Mr. Aidan Flynn:

I am the general manager of the Freight Transport Association Ireland. We are delighted to be invited to present to the Seanad Special Select Committee on the Withdrawal of the United Kingdom from the European Union regarding issues that are of major importance to our members.

FTA Ireland is a not-for-profit membership trade association for the Irish freight, passenger and logistics industries. The association is wholly owned and governed by our members. To date, we have over 300 members, which represent some of the largest freight and passenger operators in Ireland. Our members have more than 25,000 employees and 10,000 commercial vehicles operating between them. Our mission is to help our members to develop safer, more efficient and sustainable supply chains and transport operations. We provide representation, information, training and auditing services for our members. We have a recognised gold, silver and bronze accreditation programme that all our truck fleet members must participate in annually. The programme is designed to recognise operators that demonstrate the highest standards of professionalism and compliance in day-to-day management of drivers and vehicles. The accreditation gives independent verification that operators are meeting minimum legal requirements in terms of driver training and management and vehicle roadworthiness. To date Brakes Ireland, BOC Gases Ireland, McArdle Skeath and National Vehicle Distribution have achieved the gold standard.

There are over 18,000 commercial vehicles on the operator licence list in Ireland. That corresponds to 3,834 operators listed for international and national operations with an average fleet size of 4.7 trucks. Of that figure 12,600 vehicles or 2,351 operators are registered for international haulage. Ireland's geography means that the freight and logistics sector is critical for the country's economic activity and its connectivity to the rest of the world. The majority of freight in Ireland is transported via road. Two thirds of all freight in Europe is transported by road. In 2015, a total of 118.1 million tonnes of goods were transported by Irish goods vehicles. Most export freight is transited via Ireland's ports either as road freight, which is known as roll-on roll-off freight, or as container freight, which is known as lift-on lift-off. Dublin is Ireland's largest port and handles 44% of the total tonnage of goods traded.

The UK is leaving the EU. Contingencies must be agreed and planned to ensure minimal impact to trade and to mitigate uncertainty on rules and regulations or lack of access to markets. What is certain is that the harder the Brexit, the more issues that will arise for the transport and logistics sector as a whole.

Brexit brings many challenges, not least understanding how the supply chain will be impacted and the knock-on effect this will have on the efficient flow of goods into and out of the country, as well as whether this will have negative financial consequences for the competitiveness of the country and the consumer.

The unique relationship between Northern Ireland and the Republic of Ireland cannot be understated during the negotiations. It is testimony to the Government and the Taoiseach that this issue has drawn support from UK and the EU. Having this topic discussed in the early stages of the process will help put shape on what the country must do to prepare for Brexit. Aside from the fact that cross-border trade amounts to approximately €3 billion annually, with approximately €1.5 billion in the food and drink sector alone, the implications for jobs and the movement of people across the Border are extraordinary. No other country in the EU is as reliant on the UK as Ireland as a trade partner and in terms of access to the wider EU market through the UK land bridge. The UK is Ireland's second biggest market after the USA, with almost 13% or €15 billion of Irish exports going to the UK in 2016. The UK purchases 50% of Ireland's beef exports, 42% of our food and drink exports and 55% of Ireland's timber and construction sector exports. Ireland is also heavily reliant on UK products. Most goods imported by Ireland in 2016 came from the UK. The value of this trade is €16.6 billion.

Members of FTA Ireland are concerned about the consequences of Brexit. The world is a different place compared to the 1980s and early 1990s, when border checks and customs checks were par for the course. The current marketplace has grown up based on just-in-time logistics, ease of access to products and services, as well as organised and relaxed borders. In the early 1990s we were sending only 37,000 roll-on roll-off units per annum via the Irish Sea to the UK. Today, the corresponding figure is in excess of 400,000 units per annum from Dublin Port alone.

Ireland, as an island nation on the periphery of the EU, is reliant on getting the majority of its imported and exported goods to and from the EU predominantly using the UK as a landbridge. There is only limited scope to increase volumes by sea and air. While it is true that Ireland does not rely on the UK market for exports or imports as much as in the past, the agrifood sector still does. Restrictions to trade will not only have a devastating impact on this sector but on rural Ireland, where these products are produced and where farmers and local businesses are linked. An obvious solution is to ensure a trade deal with the UK that allows trade to move in a manner we are all used to. This is something we can all pursue.

FTA Ireland has published a position paper that makes three priorities. The first is for no hard border with Northern Ireland and no barrier to trade with the UK. It is vital for the stability of the North and the unique interdependence between Northern Ireland and the Republic that a hard border is avoided. Production processes and supply chains are highly integrated with many businesses operating on an island-of-Ireland basis and many products being partly produced and processed on one side of the Border before being sold on the other side.

Customers and businesses have grown accustomed to the flexibility brought about by the current arrangements. Bringing back the borders of the past will create unnecessary delays and disturb supply chains. A hard Border would also create difficulty for Irish businesses located in Donegal and Sligo because the best route for them to reach the port of Dublin is through UK territory. It is therefore essential that both negotiating teams find solutions that will work for all parties and which will not cause undue delays. An all-island of Ireland approach needs to be taken during the negotiations. The impact and extent of controls should be minimised through greater prioritisation of controls and the use of smart technologies. Mutual product recognition between the EU and the UK should also be guaranteed post-Brexit.

The second priority is seamless transport links between Ireland and the UK. Ireland needs efficient and flexible road transport links to Northern Ireland and Great Britain, as well as an efficient land bridge to continental Europe. Mutual recognition of transport documents, qualifications and licences for road transport operators should continue post-Brexit to limit disruption. Post-Brexit, it is important to ensure that all companies are treated in a fair way by authorities, regardless of their country of origin.

The third priority is a seamless transition to the post-Brexit era. Political uncertainty has a negative impact on business operations not least because of currency fluctuations. A sustained period of uncertainty must therefore be avoided to allow businesses to plan ahead and investments to be made. Negotiators should try to provide as much clarity as possible to businesses as the general framework of the future relationship with the UK. Avoiding a cliff edge for businesses should be the priority of negotiators on both sides.

Ending negotiations with no deal would be the worst case scenario for industry. A suitable transition period will be needed between the UK's exit and the conclusion of a new agreement and new arrangements but this transition can only take place if it is foreseen in the withdrawal agreement with the UK. Negotiators need to agree a phased implementation of new rules to allow businesses, authorities and entities responsible for critical infrastructure, such as ports, to adapt to new arrangements post-Brexit. Industry will need clear and simple processes, but also time and support to train its workforce. Dedicated help should be provided to businesses that have less experience of international trade and operations, especially SMEs.

For frictionless trade or no hard Border on the island, it is clear that new standards of compliance and operation are going to be required that are ambitious and technologically inclusive. It is vital for successful implementation that we plan, resource and support this in time, irrespective of the outcome. FTA Ireland is calling for the appointment of a dedicated Brexit or logistics minister to ensure Government continues to put the needs of Irish industry at the heart of Brexit negotiations. Without a minister operating in this dedicated role, Ireland is at a disadvantage over the course of the negotiations and we must do everything possible to ensure the sustained success of the nation's trading relationship with the UK and the EU member states. While we recognise the work done by civil servants here and in Brussels to date we would strongly recommend a more focused cross-departmental approach that will facilitate the implementation of solutions. The concerns of shippers, freight forwarders, consignors and distribution companies must be listened to in determining the best outcome for Ireland. This will be aided by clear leadership driven by the government of the day but supported by a dedicated minister with responsibility for Brexit and the supply chain.

There are also concerns about skills shortages. To be Brexit ready industry must invest in developing skills, and technological competencies to ensure free flow of goods and services. Too often the transport sector has been bypassed in training and education. Now is the time to invest in upskilling the workforce and preparing an industry to be world leaders. The committee should bear in mind that the average fleet of trucks operating internationally is five vehicles making this SME sector very exposed to sudden sharp change. Support must be forthcoming to provide training and supports in customs processes and also to urgently introduce continuing professional development for transport managers. Currently, to have an operator licence a person needs a transport manager certificate of professional competency, CPC, qualification but there is no follow up to keep a manager up to date with new legislation or systems. This needs to change. Third level colleges should be encouraged to work more closely with the industry on projects that will benefit both the college and the industry in aiding the upskilling requirements.

Due to Brexit it is inevitable that there will be more requirement for customs services. Importers and exporters will have to invest in the services of customs clearance personnel in order for value added tax, VAT, and tariffs to be paid to the Revenue Commissioners in an organised and timely manner or face delays to the movement of goods. Those moving the goods must fully understand the documentation and processes involved in this new era of distribution. It is important that there is a collaborative approach taken in promoting solutions that will work well for all parties. This will ensure better compliance and engagement as well as developing trust, which will be vitally important in reducing the likelihood of delays or product deterioration.

Over the years specialism in the customs and excise sector has diminished considerably, primarily due to the standardisation of systems, the lack of business potential in the private sector and ultimately the lack of demand for these services. The public sector has also suffered because there will be a spike in demand for these skills as a result of Brexit. When it comes to planning for customs in order to ensure that full advantage is taken of the available special procedures and to legally minimise payments, there are very few specialists able to provide a fully professional service. To aid solutions that are viable for all, including a borderless Northern Ireland and ease of movement of goods into and out of the country via the ports, there must be agreed systems, controls and standards of compliance requirements.

There is a great opportunity for Irish international operators to be prepared to compete in a marketplace that demands compliance, professionalism and certification. Consideration will of course have to be given to the cost of adaption and the requirement for business to recruit additional staff and invest in technology. Cognisance must also be taken of solutions that are viable and will not leave any member state in a worse position than it was in prior to Brexit.

Article 50 has been triggered since 29 March 2017. The countdown has begun but negotiations have not. The problem for all will arise if an agreement cannot be made or there is no prospect of an agreement after the two year period. In this scenario there cannot be an extension to the negotiations. Ireland must prepare for this possibility and it is vital that there is clear leadership that will protect the country's interests irrespective of the outcome and strive at every opportunity to get a deal that is best for Ireland. It is certain that the UK will become a 'third country' and that all in the supply chain must plan for this.

We must look on Brexit as an opportunity to revitalise our supply chain and examine how we can get goods to and from Ireland to the other markets. For this to happen we suggest the following: a dedicated minister for Brexit and supply chain. This will aid a co-ordinated approach to working with key stakeholders in determining the issues and preparing solutions at EU and local government levels. We recommend engaging the education sector particularly business and supply chain colleges that can help view the situation from an academic perspective. A lot of research has been carried out on supply chain logistics, resulting in some ideas which are our future solutions. We need to understand some links in the supply chain may be more advanced than others. When technological solutions are introduced the problem will arise that some in the chain will not be able to adapt as quickly as others, we must understand and plan for this eventuality. It is critical for businesses to have a smooth transition in place to what is likely to be a very different regulatory and trade environment. Industry needs time and predictability to adapt. There should be no sudden changes to rules and requirements, and industry needs to be properly consulted every step of the way. In the future, irrespective of the relationship between the EU and the UK, the threat of divergence of rules and standards will always expose Ireland to more trading difficulties than our European partners. For instance, it was recently reported that over 200,000 fidget spinners had been confiscated by the Competition and Consumer Protection Commission due to safety concerns that they did not have the European CE mark. This could become a much more common occurrence given that the UK will not be obliged to meet the same requirements. Shippers need to ascertain as best they can that their contractors are carefully selected and that drivers are subsequently trained and monitored, as required by both the EU and national legislation, as well as for their own peace of mind. It is very important that shippers appreciate the factors affecting the environment through which their goods will pass en route to their final destination. There should be increased funding to support more progressive and fair enforcement at national and EU level. Skillnets funding should be made available to aid the education and upskilling requirements. An accreditation programme needs to be initiated for all levels of the supply chain to aid a viable and efficient solution for Ireland's accessibility to market issues. This can also lead to fast tracking customs at Irish and UK ports and will definitely facilitate ease crossing the Border. We need to exploit the opportunity to improve the whole supply chain and improve professionalism and compliance at all levels. There must be more linked-up thinking.

We remain positive but it is wise to plan for the worst and hope for the best outcome.