Brexit: 5 Issues The Logistics Industry Could Face

Now I’m sure you may be tired of hearing about Brexit and all its twists and turns, but have you ever stopped and considered what it may do to the logistics industry? The outcome may have some big consequences, and we have compelled a list of the top 5.

1. Trading

According to the Government, 44% of all the UK’s exports are distributed to countries within the EU. The worrying factor is when we officially leave the EU, this number may diminish, leaving a significant dent in the countries GDP.

This can affect the logistics industry as a reduced amount of trade across mainland Europe will lead to a decrease in demand for road haulage. Even if the rate of exports maintains a constant level, road haulage may still be reduced due to more negotiated trading deals with other, non-EU, countries that may not be easily accessible by road.

On the plus side, supply chain expert Professor Alan Braithwaite, said any change that does happen will not happen immediately. “Established patterns of trade are difficult to change quickly because of capacity,” he remarks. “And all the time trade flows, we will need logistics.”

International Trade

2. Tighter Border Controls

When leaving the EU, many in the logistics industry are expecting stricter border controls.

Professor Braithwaite stated, “Over time, Brexit will create barriers at borders for the administration of trade in both directions, That will impact logistics efficiency, because goods will move slower.”

However there is still an uncertainty about how much the border controls would change as a result of Brexit.

3. A Driver Shortage

One potential knock-on effect of leaving the EU could be tighter migration controls. This could mean a reduction in the number of EU citizens working for UK-based companies. This could have a huge effect on road haulage as it relies heavily on drivers from other EU member states.

With reduced opportunity to recruit these drivers, the industry’s ability to serve the economy could be compromised. A solution to this may be to have more investment in recruiting and training UK drivers through schemes such as the Trailblazer apprenticeship programme.

Global Logistics

4. Legal implications

As with so many other aspects of Brexit, it is difficult to predict the legal ramifications of the vote to leave.

It is stated that  the UK’s transport and road safety laws are unlikely to be changed dramatically because of Brexit. One law to keep your eye on will be the law of EU non-resident workers, working in the UK.

“Now would be a good time [for operators] to review the systems and records in place to ensure that such drivers are properly employed, properly inducted and properly supervised,” – Richard Pelly.

5. Costs

It is possible that Brexit could cause an increase in operating costs for logistics companies.

A further area of concern is fuel prices. The AA has suggested that a weakened pound as a result of Brexit could increase the cost of fuel. Most experts agree that the biggest influences on fuel costs are the global oil price and the fuel duty imposed by the UK government