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The Impact of Brexit on the Logistics Industry

Posted on Wednesday, March 30th by Pallet2ship logo

The topic of Britain removing itself from the European Union has generated significant debate over the past year, setting itself apart as one of the central themes of the General Election campaign. The fierce confrontations between UK's political parties have led to the initiative of an in/out referendum being organised for the British public to decide whether it would be better for the United Kingdom to stay in the European Union or not. As expected, a potential withdrawal of the UK from the EU stage would affect a large number of industries, the logistics industry included, by limiting its trading activity considerably.

The impact on Britain's trading activity outside the continent

At present, over 52 per cent of Britain's export goods and services are scheduled to reach various countries of the European Union, which only serves to prove the particular impact of the European market on Britain's trading endeavours and economy. This outstanding role is further demonstrated by the major impact the various extended delays registered at the Calais ports have had on the import and export activity carried out across the English Channel lately.

Naturally, a potential exit from the European Union would involve the country's entire economic activity being reorganised. This includes new trading partnership conditions being proposed and implemented in terms of its importing from and exporting to EU countries, as well as the import and export rates being recalculated. Of course, while the debate on whether such a decision would benefit Britain or not is intense, the risks are rather clear, an increase in the trading rates being bound to cause a drop in the demand for imports from and exports to EU countries and therefore, for logistics services.

The impact on Britain's trading activity within the continent

The disadvantages of Britain's exiting the European Union are equally clear in the context of the trading activity carried out within the EU borders as well. For instance, Britain's EU membership allows goods being moved from and to it freely, whereas its leaving the European Union is bound to impair it by annulling the convenience of passport control fast-tracking and other similar procedures. Instead, all goods moved from and to Britain would be subject to thorough assessment for safety purposes, which is bound to cause extended delivery times, additional paperwork to be handled, increased trading costs and inevitably lower customer satisfaction.

In other words, the topic of Britain's reconsidering its position as a member state of the European Union is a complex one, the advantages and disadvantages being not only numerous, but very solid too. However, the risks and impact of a potential change in status in relation to the European Union on the logistics industry stand out as being very clear as they reflect a potentially lower demand for logistics and fulfillment services as a result of the trading activity carried out between Britain and the countries in the European Union community being less intense.

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