How Would UK Freight Forwarders Operate After Brexit?


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On June 23rd, 2016, many Britons voted in favour of Brexit, or UK leaving the European Union. This has had a significant impact on the industry of logistics and freight forwarding. At present, the EU and UK are still negotiating the terms & conditions of exit and would continue to do so up to 2 years. But many logistics management firms, shippers and manufacturers fear that once Brexit receives a green signal, they would face a drawn-out period filled with instability and uncertainty.

According to the major firms providing freight forwarding services in UK, negotiators in Brussels and London must understand that the burden of labour restrictions, tariffs and trade barriers would greatly hamper competitiveness. Besides that, Brexit will also limit the growth of retailers, manufacturers, and the whole logistics & freight transportation industry.

Post Brexit vote, the value of the pound dropped to a 3-decade low compared to the dollar. This sharp reduction has hit many US freight forwarders having exposure to UK and Europe. However, despite of the fall in share values, many logistics management companies have announced that they won’t alter their commitment towards UK before the new terms of trade partnership with the UK are sorted out.

Uncertainty is the biggest challenge that the entire logistics industry might have to face. Since the Great Britain isn’t a Schengen area member, it does not use euro. In spite of that, there exist regulations which facilitate the trade with EU, but they would be lost after Brexit, leading to cost increments and delays within intricate supply chains. The United Kingdom will not be able to use the trade facilitation of European Union Customs for more than 50 percent of its export operations. Meanwhile, duty imposition can also lead significant increase in costs of international shipping and transportation of goods.

The international haulage members of British Freight Transport Association were polled recently on several issues concerning the negative consequences of Brexit. Their major priorities included:

  • Complete access to European single market
  • Access for goods without any tariff
  • Continued access to single market in order to get the services

As of now, things are quite speculative after the referendum. Therefore, it is recommended that everyone keep their cool at present and try to plan for the brand new phase which would prevail once UK leaves EU. No matter what happens, there has to be smooth flow of cargo throughout EU.

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