Michael Stephenson in conversation

“The demand for EU goods is pretty insatiable”

Forwarding and logistics organization Davies Turner has been Gebrüder Weiss’ partner in Great Britain for over 40 years now. Managing Director Michael Stephenson talks about his personal expectations regarding Brexit.

We are facing the so-called No-Deal-Brexit. How did you, as a logistics company, prepare for this situation?
It took a lot of time and money! It is very difficult to make plans when one does not know what one is actually planning for. Finally, at the eleventh hour there seems a real desire by both the EU and British Government to reach a Trade Deal and so we are hoping for the best. Whatever the outcome, we will be ready and prepared. We have been recruiting and training additional customs staff and developing and enhancing our import and export systems. The challenge is to maintain, as best we can, the competitive lead times our mutual clients have come to expect.

Are you afraid for the competitiveness of British products? What British products do you have in your portfolio, which you do – and still want to – export to the EU?
A No-Deal-agreement will certainly impact the competitiveness of British products and services but this may be offset by the falling value of sterling. Although, no longer British owned carmakers such as Jaguar Landrover (JLR), as well as major manufacturing plants for Nissan and Toyota are extremely important for UK exports to the EU along with Aerospace and Finance. To stay competitive these industries will be very dependent on a free trade agreement and some flexibility in terms of rules of origin, which we understand is a difficult point in the negotiations, will be necessary.

People who voted for LEAVE claim that Brexit will boost the British economy. What is your personal opinion on that?
The advantages and disadvantages may eventually cancel each other out, but the reasons for Brexit are probably ideological as much as commercial. In the short term the UK economy is expected to experience a considerable negative effect, but of course this will be much reduced, if a Trade agreement can be reached.

Do you feel that Brexit will strengthen the local economy? And if so, what would be the impact on the local logistics framework?
There will be winners and losers on the logistics market. Some companies in the UK are relocating their stock-holding to warehouses on the Continent to retain free circulation and frictionless trading with EU customers. In reverse some EU companies are setting up distribution warehouses in the UK to serve the UK market. There could be interesting local effects for Davies Turner as the Government is introducing a strict process to avoid traffic jams around the port area whereby trucks on route to continental Europe will need to have completed the export customs process prior to entering the county of Kent in which Dover is located. Our leading hub for continental Europe is situated at Dartford in Kent where we will be able to complete the export documentation online to the Government computerized system and obtain permission for the trucks to travel straight to the ferry port or Eurotunnel with no further export formalities. However, the Government’s computer system is not yet ready which is a concern as we approach January 2021!

Talking about import – what products do you expect to still be preferred by British consumers even when prices rise due to custom fees?
The demand for EU goods is pretty insatiable – technology, consumer goods like washing machines and motorcars and of course wine and cheese. The consumption of alcohol has substantially increased during Covid-19 lockdown!

Apart from the obvious challenges that Brexit will pose to your business, could you imagine benefits, as well?
Even in the free trade area, which we hope for, there will be many more Customs clearances for Davies Turner to handle. We have the staff, the systems and the Customs-controlled premises to process the extra work fast and profitably. But to complete our preparations, we need a detailed agreement between Brussel and Westminster, without further delay!

There is a lot of concern among forwarders regarding timeliness of border clearance. What do you expect in this regard?
Initial delays are inevitable but we will be prepared for any scenario that a EU and UK trade deal will lead to. British Customs will also be under strain so may show some flexibility during the six month introductory period through to 06/30/21. Davies Turner controls a great deal of Ocean and Air freight, including successful relationships with Gebrüder Weiss branches in the East Asia. We already handle a large number of trailer movements from countries outside the EU such as Turkey and Morocco, which means we have a lot of experience working under all Customs regimes. We offer reassurance to our customers and partners that all areas within our control will be taken care of. Elsewhere, we are expecting some initial difficulties but the forwarding industry is as flexible as it is resilient and so I’m sure we will all soon settle into the new working methods that will become necessary.

If asked today, would you expect the British people to vote for LEAVE again?
The British people effectively had a second vote on Brexit during the turbulent politics and Christmas election last year which Boris Johnson won with what he now famously described as an “oven-ready deal”. So for better or worse this question has been settled for the time being. However, the country remains split down the middle. The younger generation are mainly supportive of remaining in the EU and so who knows perhaps in the future there will be a vote to re-join someday, if it is felt better to be in than out.

Founded in 1870, Davies Turner now has 20 sites in Britain and Ireland and around 100,000 square meters of warehouse space. The family-run business is led by Philip Stephenson and Michael Stephenson (in the image). (Image: private)

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