Blog 2: Brexit – Nostalgia for free movement

To: Albert Veenstra ….the world’s first Professor in Trade Facilitation

Nottinghamshire, 9 February 2021

Dear Albert,

How wonderful to hear from you and I am pleased you are keeping well. These certainly are unusual times. At the moment, I seem to be torn between exceptional volumes of work and odd moments spent staring out the window reflecting on all that is going on… not to mention the worry and concern for friends and family far and near.

In your letter you highlight so many different issues – Covid-19, Brexit, Climate Change – which all of course have an impact on trade and logistics. Coinciding with your letter, my very clever mobile phone reminded me that it had been almost three years since my last trip to the Netherlands. The phone (a clever algorithm?) placed a picture that I took during that trip on my “home screen” …. beautiful blue skies reflected in a canal framed by houses and the odd tree. You guys know how to paint a postcard – at least on days when it is not grey, misty, overcast, rainy, etc. I do feel a bit nostalgic, especially with all the travel restrictions in place. At present, it does feel as if that trip belonged to a different time.

As logistics professionals we are, of course, accustomed to thinking about time – though maybe not always within the context of nostalgia! How apt that we choose to write to each other letters, a medium that gives us time to reflect and consider each other’s experiences from afar, and yet so close. Better still, we do not need to anticipate an immediate reply by email – leaving us free to ramble without fear of interruption or having to take any immediate action.

In that spirit, I am sure that you (like me) regularly find yourself reminding students that, in logistics, distance does not necessarily have to be measured in kms or miles. Distance is also measured in terms of time, and or course in terms of cost! As you mentioned, we are experiencing significant disruption in the logistics sector – and the distances defining variables “time” and “cost” are very much impacted. On top of that, there are of course all the “spanners in the works” – where cogs grind to a halt, and the wheels stop turning. The academic in us might shout out “transaction costs” which has been the focus of much of our respective research attention – dare I say cutting red tape in international trade? But Covid-19 could also be described as a transaction cost. Like other frictions, transaction costs have an impact on where the boundaries between contracting firms lie (outsource, insourcing etc), but also, as we observe at present, on the boundaries between people and their employers. For that matter, also between teachers and their students. Zoom and Teams are great, but not perfect. Most transaction costs can of course be mitigated by connecting people and building trust.

With all that is going, it is easy to feel nostalgic – especially for how things were. The loss of my European Passport, for example, saddens me dearly. This brings to mind “resilience”, another topic that has featured strongly in my recent research. Accepting the inevitable, the foreseen and unforeseen. (When teaching, I sometimes like to share a YouTube clip with Donald Rumsfeld’s mumblings about the known knowns and unknown unknows…). Good businesses practice is to accept and manage risk – it’s what business is about. Knowing that not all risks can be mitigated however well you plan is part of the game. Nevertheless, good businesses do try and plan as well as they can, and will have a good idea about options, and how to best bounce back – and however sentimental, tend to look towards the next step rather than back. This of course requires the luxury of time to plan. Many SMEs are so busy wrapped-up in their day-to-day work that there is little time to think of anything else – dare I say Brexit. The Dutch depiction of Brexit as a blue monster is rather inspired!

As you know, I spent much of the last two years touring Ireland – initially in person and now, virtually – delivering SME Customs workshops. Imagine having to try and pick-up the fundamentals of Customs in just a few workshops? It’s quite a steep learning curve, especially where the demands of Customs and other trade procedures impact on efficient logistics operations. I cannot help but feel sorry for the disruption that BREXIT is causing to so many businesses. Many will have to (if they have not already) radically alter or rethink their business processes.

There is a good chance that much of the logistics arrangements between the UK and its neighbours will have to be reconfigured – with less emphasis on speed and more on scale; for example, by shifting from pallet-size groupage shipments on ferries to full container loads on container ships. Businesses unable to scale-up to help spread the new costs might struggle. At the moment, the news in the UK is full of stories about small businesses struggling, not to mention the UK fishermen who now find that the cost of placing their catch onto the continent’s premium markets have become prohibitive. Perhaps a subject for our next letter? I am eagerly looking froward to it!

Yours sincerely,

Andrew

P.S. Thanks for addressing your letter to “Trade facilitation expert extraordinaire”. To be honest, I have learnt not to refer myself as an expert… but, in situations where I absolutely have to, I will quickly add the caveat that “the more I know, the more I know I don’t know”.

Read here the letter of Albert