Stephen Kelly warns of £478 Brexit bill per export shipment for local factories

The boss of the North's manufacturing federation, Stephen Kelly, has warned MPs local factories already find it difficult exporting from Derry to Donegal without the addition of a £478 charge per cargo shipment he estimates will arise post-Brexit.

Sunday, 5th March 2017, 8:00 pm
Updated Friday, 24th March 2017, 11:02 am

The Manufacturing NI, Chief Executive, told members of the Northern Ireland Affairs Committee last week that the depreciation of sterling after last year’s referendum did make local exporters temporarily more competitive.

But he said the North’s small and shrinking secondary sector had enough challenges without added tariffs and red-tape.

He suggested 91 per cent of firms on the island have no experience of operating in a tariff environment and estimated additional red tape for Northern companies would cost almost £500 extra per export shipment post-Brexit.

“We have actually been speaking with some firms, and I have some evidence here for the Committee today, on just what that country‑of‑origin certification and the paperwork around that would actually mean in terms of cost to an individual business,” he said.

“Between the development and the time required to produce those certificates, plus the letters of credit from banks that are required to export alongside, the total is £478 per shipment.

“That is roughly the same price as shipping a container from Northern Ireland to GB or two-thirds of the price of shipping a full container from south-east Asia to Northern Ireland, for that matter.

“That £478 admittedly has staff time included there, because a lot of this is manual at this point. Even if some of that were made digital, it only knocks about £51 off that, so it is £400‑plus per shipment for each one that goes out and potentially for each shipment that comes in as well,” he added.

He suggested this would seriously affect local firms.

“The implications that that has for our exporting firms are pretty profound, to say the least. The reality is that those are the sort of costs that firms will try to avoid, plainly and simply,” he told the committee.

“We are already at the end of every pipeline in Northern Ireland, whether that is for energy or for gas, at the beginning and the very end of the supply chain, being an island off an island off a continent. People will take steps to avoid those additional cost burdens being applied to them,” he said.