Companies not prepared for border checks, hoping Brexit will not happen, says broker
Mon, Feb 18, 2019, 10:57 Simon Carswell Public Affairs Editor
Gerard O’Hare, general manager of Beagan’s, which lies 6km from the Border and has been in business for 60 years.
Photograph: Ciara Wilkinson/The Irish Times
Gerard O’Hare’s phoneline has been busy. As general manager of Beagan’s, the country’s largest independent customs broker, he and his staff have been taking up to 20 queries a day from callers concerned about Brexit.
“The state of unreadiness among people out there is just unbelievable,” says the customs man who has been in the business long enough to remember trucks waiting a day at the Irish Border for customs clearance.
“A lot of the small companies are just hoping that the whole thing will go away and a lot of the bigger companies, while they are thinking the same thing, are trying to make some plans.”
When the Revenue Commissioners warned last month that the number of customs declaration forms filed a year could surge from almost 1.7 million to 20 million after the UK leaves the European Union, O’Hare was listening. He and brokers like him will, for the most part, be the ones helping traders to prepare the declarations.
“I can see huge problems if it comes to a cliff-edge Brexit,” says O’Hare, whose Dundalk-based office is located just 6km (3.7miles) south of the Border.
It is the small companies I feel sorry for
“My personal opinion is that there will be a Brexit but it cannot be on the 29th of March. The proposed system in both the UK and Ireland will not work and will not be able to function with the volume of transactions that happen.”
Without a simplified customs procedure post-Brexit and some kind of “trusted trader” system to facilitate immediate customs clearance for goods on arrival into or exit from the country, he predicts chaos.
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“There will be gridlock and it will seriously affect people’s businesses and ultimately jobs,” he says. “It will increase costs to the consumer and for importers and exporters because they will either have to stock up or delay their shipments or consolidate their shipments.”
The whole issue of what will happen to North-South trade post-Brexit is “totally in the wind,” says O’Hare. He believes there may be some technological solution but cannot see customs posts or a physical border returning.
“I don’t think there will be a physical hard border. There can’t be. No one wants to go back to that scenario again,” he says, adding that modern-day food-supply chains mean businesses could not sustain a hard border.
“One particular customer has said that if he doesn’t meet deadlines for getting food to the UK by the next morning, instead of those products being fresh, they are going to end up being used to make soup.”
O’Hare views Brexit as “a very backward step”. In the EU single market, there have been great advances in customs procedures, he says; some truck drivers have never had to pass through customs checks.
“The overall effect is just going to be a massive change for how people deal with their trade between the UK and the Republic of Ireland and that’s not even accounting for what’s going to happen between the Republic of Ireland and Northern Ireland, ” he says.
The introduction of the EU single market in 1993 and the dropping of trade borders eliminated the requirement for many customs clearance agents, leaving O’Hare and people like him focused solely on customs clearance for the smaller volume of goods coming from non-EU “third countries”.
Before 1993, Beagan’s, which has been in the customs business for 60 years, had 120 staff and seven offices along the Border. Six months after the single market, it had two staff. Now Brexit is bringing back borders and the need for agents, but the personnel are just not out there to service the customs checks.
“We are going back in time here in theory,” he says.
O’Hare has 14 employees and is, like most other companies unsure about how far to go to prepare for Brexit, reluctant to hire more when there is so much political uncertainty around it.
Brexit might mean boom times in customs, but O’Hare refuses to hire staff for short-term work to assist large firms who want help immediately after Brexit.
Small companies have neither the resources nor the room in their profit margin to absorb post-Brexit transit delays or customs clearance costs, he says.
“It is the small companies I feel sorry for,” he says.