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Issue 7 2020 - FBJ Ireland


traffi c will have to continue to


use the landbridge and, of course, there is also the substantial volume of trade that is to and from mainland Britain itself to consider. For many retailers in Ireland, their distribution centre will be somewhere in the UK mainland; for this traffi c there really will be no choice.


Still unresolved is the question


of, in the event of a ‘no deal’, the UK ends up with an ECMT licensing regime for road haulage, which would greatly restrict the number of permits available. That could lead to a situation in which, even if goods were allowed to move, there might not be the trucks to carry them, as FTAI estimates that, under ECMT, there would only be enough licences for 20% of the total traffi c. It is urging the European Commission to draw up a contingency plan to allow trucks to keep operating. Meanwhile, the Irish logistics


industry has to digest the ramifi cations of Covid. FTAI’s offi ces are very close to Dublin Airport and the noticeable quietness that has descended on the area is “quite devastating”, says


Flynn. At the height of the Covid crisis, daily passenger arrivals into Dublin were said to be down to 600, compared with the normal 80,000-plus. While the integrators like UPS,


DHL and FedEx have continued to serve Ireland well, around 75% of Ireland’s air cargo used to be carried as bellyhold and the virtual elimination of this capacity is keenly felt. “We are seeing tiny bits of


recovery now,” says Flynn, “But this is still a very challenging time.” Without a thriving air passenger


industry, cargo cannot prosper either and the same is true of the ro ro ferries, where cars and passengers still make up a substantial proportion of operator profi ts. Indeed, the lack of tourists generally in Ireland will ultimately have an eff ect on the total freight market demand. FTAI members did have


concerns at the outbreak of the Covid crisis about whether they would be able to get goods to shops and while there have had to be compromises, here things haven’t worked out too badly, says Flynn. Indeed, e-commerce has been booming massively, although


bricks-and-mortar retailing has suff ered; Debenhams for instanced closed its doors in Ireland for the last time during the crisis. Now, adds Flynn, the exponential


growth in e-commerce could start to create problems of its own. The advice to ‘book early for Christmas’ has never been more pertinent, as there are no guarantees that the industry will have the capacity to deliver everything in the last few days before the 25th. Another potential squeeze


on capacity on the horizon is


the shipment of the Covid


vaccine; Ireland could be a major manufacturer. However, Flynn believes that the Irish airfreight industry


will fi nd solutions,


whether dedicated cargo fl ights or increased passenger schedules. Ireland has plenty of airport capacity, not only in Dublin, but also the major under-utilised gateway at Shannon, as well as Cork. Indeed, airport capacity in


Dublin is about to get a whole lot larger, at least on paper, with the expected opening of a second runway about this time next year. The project was delayed by the Covid lockdown but has now resumed.


The scheme has however


proved somewhat controversial in the freight industry, as a quid pro quo for the second runway enshrined


in the planning


conditions was a severe reduction in night fl ights, between 23.00 and 07.00. This naturally alarmed the freight industry, as it is heavily dependent on fl ights in the small hours of the morning to get goods to where they are needed. A


joint report produced


by FTAI and York Aviation pointed out: “Night fl ights are central to supporting high value manufacturing exports” with express


freight airlines moving


around 28,500 tonnes on such services. Companies were willing to pay expensive premiums to ensure that goods can be picked up at the end of the working day and delivered quickly to arrive the next day. Freight fl own at night now


accounts for 38% of the total at Dublin airport, around 63% of it being express cargo moving mainly time-sensitive goods. The pharma and healthcare, machinery and transport,


///IRELAND


professional services, e-commerce and even farming and fi sheries are all major users of night services. The report estimated that the


fl ights support around €1.2 billion- worth of annual gross domestic product and around 15,760 jobs. While the current crisis


and consequent decimation of


passenger fl ights might


temporarily release capacity for more cargo fl ights in Dublin, the issue hasn’t gone away. With all the distractions, those


who do not live in Ireland might have overlooked the fact that the country does now have an eff ective government following the three-way split that occurred aſt er February’s general election. One welcome innovation, says Flynn, is that for the fi rst time the freight industry is represented at Cabinet level in the shape of Galway West TD (member of parliament) Hildegarde Naughton who was appointed Minister of State for International and Road Transport and Logistics in June 2020. While, as a ‘super junior’ minister, she does not have voting rights in cabinet, it is a long overdue recognition of the


Logistics managers hard-pressed but


determined to go green


Irish logistics businesses’ overheads costs have risen by 5.9% over the past 12 months, according to the latest edition of The Manager’s Guide to Distribution Costs, published on 8 October. Produced by FTA Ireland (FTAI) in partnership with KPMG, BWG Group, ENPROVA and Analytiqa 2020 it details how the costs of staffi ng, operating vehicles, and haulage rates have


changed in the past year. It surveys managers cross


the haulage, distribution, manufacturing and retail sectors to provides a comprehensive benchmark of average costs. FTAI general manager


Aidan Flynn, said: “Between the disruption of the COVID-19 pandemic and the uncertainty surrounding the end of the Brexit transition period, the


importance of the industry, says Flynn. One issue that the Irish


government might also address is the creation of a fuelling network for alternative LNG and CNG- fuelled trucks. An EU-funded government programme to create a network of 14 such sites is about to come to an end, with just two actually built and a further two agreed by Gas Networks Ireland and fuel retailer Applegreen. The truck technology already


exists and has proven to be eff ective but without places to refuel such vehicles, nothing will be achieved, says Flynn. The most frustrating aspect is that the Irish state through its various arms is a major truck operator itself and should be leading the way in developing green technology and helping Ireland catch up with the rest of Europe. Hildegarde Naughton said in


early October however that the Irish government was setting up a new grant in 2021 that would help bridge the cost diff erential between conventional and alternatively fuelled vehicles.


logistics sector is facing a challenging period. To stay competitive, resilient and profi table in this uncertain economic environment, businesses must have a full understanding of their day-to- day operational costs; this is critical to aid strategic thinking and planning processes.” The report added that


managers were determined to transition to alternative fuels, with 29.4% of respondents considering electrifying their fl eets and 41% considering utilising either LNG (liquid natural gas) or CNG (compressed natural gas) fuels. www.ſt ai.ie/cost-of-distribution


FTA Ireland signs customs deal


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FTA Ireland (FTAI) has signed a partnership with clearance agent Declaron, management consultancy BDO and outsourcing specialist Fexco to manage customs processes and provide end-to-end customs support aſt er Brexit. The service off ers full end-to-end support, interfacing with the relevant authorities to ensure smooth customs clearance, as well as managing the new, stricter sanitary and phytosanitary (SPS) requirements. FTAI general manager Aidan


Flynn said: “Irrespective of the outcome of EU-UK negotiations, from 1 January 2021, the rules of the single market and the


customs union will no longer apply to the UK. A range of customs formalities and other regulatory requirements will be in place for goods that move through, or to and from, Ireland and Britain.” He added:


“The


team at Declaron are among the best customs clearance solution providers in the business; we are looking forward to working with them and making the new customs


requirements


as painless as possible for Irish companies trading with, or through, Britain.” BDO customs and trade partner


Carol Lynch, commented: “With only 15 weeks to go until the big


day, we’d strongly recommend Irish businesses put in place a timeline and ensure all applications for customs authorisations are submitted by the end of this month. Businesses need to be sure they’ve agreed their delivery terms with customers and suppliers, have a high-quality customs agent, and arranged customs training on the information required to complete declarations. We’ve built Declaron with these challenges in mind, so your dedicated person doesn’t need to be a complete expert in customs - our system takes a lot of the stress out and gives your business peace of mind.”


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