits could be considered for freight companies carrying goods of strategic importance. Equally, this same logic could be expanded to incorporate special lanes at ports, faster processing time at customs or even waving through checks; subject to capacity at existing ports.

 

  1. Increase Capacity of Other Ports: Whilst the Port of Dover and Eurotunnel will likely continue to dominate Britain’s freight market, it is important to incentivise alternative ports such as the Ramsgate and Sheerness by encouraging them to increase capacity, in addition to non-Kent options such as Newhaven and Poole. This can be done either by reducing tax obligations such as business rates, which in turn will provide a discount to freight operators, or the creation of free-ports for areas that are particularly deprived.

 

 


 

  1. Operation Brock: Consultation with key stakeholders across Kent to ensure that vital feedback is provided on the proposed alternative to Operation Stack.. The day before the temporary measure was unveiled, Paul Carter, the Leader of Kent County Council, stated the following: Should traffic flow be disrupted due to delays at the port for any reason, the M20 and M2 must be kept open in both directions at all times. This will require timely decisions and appropriate investment by the government (Kent Online B, 2018).

 

 

  1. Lorry Parks: It has been identified by the Government that additional lorry parks are necessary to relieve the burden on the county. However, the preference to build one big lorry park in Kent is illogical and inconsistent in comparison to our European counterparts, and would continue to place an unnecessary burden on the county. In consultation with Kent County Council, Kent Police and other key stakeholders, we would propose a series of lorry parks around the country with the use of smart technology on motorways to encourage drivers to stop before reaching the county.

 

  1. In addition, the currently converted Manston Airport is seen as a short-term solution brought in after Operation Stack in July 2015, largely due to the poor roads that lead to it and its geographic location in relation to the ports.

 

 

Conclusion

 

  1. The issue of freight after Brexit affect 1.8 million Kent residents, approximately 75,000 business and will have a serious bearing on future investment and regeneration in the area. Further, the whole of the UK economy depends on the road infrastructure of this region for the timely provision of goods and services in a manner that may bring repercussions if not adequately addressed. If the issues raised in this submission are not suitably addressed by the Government in the coming months, freight threatens the UK’s future prosperity potentially as much as any other “Brexit” issue.

 

June 2018

 

 


References

British Chambers of Commerce (2018) BCC: Business can’t rely on just-in-time Brexit preparation [Online]. Available at: http://www.britishchambers.org.uk/Infrastructure%20Survey%20Part%201%20-%20Port%20Infrastructure.pdf (Accessed: 24th May 2018).

Campaign for Better Transport (2018) Flawed report uses out-of-date figures to falsely claim HGVs pay for the damage they cause [Online]. Available at: https://bettertransport.org.uk/media/20-march-2018-FTA-false-claims (Accessed: 5th June 2018)

Department for Transport A (2018) Road goods vehicles travelling to Europe: April 2017 to March 2018 [Online]. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/707540/roro-april-2017-to-march-2018.pdf (Accessed: 25th May 2018)

Department for Transport B (2018) National Survey of Lorries [Online]. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/707123/national-survey-of-lorry-parking-report.pdf (Accessed: 20th May 2018)

Department for Transport C (2018) Provisions in the Haulage Permits and Trailer Registration Bill

Consultation [Online]. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/707469/haulage-permits-and-trailer-registration-consultation.pdf

Ernst and Young (2018) Economic Footprint of the Channel Tunnel in the EU: An analysis of the value
of trade travelling through the Channel Tunnel between the UK and EU countries [Online]. Available at:
https://www.getlinkgroup.com/uploadedFiles/assets-uk/the-channel-tunnel/180604-EY-Channel-Tunnel-Footprint-Report.pdf

HM Government (2017) Future Customs Arrangements: A Future Partnership Paper [Online]. Available at: https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/637748/Future_customs_arrangements_-_a_future_partnership_paper.pdf (Accessed: 24th May 2018)

IKV Brief (2018) The Quota Issue of the Turkish Road Transport Sector in the EU [Online]. Available at: https://www.ikv.org.tr/images/files/brief(1).pdf (Accessed: 25th May 2018)

Kent County Council (2017) Freight Action Plan for Kent [Online]. Available at: https://www.kent.gov.uk/__data/assets/pdf_file/0012/6105/Freight-action-plan.pdf (Retrieved: 21st May 2018)

Kent Online A (2018) Trading Standards chiefs warn of rise in checks post Brexit [Online]. Available at: http://www.kentonline.co.uk/kent/news/huge-rise-in-border-checks-161366/ (Retrieved: 12th March 2018)

Kent Online B (2018) Brexit: Government must hold on to commitment of frictionless trade [Online]. Available at: http://www.kentonline.co.uk/kent/news/carter-keep-to-your-frictionless-trade-promise-183165/ (Retrieved: 21st May 2018)

Oxera (2016) The Port of Dover ferry operation is of major economic importance to the UK economy [Online]. Available at: http://www.doverport.co.uk/administrator/tinymce/source/Oxera%20Port%20of%20Dover%20infographic%20v10.pdf (Retrieved: 23rd May 2018)

Oxera (2017) Brexit: The implications for ports [Online]. Available at: https://www.oxera.com/getmedia/f2e7736b-357d-4833-a647-898f1116f29f/Brexit-Implications-for-ports_1.pdf.aspx?ext=.pdf (Accessed: 24th May 2018)

Port of Dover (2017), Written evidence to the Public Accounts Committee on ‘Brexit and the future of Customs’ [Online]. Available at: http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/brexit-and-the-future-of-customs/written/71385.pdf) (Retrieved: 24th May 2018).

The Guardian A (2018) Eurotunnel warns on Tory plans for post-Brexit customs [Online]. Available at: https://www.theguardian.com/politics/2018/may/27/eurotunnel-tory-brexit-customs-union (Retrieved: 27th May 2018)

The Guardian B (2018) Calais after Brexit ‘could be 10 times worse than Irish border’ [Online]. Available at: https://www.theguardian.com/world/2018/mar/08/customs-checks-will-cause-huge-tailbacks-warns-calais-port-boss (Retrieved: 19th March 2018)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Appendix 1

 

 [3]

 

 

 

 

 

 

 

 

 

 

Appendix 2

 

 [4]

 

 

 

 

 

 

 

 

Appendix 3