UK freight shipping costs soar due to Brexit and pandemic pile-up

Spot rates for freight across the English Channel jumped above €6 per kilometre last week, up from usual levels of €1.50-€3

Lorries check in to the Port of Dover this week after Britain's departure from the European Union. The chaos caused last week due to temporary border closures led to a spike in freight rates. AFP

The cost of moving freight from France to the UK surged to more than four times the usual level last week after Brexit and a virulent new strain of the coronavirus complicated supply chains.

The spot rate for last-minute shipments across the English Channel reached more than €6 ($7.35) per kilometre for a full truckload in the final week of 2020. That’s up from an average of €1.50-€3, with some isolated cases of firms charging €10 per kilometre, according to data from the global logistics platform Transporeon.

The figures reflect the moment of maximum chaos at British ports, when the French government shut the border to contain a new strain of Covid-19. Thousands of trucks piled up on both sides of the English Channel, and more shippers rejected cargoes to avoid getting trapped in transit over the holiday break.

Four days into the new year, the long lines of trucks at the border have largely dissipated after France relaxed its controls. The freight rejection rate ticked down in the last week but remains 79 per cent higher than the third-quarter average.

Truckers say the current lack of chaos at Britain’s key ports could mask the risk of logjams returning later this month as both countries adapt to new trading arrangements after Britain’s exit from the European Union.

Driver shortages over the holiday season are normal and usually lift spot rates, said Stephan Sieber, chief executive officer of Transporeon. But “the magnitude of the deviations we saw at the back end of 2020 was not normal”.

Mr Sieber predicted that higher spot rates for UK transport from continental Europe were likely to continue, although it was hard to tell for how long. “It seems the supply chains are resilient,” he said.

On Monday afternoon, there was a one kilometre line-up to the Port of Dover and a 2-kilometre queue up to Calais. Crossings to France are taking about three hours and the journey back about four hours, according to real-time data from Sixfold, which is a unit of Transporeon.

David Smith, commercial director at Specac, a maker of scientific equipment, said his firm had halted imports and exports between Christmas day and January 18 to avoid any disruption.

“I looked in August, and I thought the queue to Dover was only going to be as quick as the least well-prepared business,” Smith said. “And there are already hundreds of lorries that have gone to wherever – they are sitting on the road to Dover – who have been rejected because they haven’t got the right paperwork.”