'It'll be carnage': British companies dread a Brexit border breakdown

Deal or no deal, British companies will have to confront a wall of bureaucracy that threatens chaos at the border if they want to sell into the world’s biggest trading bloc when life after Brexit begins on January 1.

When Britain casts off from the European Union, firms that drive nearly $1 trillion in annual trade will have to navigate myriad new rules and red tape that will increase costs just as COVID-19 bleeds the economies of the West.

Outside the EU single market where trade flows freely, Britain’s exporters will have to complete a raft of paperwork including customs and safety declarations and navigate multiple IT systems to gain entry to Europe.

But with a matter of weeks to go, companies used to trading as easily to Berlin as to Birmingham are yet to see the new IT systems.

Customs brokers have not been trained, operators do not know what information is required nor how the rules will be enforced.

Many have predicted chaos. Even the government has said 7,000 trucks could be held in 100-km queues in Kent, south-east England, if companies do not prepare.

“It’s going to be carnage,” Tony Shally, managing director of freight specialist Espace Europe, told Reuters. “We’ll be fire-fighting from the 1st of January.”

The current row over whether Britain leaves the EU with or without a deal has helped mask the fact that the deal on offer represents the biggest change to UK trade since the formation of the single market in 1993.

Outside the bloc, companies will have to complete paperwork and submit goods for random checks to cross borders, increasing both the cost and time it takes to do business.

In 2019 Britain, the world’s sixth-largest economy, imported EU goods worth 253 billion pounds ($331 billion) and exported 138 billion pounds-worth to the bloc, when removing goods like oil and gold which distort trade flows.