How Will Brexit Affect the Logistics Industry in 2017?(businessinsightstoday.com)
Over six months after the vote to leave the European Union was held, uncertainty still looms large for the logistics industry. Firms who have a large client base in the EU could have a lot at stake, as the decision to trigger Article 50 could take place sometime in 2017.
It seems that the UK government are keen to see the country leave the EU sooner rather than later. However, wrangling over putting some kind of trade deal to soften any potential blow could cause logistics companies plenty of concern. So, what impact, if any, will be felt next year?
In an attempt to get the best possible deal for UK businesses, Secretary for Brexit Liam Fox MP has been trying to ensure that any increase in costs of trading with the EU would be minimised. However, his attempts look to be in vain, as legal experts suggest this move is illegal.
Before Article 50 is invoked, attempts will be made by Mr Fox to ensure that, at the very least, the UK remains a member of the Customs Union, much like Turkey. However, at a time when Turkey is edging closer to becoming an EU member, such a move would be unlikely to take effect.
Put simply, to trade internationally, any logistics company based in the UK will find it far more expensive and will have to budget accordingly. Shipping between countries could take longer to do as well.
Post-Brexit, movement between the UK and EU is something that will become more restricted. For the logistics industry where travel is everything, this problem could prove particularly difficult to overcome. More paperwork will be involved when crossing borders, which can be time-consuming and difficult to deal with for bigger firms who have lots of continental clients.
Passports for HGV drivers will need to be updated, whilst visas will be needed to travel to France, Germany et al. Travel beyond the EU and EEA nations (Norway and Iceland) could be more problematic too. Being an EU member did make travel between the Schengen Zone and other areas such as the US and Canada simpler, but new paperwork will need to be set up for business travel.
Recent estimates from the CBI suggest that there could be a shortfall of some 35,000 HGV drivers post-Brexit. This is because a typical logistics company may consider hiring drivers from EU member states for jobs on the European mainland.
Hiring drivers from mainland Europe makes sense as they have the relevant experience needed to drive in different countries, adapting to different laws. With a shortfall in skill, it will be difficult for deliveries to be made as regularly.
While there is no knowing for sure what trade and free movement agreements will be in place, it seems that Brexit will have a sizeable impact on the logistics world. Paperwork, increased costs and hiring new drivers will all need to be taken into account. For the time being though, it’s worth keeping an eye on the news in the coming months before Article 50 is triggered.