"Chaos And Frustration": French Trucking Paralyzed Amid Brexit Chaos

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by Tyler Durden
Saturday, Dec 12, 2020 - 10:35 AM

Traffic backlogs and other delays are already forming as Europe, particularly the countries that share direct land or sea trade borders with the U.K., experience a rush of goods attempting to cross the border before Britain leaves the European Union Customs Union on Jan. 1. 

Brexit stockpiling is causing 10-mile highway backups and five-hour delays in Calais as Brexit negotiations with the E.U. have yielded no progress. With neither side willing to give ground, British Prime Minister Boris Johnson has warned businesses and the public to get ready for the no-deal scenario.

According to The Guardian, citing a source close with the president of the Hauts-de-France region, there has been "50% more heavy goods vehicles on the approach roads to the French port and Eurotunnel in the past three weeks."

"November and December are always busy months, but extreme stockpiling because businesses are trying to get goods into the U.K. before Jan. 1 is the main cause," the source said.

The source continued: "Normally we have about 6,000 trucks, but now it is about 9,000. It shows the extreme of the consequences of Brexit whether there is a deal or not. Trucks are having to slow down all along the A16 back to Dunkirk with delays of up to 17km."

On Thursday, BoJo warned that the odds of a no-deal outcome were high. On Friday, Reuters quoted an anonymous E.U. official saying "the probability of a no-deal is higher than of a deal." 

The situation is becoming challenging for companies stockpiling as delays in crossing the Channel are causing severe headaches in the U.K.

Honda and Jaguar have had to halt production temporarily because of parts shortages, and it emerged on Friday that Ikea had been besieged by complaints because of what it called "operational challenges" as shipments of its flatpack furniture are held up at clogged ports. -The Guardian 

A Eurotunnel spokesman said heavy traffic delays on the British side would continue for the next three weeks. Recent traffic data of the tunnel show traffic is up 11% on last year for November.

"We are seeing several hundred trucks above forecasts on midweek days," the spokesman said. 

The spokesman also said Eurotunnel contingency plans could shift the trucks to the trains to lessen the congestion. 

"We expect it to be like this for the next three weeks with some tailing off as we get close to Christmas and then drop off in the first week of January," the spokesman said

A no-deal Brexit could generate financial turbulence for markets in the coming weeks. 

Analysts at Citigroup believe British banking stocks could fall between 10% and 20% since no deal would be a big negative surprise. 

To be sure, most Wall Street banks still believe a deal will be reached at the 11th hour - but what's happening on the ground suggests otherwise. A failure to secure a trade deal would mean tariffs between UK and Europe, a move that would significantly impact the UK economy.