Export and import activity between the UK and France has dropped some 20% since the start of the year as businesses on both sides of The Channel continue to struggle against Brexit disruption.

According to the French customs office, exports from France into the UK fell 13% in January compared to the previous six-month average, whilst exports from the UK into France dropped 20%.

Whilst some pandemic-related ground has been recovered, especially as firms on both sides stockpiled critical components and goods, Brexit uncertainty and new friction-creating barriers has hampered that volume recovery. Meanwhile, French exports and imports with other nations increased. 

And despite the trade deal, higher shipping costs, health certificate requirements, complex customs requirements and transportation delays have all contributed to increased commercial costs and reduced activity. 

Activity isn’t only down between the UK and France either. A more marked 30% downturn can be seen in German exports to the UK – a continued decline that began after the Brexit referendum in 2016. The steepest declines have been in Italy, with a 38% fall in exports to the UK and a 70% drop in imports. 

Read more: Half of UK exporters struggling to adapt to Brexit changes

Gullies Moec, chief economist at Axa commented that: “I have a hard time deciding what is the impact of Brexit and what is simply down to the impact of coronavirus.

“There were so many stories about companies that had trouble exporting or importing after Brexit and a lot of hauliers were reluctant to deal with the customs issues, so there must have been an impact.”

If your business has been impacted, we can help

Go Exporting has already helped a number of companies both prepare for Brexit, and now workaround new restrictions, regulations and challenges. 

Our Brexit FastTrack service offers a detailed review of businesses post-Brexit to help resolve the issues they’re encountering – with a quick turnaround and at a fixed price. 

Some firms may also be able to reclaim the cost of this service via the SME Brexit Support Fund.  

The Government has launched a new initiative aiming to boost exports of food and drink internationally for UK farmers. 

Called the ‘Open Doors’ campaign, the initiative will focus on growing middle-class markets including in Asia. 

The scheme will be welcome news for UK producers, many of whom have struggled since January 1st exporting food products into the EU. 

International trade secretary, Liz Truss, said of the launch of the scheme: “Our farmers need access to new markets around the world, but we need to get rid of the barriers holding them back. We will help you get out into the global market.

“Exporting supports higher wages, productivity, and high-quality jobs, but one in five of our food manufacturers export. We want to unleash the potential of many more businesses, which is why I am glad today to announce a new export campaign for British food and drink.”

She continued: “We are dubbing this our Open Doors campaign, reflecting the work we are doing to open new doors for farmers and food producers to unprecedented opportunities across the world. We need to look beyond our shores. By the end of this decade, 66% of the world’s middle-class consumers are expected to be found in Asia.

Read more: SMEs can now apply for grants to cover the cost of professional export consultancy

“They are hungry for top-quality food and drink, where they know – from farm to fork – that high standards have been at the heart.”

If your business is still working to adapt and change to the new trading relationship with the EU, we can help. Our Brexit FastTrack service can deliver a detailed review of your business post-Brexit to resolve the issues you are encountering. 

Learn more here.

The volume of exports heading into the EU from British ports has fallen almost 70% as the immediate realities of Brexit take hold. 

The data, compiled by the Road Haulage Association, compared exports data via ferry and rail onto the continent in January this year compared to 2020. A letter from the association to Michael Gove stated that recent warnings before the end of the transition period, especially around the lack of customs officials, had been largely ignored, despite a new mountain of paperwork. 

It said that the shortfall in exports was largely due to EU vehicles returning empty as UK companies had either temporarily or permanently halted exports to the EU.

RHA chief executive Richard Burnett said of Gove that: “Michael Gove is the master of extracting information from you and giving nothing back. He responds on WhatsApp and says he got the letter but no written response comes. 

“Pretty much every time we have written over the last six months he has not responded in writing. He tends to get officials to start working on things. But the responses are a complete waste of time because they don’t listen to what the issues were that we raised in the first place.”

Whilst a combination of Brexit and the pandemic will have led to some reduction in exporting activity, trade experts fear that worse could be over the horizon. 

Chief executive of the Cold Chain Federation, Shane Brennan, noted that: “As we look to April through to July what really worries me is we face a perfect storm.

“We will have an economy looking to come out of lockdown at the same time as the UK is imposing a range of import controls on EU business that may be no more prepared than UK businesses have been – and possibly less so – and a supply chain that is incredibly reluctant to service the UK. The full Brexit crisis that we were predicting could well come into effect at that point.”

Read more: Survey shows majority of UK SMEs aren’t expecting EU trade slowdown following Brexit

The news of the sudden drop in exports to the EU comes as hundreds of companies make moves to switch operations to countries inside the EU. 

Reported by The Observer, data from the Netherlands Foreign Investment Agency reported that by January 1st this year, over 500 businesses with UK connection had already made inroads into setting up branches, depots or warehouses in the Netherlands alone. The majority cited ‘Brexit-related reasons’. 

A new survey has shown the positive mindset of UK SMEs in the wake of Brexit, with the majority of small firms saying they don’t expect trade with the EU to shrink in the coming years. 

Conducted by Politico, the survey found that 62% of small and medium business directs don’t expect their trade with the EU to slow down, though manufacturers say it’s too early to tell whether leaving the bloc will be good or bad for their prospects. 

Whilst combined figures show a positive mindset, there are more SMEs who expect trade to shrink rather than grow. Thirty-eight per cent said they expected some fall in orders compared to 23% who expect growth. 

This sentiment is mirrored by The Engineer’s poll of British firms, with 41% saying it’s too early to tell, 31% saying Brexit will cause a drop and 27% saying they’re optimistic for growth.

‘Brexit for real’ has already caused some major headaches for businesses on both side of the Channel. Freight rates have spiked whilst re-exported products are causing tariff and Rules of Origin headaches for retailers. 

Added bureaucracy, new rules on business travel and ongoing uncertainty surrounding personal data and services are challenges that will likely continue long into the future as well. 

Read more: 5 issues UK businesses face despite the UK/EU trade deal

If your business is still working to adapt and change to the new trading relationship with the EU, we can help. Our Brexit FastTrack service can deliver a detailed review of your business post-Brexit to resolve the issues you are encountering. 

Learn more here.

The price of shipping freight across the Channel has surged following the end of the transition period as the realities of ‘Brexit for real’ kick in. 

The price of moving truckloads from France into the UK rose almost 40% in the first week of January – according to a report by Transporeon. 

Despite relatively quiet flows of commercial traffic at the start of the year, particularly following the stockpiling and Covid delays seen around Christmas, new Brexit-related paperwork and the events towards the end of 2020 have seen many shippers – who typically work on tight margins – increase costs. 

And those heightened prices are likely to remain to help cover the added administrative costs, with Transporean CEO commenting that: “There is a likelihood that we will be seeing higher rates for lanes into and out of the UK into the EU as a result of Brexit.

“Carriers, which normally operate on very tight margins, are reacting to market dynamics.”

Read more: Re-exported products causing tariff and Rules of Origin issues for retailers

Chief executive of the Road Haulage Association, Richard Burnett, said that there appears to be a lack of customs brokers able to manage the paperwork for traders and hauliers. 

Elsewhere, policy directory of Logistics UK, Elizabeth de Jong, noted that whilst the number of vehicles being refused passage was low, the next few weeks will be telling as to whether planning, understanding and systems currently in place are sufficient. 

Growing into the future

At Go Exporting, we help business just like yours plan for the future, research new markets and helping you to plan and implement your export strategy for profitable growth.

Learn more about our international trade consultancy here.

The UK will continue to participate in and help fund five key EU research programmes, including the €95.5 billion Horizon Europe project.

Under the terms of the trade and co-operation agreement between the UK and EU, the UK will continue to play an active roll in the programmes which includes the Euratom nuclear research scheme, as well as the UE satellite and surveillance services. 

The UK’s annual financial contribution to EU programmes is calculated on the country’s gross domestic product as a share of EU GDP – known as the ‘operational contribution’. There will also be an additional participation fee, calculator at 4% of the country’s operational sum. 

The two further projects the UK will continue to contribute towards are the ITER project to build the world’s first functioning nuclear fusion system, and the earth monitoring project called Copernicus. 

The UK has been a major benefactor of the various EU research programmes so far, securing €7 billion in funding between 2007 and 2013, as well as €5.9 billion in funding from Horizon 2020.

Read more: 5 issues UK businesses face despite the UK/EU trade deal

UK institutions had suffered as a result of the Brexit referendum in 2015 with EU-backed funding dropping by almost a third. However, the deal agreed on Christmas Eve ends uncertainty surrounding the UK’s eligibility for EU competitions. 

Read more detail on the various frameworks here.