UK Port of Dover Says It's Ready for No-Deal Brexit Disruption

The Port of Dover -- through which a sixth of the U.K.'s trade in goods flows -- can cope with any disruption thrown up by a no-deal Brexit, Chief Executive Officer Doug Bannister said, suggesting some of the direr predictions of chaos are wide of the mark. "The Port of Dover is 100% ready," he said in an interview in his harbor-side office with views of the town's castle, its famous white cliffs, its all-important port, and -- across the English Channel -- France. "Ferry operators: 100% ready. Calais, Dunkirk: 100% ready."

Bannister's assessment is a boost to the government's efforts to portray Britain as Brexit-ready, even after Prime Minister Boris Johnson was forced by Parliament to publish details of "worst-case scenario" projections under no-deal Brexit planning dubbed Operation Yellowhammer. That portrayed a country in crisis, with nationwide protests, shortages of some medicines and fresh foods, and a huge drop-off in trade flowing through Dover. That's not to say Bannister sees everything going smoothly.

He said he expects some disruption and added he still has no clarity on what "the rules of the game" will be after Brexit. It's as close as he came to criticism of the government. Along with the rest of the country, he still doesn't know the shape of Britain's departure.

Will it be a no-deal Brexit? Will there be a customs union or a trade deal? Each potential outcome will deliver a different trading environment.

Traders need to know what documentation will be required with freight consignments -- and when it'll be needed. What duties will be payable and when by? In what format will the information need to be submitted?

Business Will Adapt
"Once the rules of the game are known business will adapt, and they will adapt very, very swiftly," he said. And when does he expect them? "If the run-up to March 29 is any indicator of when that might be, it will be on the day," he said -- a reference to the original deadline for Brexit. Bannister also warned that some things are unknowable until Brexit happens.

French customs controls take place in Calais, so trucks with their U.K. export papers in order may yet find their French import papers aren't. Calais has the capacity to park 300 trucks with incorrect papers in a holding area, but once that's full, it could prevent more freight from coming over, leading to repercussions in Dover. "The challenge is, does the flow of unprepared lorries exceed the capacity for the system to be able to handle that?" Bannister said. "And that is an uncertainty that we'll have to wait and see how it turns out on the day."

Johnson has pledged to take Britain out of the European Union "do or die," with or without a deal, on Oct.

31 -- even after Parliament legislated to force him to delay Brexit should he fail to secure a new agreement. If Britain does crash out of the bloc, and some of the direst predictions come true, Dover could be the most visible manifestation of chaos. The port handles 120 billion pounds (£150 billion) of trade per year, processing 120 ferry-loads and 10,000 trucks a day.

Add two minutes to the time it takes to process each truck, and the traffic would back up 17 miles. Among other things, the Yellowhammer document projected a drop in the flow of lorries through Dover of as much as 60% immediately after a no-deal Brexit, recovering only to 50%-70% of pre-Brexit transit in three months. Delays could reach 2.5 days.

Bannister said he's not expecting that scenario to pan out, though he did recognize the figures. Nor does he expect it to be plain sailing. Reality, he said, is likely to end up somewhere in between.

Disruption Expected
"We're anticipating that there's going to be disruption: whether it's a day, two days, a week, two weeks, a month, two months, nobody can really predict," he said. He said he felt the Yellowhammer prediction represented a "worst, worst case scenario." The CEO said there may be some drop-off in traffic immediately after Brexit because companies that built up stock will be able to run that down.

That happened in the run-up to March 29, when volumes in the first quarter were over 5% higher than the previous year, while in the second quarter they were 9% lower. Bannister said the government is preparing five sites dotted across southeastern England and away from the port itself, where freight trucks will be able to make export declarations before heading to Dover. He's been told those sites will be ready by Oct.

31. In theory, they should sift through trucks and funnel only those with the correct paperwork to the port. "Whether they'll be successful or not, we need to see on the day," he said.

French Cooperation
While U.K. authorities have agreed to simplified customs procedures for the first six months after Brexit to reduce friction, "we still don't have clarity on what will be the checks the French authorities will do in Calais," said Bannister. Delays across the channel could lead to backups in Dover once those spaces fill up. Nevertheless "we've got deep experience in managing traffic flows through disrupting times," he said.

For Dover's Member of Parliament, Charlie Elphicke, it's important to stick to the Oct.

31 deadline for Brexit.

Like Bannister, he acknowledged in an interview that "no one knows what disruption there might be on the French side," but pointed out that any delays would be damaging to Europeans as well as to the British.

"I am confident common sense will prevail," he said.
Source: Bloomberg

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