Freight transport to and from the United Kingdom in 2020: an overview

The new rules and criteria for import and exporting goods to and from the United Kingdom (UK) will come into force on 1 January 2021. The date is fixed now that the UK’s House of Lords has passed Prime Minister Johnson’s ‘Brexit bill’ and the European Union (EU) has approved the unaltered withdrawal agreement. Therefore, it’s especially important to know what these changes will mean for freight transport.

The withdrawal agreement can move into the implementation phase now that it has been approved by the EU. The UK will cease to be a member of the EU on 31 January. From a trade perspective, the remaining EU Member States will be required to treat the UK as a ‘third country’ from that moment onwards. Third countries are exempt from free trade, so import and export activities are subject to customs declarations and import duties, according to Richard Groenendijk, General Manager of AEB Nederland, a customs management software vendor.

However, the withdrawal agreement includes a transition period which can be used to finalize the details regarding things like new trade relationships or a new trade deal. The current EU rules and regulations – including those regarding the free movement of goods – will continue to apply for the whole of that period, so nothing will change for businesses until afterwards, Groenendijk states.

The transition period will end at midnight on 31 December 2020. That date will no longer change now that the Brexit bill has been passed by the House of Lords as well as the House of Commons. Groenendijk: “This bill largely turns the conditions in the withdrawal agreement into national law, and that includes the fact that the date cannot be extended beyond 31 December 2020. So the UK is no longer able to accept the EU’s offer of an extension until the end of 2022.” New trade agreements will therefore also come into effect on 1 January 2021.

Various scenarios from 1 January 2021 onwards

It is important to both the EU and the UK that the negotiations are successful, not least so that the countries concerned can continue to trade with one another. Groenendijk (pictured): “If consensus is reached on the trade agreements – and these include customs procedures and import rights – they will enter into force on 1 January 2021. Many people believe that such a trade agreement is the best possible way to manage the post-Brexit relationship.”

But if no agreement on the future is reached during the transition period, trade between the various regions will become less appealing. In that case, the UK can fall back on World Trade Organization (WTO) rules which also contain trade provisions, and they govern the rates for import duties too, adds Groenendijk.

Start preparing

So, new agreements relating to the import and export of goods between an EU country and the UK will come into force on 1 January 2021 now that the EU has approved the withdrawal agreement. It is possible to already start preparing for the changes that are not affected by the negotiations during the transition period. Even companies that are already trading with countries outside of the EU could face some changes, cautions Groenendijk: “The consequences of Brexit could affect everyone. It’s better to start preparing now rather than waiting until it’s too late,” he says. The ‘Brexit toolkit’ provides a step-by-step guide, for example, and the Dutch customs office also has some handy tips.