For the transport and logistics industry there has been endless speculation on how Brexit will impact the way we trade with the EU, with potential repercussions cited across all areas of the supply chain. Although Brexit discussions are ongoing, the FTA has reminded logistics businesses not to be ‘lulled into a sense of complacency’. A No Deal Brexit is still a very real possibility and logistics businesses should continue to prepare for this.
So, what will be the Brexit impact on businesses in the logistics sector?
The Brexit impact on logistics businesses is still unclear, but here is a brief recap on some of the key issues road hauliers could face post Brexit.
Post Brexit Border Checks
The industry is still waiting to find out what documents and certificates will be required by trucks and licences for drivers post Brexit. The main concern is how additional delays in Calais or Dover will impact the supply chain. According to the FTA, “A mere extra two minutes to process a lorry would cause queues of over 17 miles at Dover.” Not only will this impact operating efficiency and delivery times, but it will also cause significant traffic problems with the surrounding road networks.
Economic Impact of Brexit on Logistics Companies
Currently a large percentage of UK exports go to EU countries and the transport of these goods is widely facilitated by the road haulage industry. If trading with EU countries declines, so will the demand for road haulage. Even if exports overall don’t reduce and deals are negotiated with non-EU countries, these countries may be less accessible by road, resulting in less work for the road haulage sector.
With an ageing workforce that is already short approximately 60,000 drivers, many UK logistics businesses rely on sourcing drivers from Europe. In fact, it’s estimated that approximately 10% of the sector’s workforce is made up of drivers from EU nations. Post Brexit, tighter migration controls could reduce the number of EU citizens working for UK-based companies, therefore exacerbating the existing driver shortage crisis. If EU workers are denied access to work as the UK leaves the European Union, employers could be left with some significant gaps in their workforce.
There is a genuine threat that Brexit could directly increase operating costs for logistics companies. In the first instance, many questions are being raised around fuel, as the UK relies heavily on imported natural resources. Although Brexit may not directly affect fuel prices, the uncertainty surrounding it could have an impact on the price of fuel if the sterling to dollar exchange rate is negatively impacted. Typically, as the pound goes down in strength, fuel prices go up.
In addition, reduced freedom of movement combined and the introduction of more lengthy border checks will impact operating efficiency and reduce hauliers’ margins. Any introduction of tariffs may also increase operating costs for transport companies.
Dealing With the Brexit Impact on Businesses
Mark Robinson, Managing Director at Acclaim Logistics commented: “Despite the ever-shifting deadline and ongoing uncertainty regarding the Brexit impact on logistics, I believe the FTA is right: preparation for a ‘No Deal’ scenario is the key to keeping Britain trading efficiently. For logistics businesses such as ourselves, who manage supply chains between the UK and EU, we need to be ready to adapt to tackle ‘No Deal’ trading conditions head on if we are to avoid rising costs and delays which will impact our operations. We are closely following the advice of the FTA and Road Haulage Association with regard to Brexit preparation and would like to reassure our customers that it’s business as usual regardless of the outcome.”
Acclaim Logistics offers fast and reliable pallet distribution throughout the UK and Europe and cost effective European road freight services for full and part loads.
If you have a UK or European pallet for delivery or would like to enquire about our road haulage services, please contact Acclaim to discuss your requirements on 023 8086 0722 or email us today.