Brexit Deal Impact on Freight Shipping: Malta, EU and the UK caught between a new deal and Covid-19


After a challenging and unpredictable year, the EU and the UK started 2021 with a Brexit deal that challenges the shipping industry. To further complicate our industry, the pandemic has not wavered, and we are currently experiencing a third wave, in Europe and all over the world. Covid-19 has had a tremendous impact on our daily lives and our business, including international trade and logistic supply chains - something that is expected to continue in 2021. The year ended with an increase in rollovers and severe delays within supply chains, circumstances we are still suffering from all over Europe. The Brexit deal was a last-minute ordeal that caused sudden border closure right before Christmas and caused unexpected uncertainty for shippers, carriers and freight forwarders.


Last-Minute Brexit Deal

Sudden border closure between the EU and the UK led to a stalemate along the borders with thousands of trucks stuck on the roads. This took place on the 20th of December, right before Christmas. Forty-eight hours later, trucks were allowed to move again. It was a time of uncertainty with news of a new aggressive Covid-19 strain and a no-deal Brexit looming in the air. Then, on the 24th of December, a last-minute Brexit deal was reached, called 'The UK/EU Trade and Cooperation Agreement”. In 2021, we can expect a gradual transition in the first half of the year, including three stages that concludes with full UK border control by 1st July 2021.


EU-UK Trade and Cooperation Agreement

The new EU-UK Trade and Cooperation Agreement protect European interests and ensure a levelled playing field. There is also continued cooperation in areas of mutual interest. On paper, the deal could have been a lot worse; there is a Free Trade Agreement that provides zero tariffs and zero quotas on goods traded that comply with the appropriate documentation. What hit the shipping industry the worst is the impact of free movement. As the UK has left the EU Single Market and Customs Union, they left behind all EU policies and international agreements. The free movement of individuals and goods between the UK and the EU ended. This has caused a chain of events that in turn caused delays; new structures in supply chains, customs processes, added taxation and an overall increase in costs.
Shipping costs and rates are up for logistics operators in Malta and all over Europe. EuroFreight is doing our best to adjust to this new reality, adapting to new structures in the supply chains and helping our customers get their shipments delivered.


Freight Capacity Falls, Prices Rise

Rising prices due to falling transport capacity were expected. Comparable data from last year shows a 38% decrease in freight volumes moved between the UK and the EU for the first weeks of 2021. Currently, shipping rates have surged due to limited freight capacity all over Europe due to Brexit and the Coronavirus. Logistics operators have highlighted that the hiring of European drivers to bring goods into the UK have surged. The border controls have also tightened. Drivers need to test negative to Covid-19 to leave the island - making the UK a much less attractive destination. EuroFreight hopes that we see a gradual, overall recovery of transport capacities in Malta and across Europe during the first quarter of 2021. We are hopeful for a better 2021.

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