It now seems likely that the UK’s membership of the EU will end in March 2019. The seemingly endless negotiations continue as issues, such as the customs union and other finite details regarding the transition are thrashed out. Many businesses and individuals, however, are still unclear about how the divorce from Europe will actually affect them. Here we look at how Brexit may impact the European logistics industry.

Exponential Growth

The logistics industry has enjoyed exponential growth over the last twenty years and this, to a large degree, is due to the global explosion of e-commerce. The industry has also benefited from the fact that the EU operates as a single market and therefore there are no import-export tariffs.

Companies like Tuffnells, who run a fleet of logistics vehicles across the UK and Europe have thrived under such economic and political conditions, but now face some uncertainty as to what the future will hold once the Brexit negotiations are completed - for example, tariffs could be reintroduced and ultimately this would have an impact on operating costs.

The Workforce

Another area that could see an impact as a result of Brexit is the logistics industry workforce. Currently, workers from all over the EU are free to work wherever they choose. In the UK, 10% of drivers in the logistics industry come from other EU countries.

If the movement of such workers becomes more restricted as a result of Brexit, then the UK, in particular, could face a shortage of drivers. In such an event, logistics companies would be forced to increase the salaries of drivers in the hope of filling the gap.

Border Controls

Increased costs could also come from the tightening of border controls. Once the UK is no longer part of the EU border controls, between Northern Ireland and the Republic of Ireland for instance, will need to be stricter and it is estimated that this could cost businesses billions each year – these costs would, at least to some degree, trickle down and be felt by the logistics industry and customers alike.

If such costs and inconveniences are to be avoided, it is vital that the talks that take place between now and March 2018 are progressive. They should look to circumnavigate the political egos and muscle flexing in order to find a solution that helps, not punishes, the businesses and individuals who will be affected by the outcomes.

Published by Alex Hales