Operation Stack and the stacking costs to UK businesses

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After a summer of continued turmoil across Europe (due to strikes, migrants and refugees) we look at the impact of Operation Stack to UK businesses when it is implemented on the M20 motorway.

With the Road Haulage Association estimating that 90 per cent of all road freight between the UK and the continent uses Kent's road network, with as many as 10,000 loads moving across the Channel on a daily basis, when Operation Stack is in force it can create a real headache for UK businesses.

Operation Stack was first introduced over 20 years ago and is a procedure involving the parking or “stacking” of lorries on the M20 motorway used by the British authorities when services across the Channel are disrupted or not fully operational - for example, the recent industrial action in France or due to the ongoing migrant and refugee crisis affecting Europe.

On 24 June 2015, Operation Stack was implemented due to industrial action taken by French employees of the MyFerryLink company. Operation Stack is implemented in various phases and more than 30 miles of parked lorries needed to be cleared from the M20 when Operation Stack began to be removed on 3 July 2015. When Operation Stack is in force, there are clearly adverse cost consequences for UK businesses and these are discussed in more detail below.

Although French employees have now agreed to end strike action following a resolution with the French government, it would seem that the impact on UK businesses is not yet over.

Following the removal of Operation Stack at the beginning of July, it was soon implemented again for Eurotunnel freight traffic as a consequence of the ongoing migrant and refugee crisis in Calais. Operation Stack has now come into force in excess of 20 times since the start of the summer as a result of both the industrial action referred to above and the continued disruption caused by migrants and refugees.

Various business groups are warning that the continued Calais migrant crisis is "a threat to the long-term viability" of UK businesses due to the costs and loss of revenue that arise because of the delays to travel through the Channel Tunnel. It is estimated that it costs approximately £1 a minute to run a heavy goods vehicle, so when Operation Stack is in force it can cost hundreds of pounds for companies trying to export to mainland Europe given that waiting times during Operation Stack can be in excess of six hours.

British exporters are also adversely affected by the costs and wastage incurred if perishable goods go off while lorries are stranded on the M20.

Security lapses also cause a real problem for companies where perishable goods are at stake. The Fresh Produce Consortium (FPC) have warned that goods have to be destroyed whenever migrants and/or refugees gain access to lorries because a trailer is “full of produce in open containers, so from a food safety point of view the only option is to destroy it.” Nigel Jenney, CEO of the FPC, has said that in excess of £10 million worth of fresh produce has been wasted since the Calais issues commenced.

The Freight Transport Association (FTA) believes importers and hauliers have been left "carrying the can" because of the migrant crisis.

The FTA estimates costs to hauliers of £750,000 a day through delays and spoiled loads with £2 million of fresh produce having to be disposed of each week.

Affected companies may also be unable to recover losses from their insurance policies as some insurance companies decline to cover the cost of written-off stock, invoking clauses which state that acts of civil disorder are not covered in the policies.

As if these costs of the crisis were not significant enough, British haulage firms have been hit with fines totalling £4 million after migrants were found in their vehicles. Both drivers and their employers have been fined up to £2,000 per migrant as they enter the UK. It has also been reported that the number of fines is up 50 per cent on last year, with the increase a direct result of thousands of migrants attempting to board vehicles bound for Britain.

The suppliers not only lose revenue through wasted produce (whether because it goes off or is disposed of through the contamination risk), but it also seems likely that the direct and indirect costs incurred by haulage companies will eventually be passed on to the customers as charges will inevitably increase for haulage services.

However, there are hopes that the burden on fresh produce and “quick to market” suppliers will be eased in the future. The transport minister Lord Ahmad has stated that vehicles carrying live-stock, shellfish and other fresh produce will be given priority when attempting to cross the Channel the next time Operation Stack is implemented and that such vehicles will be directly routed to the Channel Tunnel or the Port of Dover.
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