How the border target operating model affects SMEs

By Josh Fenton, Policy Manager for Trade, Customs and Borders, Logistics UK 

On 29 August 2023, government published the final Border Target Operating Model (BTOM) which sets out a new approach to security controls – applying to all imports – and sanitary and phytosanitary controls (imports of live animals, animal products, plants and plants products) at the border. The first phase will now go live on the 31 January 2024 but Logistics UK is concerned as the ‘final’ version of the model is heavily caveated, and is still lacking critical detail such as a decision on the common user charge, clarification on groupage movements and a workable model for the Short Straits.

SMEs play a significant role in supporting the UK economy, with many operators working within the more complex groupage model. Under the BTOM, groupage, the process of transporting multiple consignments – each potentially requiring its own health certificate – on a single lorry or container, will become very challenging and this is causing concern among Logistics UK’s SMEs members. Unlike bigger operators who have larger fleets, more movements and can separate out loads, smaller operators picking up from multiple locations tend to carry less volume, often at lower value and will face a greater risk of delay and additional cost. The business group is therefore calling on government to amend the current groupage model as it is not viable, and going forward, seek a new Veterinary Agreement to reduce friction on the trade of UK EU SPS goods which would significantly reduce the burden on UK SMEs.

The common user charge, due to come into effect from April 2024, is a charge to be administered on each consignment which enters through Port of Dover and Eurotunnel that is eligible for Sanitary and Phytosanitary checks. At this stage the logistics industry still awaits publication of the government’s decision on common user charge costs. Groupage operators, facing a Common User Charge on every consignment, will be among those most impacted. SME’s need urgent clarity on this issue. Compared to larger operators, SMEs are also at a disadvantage when it comes to proposals for Trusted Trader Schemes as they are not able to absorb costs in the same way and lack the resource and records required.  Logistics UK is urging government to continue to adjust the Trusted Trader Schemes, so they become accessible for smaller operators.

On 30 April 2024, the introduction of documentary and risk-based identity and physical checks on medium risk animal products, plants, plant products and high-risk food (and feed) of non-animal origin from the EU will be implemented as part of the BTOM. At this point, imports of sanitary and phytosanitary goods from the rest of the world will begin to benefit from the new risk-based model. However, under current proposals, not all Border Control Post’s (BCP’s) will take all sanitary and phytosanitary goods which places strain on SMEs and could result in less efficiency. Without confirmation of charges at BCPs, there is the potential for emissions to increase as a result of the BTOM if operators are not utilising the nearest BCP’s but opting for cheaper facilities and a time when the sector is trying to decarbonise.

With delays to date, SMEs are hesitant to invest in and resource new border measures until they are fully confident that government will deliver them and on time. It is therefore critical that government engages meaningfully with SMEs, and groupage operators in particular, to road test proposals against real life supply chain challenges.

Logistics UK is one of the UK’s leading business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With decarbonisation, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, water and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.