Today’s chaos at the Channel ports, and on deliveries from Great Britain to N Ireland, reveals the depth of the problems facing the haulage industry as a result of Brexit.
This article is the view of the author and not necessarily of Ready for Brexit
What does Brexit mean for shipping goods into the EU from 1st January 2021?
Major changes will take place in shipping arrangements from the UK to the EU from 1 January, as Don Marshall of Exporta warns:
“This year has been tough on trading for many businesses due to the lockdown and restrictions imposed in response to COVID-19. We do not need any further disruptions to our export trade. But the threat of increased demand for ISM15 certified wooden pallets is very real . I would recommend anyone who relies on exporting to the EU to consider plastic pallets as an alternative. They can save time and money in the long term while ensuring compliance at all times.”
What is the problem?
Before Brexit, goods and people moved freely with minimal checks and documentation; moving goods within the EU was much the same as moving them within the United Kingdom. This is all set to change, as exporting goods to the EU will require hundreds of millions of customs declarations each year. The rules regarding Wood Packaging Materials (WPM) will also change as the UK Government website states:
“From 1 January 2021, all WPM moving between the UK and the EU must meet ISPM15 international standards by undergoing heat treatment and marking. All WPM may be subject to official checks either upon or after entry to the EU.
“Checks on WPM will continue to be carried out in the UK on a risk-targeted basis only. The plant health risk from WPM imported from the EU is not expected to change from 1 January 2021.”
What does this mean?
Essentially, all wooden packaging materials such as pallets, crates, boxes, cable drums, spools and dunnage must comply with the ISPM15 guidelines; ISPM15 stands for the “International Standard for Phytosanitary Measures No 15″. This certification, declaring wooden pallets have been heat-treated and are free from pests and fungus, is key to preventing the spread of foreign species from one geographical location to another.
Until now, any pallets used in the shipping of goods to countries within the EU were exempt from this requirement – any pallet could be used or reused when exporting goods. But from January, all wooden pallets, crates and boxes used to export outside of the UK (except for Ireland) will need to be certified and valid to comply with ISPM15.
We estimate this requirement will at least double the demand for certified wooden pallets almost overnight. Timcon, the industry body for wooden pallets, says this will not be an issue as they have been “planning for this for some time”.
But press headlines are more worrying, such as “How a no-deal Brexit will create shortages and could cripple UK food and drink firms”. There is real unease in the industry about the supply of certified wooden pallets. One alternative solution is plastic pallets, they are already exempt from ISMP15 and completely suitable to use instead.
5 reasons to consider switching from wooden pallets to recycled plastic instead:
- They are exempt from ISPM15
Plastic pallets, boxes, crates, and containers are naturally hygienic, and parasites, bugs, and fungi cannot live in or attach to them. This means that they do not require any specific certification for exporting to the EU, or any other country for that matter.
- They are more cost-effective
It is often thought that plastic pallets are more expensive than those made from wood. This was the case when they were first introduced a few years ago, but they are far more common today, as production techniques have evolved to steadily reduce costs.
There is also now a shortage of sustainable wood sources. And with increased demand outstripping supply, prices have been increasing steadily for several years now. The price gap between wood and plastic is narrower than ever, before making plastic a viable alternative.
- Plastic Pallets last longer than wooden pallets
Wooden pallets are generally only good enough for a few trips and can damage easily. Whereas plastic pallets are engineered for specific uses, scientifically designed to be more accurate, consistent, with guaranteed suitability for a range of different jobs. This means a plastic pallet can last for up to 10 years, at least 25 times the lifespan of a wooden pallet. This makes them a more robust, sustainable and cost-effective solution in the medium to long term than using wooden pallets.
- Plastic Pallets are more sustainable and environmentally friendly
98% of all pallets sold by Exporta are made from recycled material, which helps to reduce plastic waste. Crucially, they do not end up in landfill, which is where the majority of old wooden pallets go at the end of their lifespan. Every plastic pallet sold by Exporta is recyclable and we offer a free plastic recycling scheme.
- Plastic Pallets are scientifically designed and therefore more consistent
Plastic pallets go through a very robust technical design and testing process before they come onto the market. The machines that make them are calibrated – so when a plastic pallet is designed to carry a one-ton on a rack, it is designed, tested, and approved to do so. Wooden pallets are obviously made from a natural material with natural flaws, grains and knots, which means it is not always 100% possible to guarantee exact tolerance and capacity.
This article is the view of the author and not necessarily of Ready for Brexit
Brexit is set to cause at least two years of disruption for the pharma industry suggests Wasdell Group CEO, Vincent Dunne.
Are you expecting a No Deal Brexit in January?
Unfortunately, a hard Brexit remains the most likely outcome when the UK transition period ends on 31st December. At the moment, it seems unlikely the trade negotiators will even agree a Mutual Recognition Agreement (MRA) between the UK and the EU for medicinal products, despite pleas from the Association of the British Pharmaceutical Industry and the European Federation of Pharmaceutical Industries & Associations.
Uncertainty therefore abounds. A No Deal Brexit would lead to the UK trading on World Trade Organisation terms. But even if a trade agreement is reached, it could take many different forms, for example:
- EEA member (Norway model), where UK remains part of EEA and there is minimum impact on current trading
- Free Trade Agreement, allowing tariff-free trade but with defined constraints, or
- Bilateral agreement (Swiss model), allowing the UK to access some areas of the EU market in return for adopting certain EU regulations.
At best, therefore, most analysts expect at least two years of disruption.
How do you see the key issues for pharma companies?
Most pharma companies have been proactive and put contingency plans in place to manage Brexit disruption. Now they are once again having to review the various uncertainties and their potential impact on key areas such as:
- Marketing authorisations: This would involve decoupling the UK from centrally authorised products and could also impact dual labelled packs
- QC testing and QP certification: One contingency plan that needs to be established as a matter of urgency is ensuring that QC testing and QP certification for UK products entering the EU can continue with as little impact as possible. As it stands, the MHRA have stated that they will continue to recognise EU testing and certification, however the EU will not recognise the new UK systems.
- Clinical trials: The UK is currently the most popular location for clinical trials, but it is likely this will change if the UK is no longer part of the EU regulatory system. It remains to be seen whether the UK will adopt the new EU clinical trial regulation (EU No. 536/2014 ) which aims to harmonise trials throughout the EU and ultimately make the EU more attractive for such trials. This will also have an impact on trials already underway in the UK.
- Medical devices: All medical devices currently receive the EU CE mark on approval. Again, depending on the trade outcome, UK companies may need additional approvals should they wish to receive the CE mark moving forward.
- Employees: Companies are also assessing the impact on employees. It is not yet clear whether UK nationals will be able to work freely in the EU, and vice versa.
So, what can pharma companies do at this stage?
It is important that pharma companies continue to plan for a worst-case scenario, with particular focus on mitigating its impact on all aspects of pharma supply chains. Companies need to identify risks in the supply chain and to their ability to comply with new requirements – and prepare for each eventuality. It will also be crucial for companies to assess any potential impact on product market authorisations and determine if products will need to be registered nationally.
One strategy that many companies have adopted is stockpiling throughout their supply chain, including at pharmacy level. However, this is only a short-term preventative measure, and only viable for certain drug products. A more robust plan will need to be adopted as soon as possible.
Historically, pharma supply chains have been quite inflexible, with a heavy reliance on the successful management of inventories. However, pharma companies may now look to engage with contract organisations, such as the Wasdell Group, to facilitate flexibility and agility in their supply chains by using their facilities, processes and QP services in both the UK and EU, particularly during these times of uncertainty.
“The UK chemical industry is warning of a £1bn cost to duplicate EU regime. Smaller companies may fail to survive the move to a British safety registrations agency”.
The Financial Times reports that “Registering a single chemical in the new UK Reach database could cost up to £300,000 if companies are required to buy “letters of access” to use the vast banks of test data held by ECHA — information that is expensive to produce and often owned by third parties. Even then, additional testing may be required.
“Steve Elliott, chief executive of the Chemical Industries Association, said that unless a data-sharing deal was done with Brussels the new system would add more than £1bn in costs to companies, just to duplicate existing registrations. To make matters more complex, companies has still not seen the computer software that the Health and Safety Executive will use to collect the new UK registrations. “The real question is how do you get hold of the registration data, which is held in commercial agreements,” he said. “It’s unclear and we’re getting closer and closer to the time when Brexit is going to happen.”