Aren’t you getting frustrated listening to different scenarios about Brexit every day? Brexit is around the corner and we still do not have a clear picture on what is going to happen to UK and the world after the 29th of March 2019. Logistics is an industry that has adapted to economic and political changes throughout the years.
So, why do we worry about Brexit?
Is the fact that United Kingdom will leave the EU, with or without a deal, so important that will change the landscape of the global supply chain services forever?
It is true that 40% of freight being lifted and moved within the UK, has a non-UK origin or destination. That means, that the UK is quite a determinant for the global logistics industry.
Currently there are two scenarios on the table of the European Union. The first one is the deal scenario according to which UK leaves EU while maintaining its access to the single market, but with some limitations mostly on the free movement of labour. If this deal between the two parties occurs then UK will remain in a single custom market with the EU, meaning that there will be no tariff exchange for the import and export of goods.
The second scenario is the one where the UK leaves EU without a deal. In this case, a policy of charged customs will apply to the UK and EU. In other words, in each border, custom tariffs will be charged according to World Trade Organization (WTO) agreements.
Both scenarios could be beneficial or harmful for both sides. So, the question is how you overcome all the challenges and create advantages for you and your business.
To begin with, while air freight is less that 1% of the international tonnage entering the UK, it still counts for 45% of non-EU tonnage that enters the country. In some cases, air freight even lands on major European airports (Amsterdam, Paris) and is trucked to the UK and vice versa.
In post Brexit period, delays can occur that will create the need for new supply chain processes and for more capacity both nationally and internationally. If that occurs, then the shippers’ preferences may change, leading to different ways of importing their goods, or the prices will rise due to delays and short capacity. Further, a delay across the channel will result in increased traffic in ports and higher volume of holding inventories, requiring larger warehousing facilities and better pipeline management
The best way to counteract all these results is to work closely with your freight forwarder and keep them informed for all the changes in your stock and lead times. For instance, if you collaborate with an online freight forwarder such as Haulystic Innovations, you can discuss together all your requirements and doubts and you can get a supply chain process tailored to your needs.
As far as the changes in custom clearance are concerned, it is getting more and more clear that in case of a no deal, a customs border would be implemented and all goods would have to go through checks. In that case, delays in delivery schedules will occur and the stock will increase once again. In addition, HMRC currently handles approximately 90 million import and export declarations that belong to countries outside the EU. This number will rise up to three times if UK leaves without a deal.
What you can do under these circumstances is again to tightly collaborate with a specialist that can give you the right answers at the right time. A specialist like this, will help you avoid inaccurate or redundant declarations and focus only on what matters while saving you money and of course time. We, at Haulystic Innovations, have access to official up to date information about customs and everything concerning Brexit. Further, after years of experience and knowledge of international freight forwarding, we can assess all information and prepare a customized approach including any custom clearance requirements.
The two things that you should have in mind are:
1. Keep your Commodity Codes up to date.
2. Check whether you need export license for your products.
Additionally, in such times, innovation is rewarded. Every logistics company should leverage on emerging supply chain technologies that will exponentially improve the management of operations and speed up the process at the borders. A Digital Linehaul Sourcing Specialist, such as Haulystic Innovations, has embedded technology in its business model, making the procedures easier, more accurate and safer. The environment is highly secure and the payments are transparent.
Trucks entering the UK from Europe are estimated to be around 18,000 which is approximately 15% of the UK trucks that are registered with 30 tonnes and above. These trucks are subject to cabotage rules meaning that a vehicle registered in one country can distribute products in another country. So, it is very likely that if cabotage rights are withdrawn, then the trucking capacity in the UK will be decreased and the prices will rise.
UK hauliers do not have sufficient capacity to meet the demand for national freight forwarding. In case of a transport shortage due to cabotage rules being withdrawn, the delivery times might change and delays may occur. What you need under these circumstances is an experienced logistic partner. At Haulystic Innovations, each time we assess the situation and create a plan with different alternatives so we can make sure that your products will arrive at the final destination without any delay. For instance, if there is congestion at ports or roads, we will research on the best option and recommend an alternative that is in alignment with your requirements.
Last but not least, the one certain impact of Brexit on the logistics industry will be in the area of employment. Currently, at the freight and logistics industry, there are at least 2.9 million people employed, including only the distribution and warehouse staff. Moreover, there are at least 400,000 available workers from EU while it has been stated that the UK has a shortage of 50,000 HGV drivers.
In a “no deal” scenario, the Government has guaranteed the protection of the rights of EU citizens living in the UK. However, you have to research on initiatives that protect the rights of your workforce. We work closely with organizations such as Migration Advisory Committee, in order to have a better understanding on how post-Brexit will affect our workforce, and we try to consult and offer support to all our employees so we can handle your delivery faster and more effectively.
The impact of Brexit for freight forwarders and logistics companies will be determined by the specific arrangements for border management. The degree of access to the single market will resolve all questions and determine the custom tariffs, procedures and documentation for importing and exporting products at the EU border.
The one thing that we can do right now is to prepare our business and prepare our clients for a smooth transaction to a post-Brexit period with or without a deal.
We can do it together!
Work with Haulystic Innovations, so you can get up to date information about Brexit and customized logistics services for your products.
Start by booking your shipments online.