Oireachtas Joint and Select Committees

Wednesday, 16 December 2020

Joint Oireachtas Committee on Transport, Tourism and Sport

Impact of Brexit on Haulage, Freight, the Ports and Ferry Companies: Discussion

Mr. Kieran O'Callaghan:

I will start by going back to 2016, when I attended a procurement conference in Dublin. Brexit and its potential fallout comprised a recurring theme throughout. The guest speakers were talking all things Brexit but, to my surprise, the conversation was centred mainly on air passengers travelling through the UK, with no reference to what Brexit could mean for our supply chain. The supply chain is the roof over our heads, the clothes on our back and the food on our table, etc. Transport drives our supply chain and thus it is the backbone of our economy. From the conference, it became evident to me quickly that change in transport methodology was needed.

The discussions today should not just focus on damage limitation in respect of how we can avoid delays on the UK land bridge and minimise the risk and disruption of such delays; rather, we should use these discussions to understand how we can shape an autonomous supply chain, how the Government can invest in our air, sea and road freight models to deliver a supply chain infrastructure that can underpin our economy and express our vision as a country to prospective foreign direct investors and opportunities in the e-commerce and logistics space.

My expertise specifically relates to the air freight model, which is built on the components of speed and time-definite delivery. I began my career in freight forwarding in 1981. I have worked at home and abroad in leading senior management positions, and I became CEO of one of Ireland's leading mid-west freight-forwarding companies. The company ceased trading during the economic crash in 2009 and I have worked as a consultant since then. This experience has allowed me to evaluate Brexit and identify the three key risks that present themselves to the air freight modelfrom 1 January.

Before I move on to the risk assessment, it is important to provide context. The most recent Irish air freight study outlined how air freight represented less than 1% of the export volume but equated to 30% of total exports by value. This is also representative of global trends. The exports of 2019 were valued at €152 billion so clearly air freight is an extremely important cog in the Irish economic machine. To break down that number further, we estimate that more than half of that air freight is currently using the UK land bridge for global forwarding from UK and EU airports.

The first and most immediate and obvious risk to this air freight model are the bottlenecks that will, and already have started, to present themselves in the UK. Speed and time-definite delivery are foundations of our air freight model, which overnight will be in complete disarray.

The second key risk relates to the sphere of influence the UK will maintain over our supply chain after Brexit due to our over-reliance on the UK land bridge. The purpose of Brexit is for the UK to take control of its own destiny, but a by-product of that process is that it will also assume a level of control over our supply chain.

The final key risk identified, which is not exclusively related to the air freight model, relates to the transfer of data. The UK land bridge will facilitate the transfer of key economic data through customs AEP and documentation to UK customs, now that the UK is a third country and trading competitor. This is confidential economic data pertaining to our supply chain.

The solution, unfortunately, is not the daily ferry service direct to France because this increases the key risk to the air freight model, which is speed. The solution is a cargo air bridge service into Liege that bypasses the UK. This will provide speed, reliability and autonomy to our air freight model and ultimately our supply chain. The investment in the cargo air bridge service not only solves a Brexit problem but also enhances Ireland's value proposition to prospective foreign direct investors and indigenous entrepreneurs.

I have put together an experienced team that has the skill set required to create, operate, manage and further develop a cargo air bridge service for the Irish market in the most efficient and cost-effective way. Our team has broad experience of leadership and experience of all modes of domestic and international transport, including broad experience in logistics, avionics, IT and finance.

The landscape of global trade has significantly changed in recent years, particularly with the emergence of e-commerce increasing the reliance on just-in-time cargo and logistics from business to end user. It is time for Ireland's supply chain model to adapt. It is time to put a best-in-class supply chain model in place in terms of connectivity and reliability. The Government has an opportunity to make a clear statement to the world that we are open for business and we mean business by investing in a cargo air bridge service. It is a simple choice: fall behind under UK control or create a world-leading air cargo hub to service current and future foreign direct investment and Irish indigenous manufacturing, including e-commerce and logistics industries supported by the Irish Government and the IDA, creating thousands of jobs.

Comments

No comments

Log in or join to post a public comment.