How to build a Smarter Border
Jan 14, 2019 Comments (0)
Few borders are more interconnected than that between the Republic of Ireland and Northern Ireland, with over 200 crossing points along its 310 miles.
An estimated 170,000 trucks and 250,000 light commercial vehicles cross each month, and trade between the two countries is worth more than $2.8 billion.
This means that Brexit will have a major impact. According to a recent report (funded by the European Parliament's Policy Department for Citizens' Rights and Constitutional Affairs), a hard Brexit would cost $488.9 million and result in:
- Massive delays – 30-60 minutes for trucks, and 10-20 minutes for cars
- Cost increases – The costs for documentation and compliance for cross-border trade would increase by between 2 and 24 percent of the cost of goods, with certificate origin requirements alone, adding over $450 to the cost.
Titled ”Smart Border 2.0: Avoiding a hard border on the island of Ireland for Customs control and the free movement of persons”, the report concludes that Ireland and Northern Ireland would almost certainly have to implement so-called smart border technologies to curb enormous losses for their economies after any type of Brexit.
”There have been significant developments around the world in creating ‘smart borders’ that bring together international standards and best practices and new technologies to create low-friction borders that support the fast and secure movement of persons and goods,’’ the report says.
”Standards and best practices such as domestic and cross-border coordinated border management as well as trusted trader and trusted traveller programs can significantly reduce compliance requirements and make borders almost friction free. Customs and other border control practices that keep the border open, such as release before clearance, deferred duty payments and clearance away from the border, also help keep the border free of traffic and speed up or even remove the need for processing.’’
A hard border would change the business environment for companies on either side, as it would result in greater administrative burdens for traders, including the requirement to make customs declarations for goods crossing the border. Traders would also need to expect an increase in the physical inspections of goods. While there are already some checks in place (e.g. for livestock transported across the Irish Sea), customs declarations and physical checks of goods will be completely new to many traders.
Relying on technology to solve border problems after Brexit could prove difficult for the relevant governments – simply because the physical and technological infrastructure required to support a hard border isn’t yet available. And considering the general lack of the UK’s Brexit preparedness, it seems unlikely that the UK will be able to make the resources and technical infrastructure available in time to support fast and secure trade across a hard border.
For an example of how to create high-tech border crossings, look no further than Sweden and Norway. The two countries share a 1,000-mile border which now allows for automated customs declarations, a communications system with 1,300 customs officers coordinating security, scanners for x-raying trucks randomly picked for inspection, and a license plate recognition system alerting border patrols of suspicious vehicles. The long-term plan is to allow for almost all customs work to be automated to the point where trucks can simply be scanned and waved across the border.
But, in the absence of such a high-tech border crossing between Ireland and Northern Ireland, traders should plan for a hard Brexit now, including reviewing their supply chain, contracts and software solutions, and applying for an EORI number to be export-ready. With less than three months to go, they had better start preparing themselves now.
Iqubal Singh Pannu
Iqubal Singh Pannu is Senior Solutions Consultant at AEB in the UK and has been with the company since 2006. With considerable consultancy and project management experience, spanning several areas of the supply chain, Iqubal is advising companies on solutions for optimising supply chain performance and generating value through automated global trade and logistics processes.