NZ exporters urged to ready for 'no deal' Brexit as UK warehouses hit capacity

Saturday, 9 February 2019

The British government tested a plan to park waiting trucks on the M20 in the event of a 'no deal' Brexit last month.

New Zealand Trade & Enterprise will hold seminars for Kiwi businesses concerned about Brexit next week, but ExportNZ executive director Catherine Beard says exporters that haven't already planned ahead may have left it late.

Kiwi exporters are on the frontline of Brexit planning because of New Zealand's distance from the UK.

Britain might have no choice but to open its borders, ExportNZ executive director Catherine Beard has speculated.

While Britain won't leave the European Union before March 29, companies around the world are having to second-guess how supplies that they ship to the UK ahead of that date could be treated if they arrived after a 'no deal'.

Beard said she had heard reports of exporters resorting to building up stores of products in homes and garages in the UK as Britain's warehouses fill up with stockpiled goods.

NZTE and Customs are urging Kiwi exporters to prepare for the outcome that wasn't supposed to happen.

* Explainer: Everything you need to know about Brexit

* Brexit poses risks for Kiwi exporters in both Britain and the EU**

A survey by the UK Warehousing Association late last month found almost all its members had received Brexit-related queries from customers and three-quarters reported their warehouses were now full and that they were unable to take on new customers.

The UK association said the British warehousing and logistics industries were facing a 'perfect storm' and described the prospect of a 'no deal' Brexit as catastrophic.

Beard said there was a lot of uncertainty, including about tariffs.

But she speculated it was possible Britain would have no choice but to open its borders in the event it crashed out of the EU without a deal, because of the logistical issues it would otherwise face.

'You might reach the point where you just have to open the borders anyway. What sort of level of pragmatism will be brought to bear when talking about food and medicine?'

Beard believed many Kiwi exporters had been planning ahead by building up stock in the UK over the past few months.

'There has definitely been forward-planning going on and, if you left it to the next four weeks, you might find you are struggling to find spaces to store goods.'

One positive was that Kiwi exporters of perishable agricultural commodities had quite a lot of experience of re-routing produce in transit to take advantage of changes in commodity prices, she said.

But Beard said businesses might want to ensure they were aware of what their insurances policies might cover in the event that goods were held up on the UK wharves.

'Everyone has to work out what their risk appetite is.'

The Insurance Council has been approached for comment.

NZTE's seminars will be held in Auckland, Wellington and Christchurch between Tuesday and Thursday, and online.

Representatives from the Ministry of Foreign Affairs and Trade, the Ministry for Primary Industries, and the Customs Service will provide updates on developments in the UK and on how firms can prepare for Brexit.

NZTE said companies should be considering the potential for a 'no deal' outcome.

'The possible effect of Brexit will be different for each business but preparing now for any scenario will enable companies to be ready to take-action and adapt to any outcome.'

Customs has suggested exporters should consider seeking legal advice or engaging 'a migration agent, customs broker, freight forwarder or logistics provider' to prepare them for Brexit 'including a 'no deal' scenario'.