With the clock ticking inexorably toward the March 29 deadline, the question everywhere seems to concern the future of the UK and Europe with regards to Brexit. Almost two years have passed since the June 2016 referendum in which 16,788,672 leave votes secured a small majority and technically cleared the way for the UK to leave the European Union, but since then the actual outcome is anything but clear.
The possibility of a no-deal Brexit seems at the time of writing the most likely outcome as the UK and the EU have so far been unable to reach an agreement, and everyone is starting to imagine some of the possible post-Brexit scenarios as the eleventh hour approaches. What would be the consequences of a no-deal Brexit for the transport, logistics and hauliers sector?
Back in the beginning of January, some influential transport and logistics trade associations such as the FTA and the FTAI have urged companies and hauliers to start preparing for the no-deal eventuality. The FTAI in particular has advised hauliers to take immediate action and advance their preparations, or expect delays, red tape and costs after March 29.
The General Manager of FTAI, Aidan Flynn, has stated that "Whatever the outcome of the Brexit negotiations—deal or no deal—it will have a seismic impact on the UK's trading environment and in turn, the freight distribution and logistics sector on both sides of the Irish Sea. By leaving the Customs Union and the Single Market, the UK will trigger notable friction in the supply chain. There will inevitably be multi-agency checks at ports and the administrative burden placed on the logistics industry—particularly road haulage—will hinder business development and, in some cases, cripple the small to medium enterprise sector.”
If a no-deal Brexit is reached, the island of Ireland will be particularly impacted by the reinstatement of a hard border between the Republic and Northern Ireland—the Irish land border would become a frontier of the EU and there would be pressure to enforce similar customs and immigration controls to those that exist between the EU and any non-EU country.
Trade and immigration are two other major influences on the transport and logistics sectors. In the event of a no-deal Brexit, the UK would have to revert to World Trade Organisation rules on trade; it wouldn’t be bound by EU rules but would be subject to the EU’s external tariffs. The price of goods in shops for Britons could rise sharply as businesses would have to have to pass on the cost of tariffs on goods imported from the EU. With regards to free movement, the UK would be free to set its own controls on immigration from EU countries. However, the EU could respond in kind for Britons and this could lead to delays at borders not only for expats but the situation for workers in the logistics and transport sector is also unclear.
The Loadstar, an online news resource for the logistics industry, makes two uncomfortable observations on what could happen after a no-deal Brexit: the time EU trucks spend in the UK on average is 1.9 days; a timescale that would inevitably change in the event of a no-deal Brexit. This could force hauliers to look for business opportunities outside of the UK when it becomes a much less efficient, more expensive and time-consuming country with which to trade. Another potential problem, is the massive presence of EU vehicles on the Dover-Calais route—it has been estimated that 85% of the trucks there are from the EU, posing considerable logistical challenges for both exporters and importers.
The anxiety concerning potentially huge delays at the border has already been considered by many businesses, but let’s focus on the healthcare sector for a moment: in the news just a few days ago, was a pharmaceutical company that saw fit to stockpile vital emergency equipment as the more stringent custom checks possible after a no-deal Brexit could potentially delay the delivery to patients in emergency situations. The head of NHS England, Simon Stevens, has admitted that getting logistics right is crucial to guaranteeing the flow of medical supplies.
