Now that Brexit is a reality and the ball has started rolling I think you’ll agree when we say :
Brexit is leaving a lot of industries with uncertainty about what to expect for their business.
But are all our concerns justified?
While many industries may have their heads in the sand about Brexit, logistics companies and particularly the haulage industry, are already planning for a very uncertain future.
It may not be all doom and gloom. In todays post we’re going to take a look at the Brexit impact on logistics. See the facts and possible effects on the logistics industry, providing tips on how to stay ahead of the game.
How will Bexit affect logistics and what do we know for sure?
- 44% of all UK exports go to EU countries
- Nearly 50% of road haulage in the UK is carried out by non-British drivers – most of them European
- Cabotage – the goods haulage in one member state by a vehicle registered in a different member state – is likely to be an immediate casualty of Brexit.
Borders and rules in logistics
If Brexit means reduced trade with mainland Europe then the demand for road haulage may fall, although paradoxically that could actually benefit the British road haulage industry because as long as we train enough new drivers to replace the foreign nationals who may no longer have the freedom to work inside the UK, this could benefit the British workforce.
While the UK’s transport/road safety legislation is unlikely to change – employment legislation undoubtedly will. Logistic operations should be reviewed now to ensure that continuity of service is maintained. This may mean more flexible recruitment policies, up-skilling current employees or relying more upon 3PL services.
Freedom of movement
Logistics management will require considerable adjustment to manage border controls. This may interfere with freedom of movement and cause goods to move more slowly. Warehouse services may become a border necessity and 3PL will need to be flexible to take account of what may turn out to be a complex set of varying trade rules.
Top Tip …………
Smart operators will call upon online warehousing possibilities to ensure that their logistics are streamlined and efficient long before Article 50 begins to bite.
Fuel and margins
When the AA suggested that a weaker pound could lead to an increase in fuel costs it led to serious concerns amongst hauliers. The recent report into air quality offers a scrappage scheme to all pre-Euro 6 diesel vehicles. However with a new HGV that is Euro-6 compliant costing more than £80,000 it’s unlikely that road haulage operators will receive anything like the scrappage benefit available to light commercial and private vehicles. These twin burdens will further challenge road hauliers.
Top tip ……….
Investment in fleet should wait until individual trade agreements have been hammered out. This will ensure capital heavy expenditure doesn’t end up being unsuitable for purpose. Once again, warehousing may become a crucial feature as hauliers could end up changing vehicles, as well as drivers, at national borders, simply to comply with employment and clean air rules.