14 reduce >> 12 Brexit


Issue 1 2020 - FBJ Ireland the burden for DSV. The


company has been at the forefront of the industry in developing robotics that


can


‘scrape’ information out of customers’ documentation such as commercial invoices and input it into customs clearance systems.


It has three business


change managers at its Irish headquarters at Naas, near Dublin working on technological fixes. But while DSV Road is as


well-prepared as any company can be for Brexit, its


trucks


could of course still get stuck behind others that have no such advantages if congestion in and around the ports becomes a major issue. DSV Road’s network could


still take on more traffic but Thygesen


says that more


automation will be needed in order to do this. There is no point in increasing traffic if it means increasing the headcount and costs proportionately, should it even be possible to find the extra personnel in Ireland’s tight labour market. “There’s no point in adding to staff, and costs, in a business where margins are


///IRELAND


system, including groupage and part loads get different systems to ‘talk’ to each other through API technology and the like. The idea, says Thygesen,


thin and labour costs are very high. And we also wouldn’t want to recruit people just to do routine data entry work; people these days have much high expectations that work should


be fulfilling.” Here again, tech could come


to the rescue. “We are working very closely with all our hauliers to get them onto our app, which can track goods throughout our


is to replicate in the business to business world the sort of traceability that has now become commonplace in business to consumer transactions on the likes of Amazon. “The freight industry has been very conservative, and there are issues, but I think we will see a big leap forward this year.” DSV Road has an impressive


footprint at Naas Enterprise Park, in County Kildare, about 30 miles


Brexit could necessitate a complete rethink of Ireland’s supply chain, says Mick Curran of the Chartered Institute of Logistics and Transport (CILT). This could extend to rescheduling the pattern of ferries into Dublin, Ireland’s main port but also its largest and most congested city. At the moment, four ferries arrive within two hours of each other in the morning, disgorging anything up to 800 trucks onto Dublin’s streets and motorways, at the same time that the commuter peak is getting underway. The situation is difficult


enough at the moment, but, says Curran: “If, after Brexit, a proportion of those trucks are delayed after receiving amber or red lights from customs, the effects on congestion could be truly frightening. “It could well be, he adds, that hauliers will


perceive the benefits of leaving the ferries before or after the busiest time of day, so the ferry companies could adjust their schedules in response to market forces. A spokesman for a leading Irish Sea ferry operator responded cautiously to the suggestion, saying that current schedules had stood the test of time and were popular with customers. However, if congestion was to worsen significantly, varying arrival times might have commercial benefits. But he added: “We’re certainly not at that situation currently.” But there is no doubt that


Brexit will lead to higher costs in the shops. It may no longer possible for a ferry to arrive in Dublin in the early hours and the goods to be on the shelves by 9am as at present. The €8 box of cornflakes is


an uncomfortably realistic prospect, says Curran. CILT is also encouraging to continue its


the industry


efforts to train more people in customs matters. In Ireland, unlike


the UK, there has


been a greater willingness among traders to do their own clearances – and also fewer practical obstacles to them doing so, as there is no need to obtain customs ‘badges’ or access port community systems – and Curran would encourage small traders with, say, a couple of pallets a week of the same commodity to do their own clearances without using a broker. But for complex consignments with tens of thousands of stock-keeping units and different commodity codes it is a different matter and here the services of a broker or forwarder will be needed – should it be possible


Dublin port changes land forwarders with added costs


The decision by the port of Dublin to move empty container storage from the operational area to remote yards on the fringes of the city has thrust extra costs onto shippers and their forwarders, says Gerald Kiernan, national sales manager at the Dublin office of German forwarder A.Hardrodt. The move has led to a


lot of extra road


transport, as hauliers must now incorporate extra journey legs to and from empty container


yards well outside the city into their schedules. The issue particularly affects


20-foot deepsea boxes, says Kiernan. The 40’ boxes are in heavy demand for Irish export traffic and the port is happy enough to keep these in port for the usually short period before they are reloaded. The issue doesn’t affect short-sea boxes either. While it is possible to ask the


shipping line to arrange the haulage, forwarders in Ireland


prefer to have the flexibility of arranging their own transport; the hauliers they habitually use are flexible, whereas line haulage may not be quite so accommodating. In any case, if haulage costs are being driven up, that will no doubt be reflected in lines’ haulage rates at some point. There may well be good


logistical arguments for the port shifting the empty box yards to the city periphery but it should be recognised that it


to find one after Brexit when, according to some estimates, the number of customs clearances in Ireland could mushroom from 1.6 million a year to perhaps 20 million. The parcels industry could


face similar problems, although they do at least have customs capacity available in house. If the trade asks hauliers


to sort out customs issues there will be similar issues, says Curran. “The big firms will somehow find some extra capacity, but the average fleet size in Ireland is 3½ trucks and those operators won’t have the wherewithal to do it, especially if they’re delivering groupage,” The forwarding industry has


also struggled to cope. Some firms did in fact recruit extra staff ahead of last year’s Brexit deadlines but have reportedly had to let them go again as the negotiations dragged on.


has imposed an extra cost in fuel and driver time which the trade is being asked to absorb, and many people are none too happy about it. Other shipping costs have


also been on the rise, Kiernan continues, notably the new IMO sulphur surcharge, which applied in Irish waters from the beginning of 2020. The effects have been particularly severe on the South American and Australasian trades, which have seen increases of $200 per teu, which many of Hardrodt’s wine trade customers have balked at. “In fact, many of our clients are aghast at the rise,” says Kiernan. “Many of them can’t


vanishingly small amount of time in which to sort these issues out, with barely ten months to go until the UK’s official departure from the EU. But there is significantly less than that, taking into account the taken by the EU and its member states to sign things off. There still has been no official word on how exactly the new regime will operate or, for that matter, the nature and ‘hardness’ of the Brexit that the UK will eventually perform. However, Curran does detect a stiffening in attitudes on both the UK and EU sides, so a hard Brexit cannot be ruled out by any means. Perhaps, he says, it is


time for politicians to stop grandstanding over Brexit and put practical people, like freight forwarders, around a table to devise systems that would actually make Brexit work. Part of the solution for


Ireland could be greater use of direct routes to the Continent, for ro ro and lo lo, Curran believes. “There are already


pass the cost on to the retailer.” He adds: “We’re kicking back


against it as best we can. One or two shipping lines are being a bit more flexible, lines that we perhaps haven’t dealt with too much in the past.” Business in Ireland has


lately been reasonably strong, Kiernan adds. However, there is still great uncertainty ahead including Brexit and, now, the corona virus which is sure to affect imports and exports to China. Hardrodt’s offices in China had, in mid-February, only just gone back to work after the extended Chinese New Year shutdown and loadings have been postponed


from central Dublin. Thygesen is mindful that, together with its DSV Solutions arm, DSV Road now occupies three large buildings which can necessitate shuttling freight between them. Ideally, he would like a single large building that could accommodate both the Road and Solutions arms, if one can be obtained at an acceptable cost. However, Thygesen has no


desire to move from Country Kildare where the company has built up a loyal workforce. Costs are reasonable by Dublin region standards and it is within easy reach of the city and its port.


There is of course a some short sea container


services which are as fast as ro ro, though they don’t have much capacity at the moment, and they’re approximately half the price.” It will take shippers some time to change their operations to handle boxes rather than trailers – which is what has probably inhibited uptake so far – but


Brexit-


related issues could provide just the incentive for them to do so. Curran says: “I think we will


see more ships serving the route, that demand will follow. However, shipping


at the


moment is very Dublin-centric, so if container traffic is going to grow, it will probably be ports in the south-east.” All in all, Brexit will force the


supply chain and operators to become more streamlined. In an industry where margins are already tight, that could the larger logistics companies investing in more systems and software and the smaller ones unable to do so either being squeezed


out or becoming


subcontractors to the bigger ones.


and had only recently been restarted. However, there were early signs of equipment shortages as a result of the outbreak, not to mention the spate of


severe weather in


Europe. “The Irish economy is doing


well at the moment,” states Kiernan. “However, the issues haven’t gone away, and nor has Brexit. It is a problem for our customers, although we have a very good customs team that we could expand if it becomes a major problem. I’d like to think that common sense will prevail – because if we end up with queues at the ports, we’re all in trouble.”


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