Colin Watkins from Welsh factory relocation and machinery moving expert Trojan-Mek explains why no-deal Brexit could create huge challenges for UK manufacturers 

Trojan-Mek have been involved in factory relocations, heavy transport and machine moving, a specialist field of logistics and transport, for 15 years.  There’s little we don’t know about moving or relocating complex machinery, or even relocating an entire production line overseas.

However, when it comes to what will happen in our industry after Brexit, we have to listen to the experts – and at the moment, if my manufacturing business was contemplating an international factory relocation to tackle the impact of a hard Brexit, pardon the pun, but I’d get moving.

I’m a machinery logistics expert, not a trade negotiator, but Dmitry Grozoubinski is a former Australian trade negotiator who’s worked at the International Centre for Trade and Sustainable Development for the World Trade Organisation.  I’m therefore keen to hear what he has to say about international logistics post-Brexit – and in a recent blog for the London School of Economics and Political Science, he warns that unless something changes between now and March 29, 2019, the EU will cease treating UK logistics firms, transport professionals and drivers as EU Members.

 

Huge potential impact on road transport and free movement of goods

This will have a huge impact on the businesses which rely on smooth road transport between the UK and the European Union – and this is not just a dire warning, these are the rules the EU has formally advised it will apply based on the EU Commission’s Article 50 Preparedness Notices.

While Trojan-Mek do offer a general haulage and HIAB hire service, the bulk of our business comes from heavy machine moving and factory relocations rather than goods transport.  While it will somewhat hamper our international factory relocations, the bulk of our heavy machinery moves are between the Midlands, Wales, South West and other areas of the UK.

 

1224 permits a year – but currently 500 trucks a day

However, our logistics colleagues who specialise in goods haulage, and the manufacturers who use them to export to Europe could be hugely affected.  A hard Brexit is terrifying for logistics operators – there is no automatic right to cross the border.  Post-Brexit, the EU will begin treating the United Kingdom in the exact same manner as it does a World Trade Organization Member – with a permits system.  There is a limit to the amount of truck drivers from countries without a Community Licence to enter the EU every year. For the UK, that limit is 1,224 permits A YEAR. For reference, 500 trucks currently cross into the EU from the UK daily – the UK will have just three days’ worth of permits a year unless a deal can be reached.

Mr Grozoubinski believes that many UK firms will choose to create a permanent presence somewhere in the EU so they can continue to operate smoothly across Europe.  He says that from Day 1 of a no deal Brexit, freight and logistics firms whose ‘Permanent Establishment’ is in the UK will effectively not be allowed to deliver goods within the EU. He therefore advises manufacturers who export to the EU and the logistics operators who serve them to study the Preparatory Notice urgently and thoroughly and take appropriate action.

 

Manufacturers considering EU relocation urged to ‘get moving’

The prospect of no-deal and all it implies is now starting to resonate with managing directors.

We’re seeing an increase in enquiries for businesses who want to relocate machinery and equipment to Europe – and vice versa – to transport plant machinery from EU manufacturing plants to UK production sites – ahead of Brexit, but the truth is, you can’t just ‘pick up and go’, and our concern is that companies may be tempted to bide their time, in the hope that a deal may be reached.

Indeed, it may be, and we hope for British interests that it can be.  However, nothing is certain and in the event of a move, manufacturers need to act fast, as the right of free movement for people, the rules for transporting essential goods and the time taken for customs checks are all under threat of change – and international factory relocations take time anyway.

Added to the short timescales, a number of the local certifications which may be required in the EU take time to acquire and in the event of a no deal Brexit, a flood of applications could overwhelm relevant authorities – meaning that companies could ‘miss the boat’.  Past March 29, you won’t just be able to catch the next one.  Moving to the EU could prove much more difficult and considerably more expensive.

If you are contemplating relocating any part of your manufacturing business or plant machinery to or from the EU, my advice would literally be to get moving and contact our international relocation team today.