What should be considered on the road to Brexit for Thames Valley logistics businesses
Paul Dickie, transport and logistics partner for national law firm Gateley plc, explores the potential implications of Brexit for the UK logistics industry.
It is clear to say that those who make a living in the UK transport and logistics industry by delivering goods across international borders will inevitably be affected by a variety of issues as we approach the fog that is Brexit.
Trading in new markets
Countries in the European Commission purchase 44% of UK exported goods and as such are significant purchasers. Any changes to trade tariffs may endanger that market share. It is therefore important that we look to trade in new markets.
Replacement potential purchasers, for example Commonwealth countries, will require different logistics arrangements and we could potentially see an increase in marine and air capability rather than road. However this is only likely to happen in the medium to long term. Reviewing subcontractor arrangements to allow for flexibility and get outs is important to ensure that any risks that might occur are managed effectively and as a result, it is vital to explore new market opportunities, which will be critical for revenue replacement. Trading in new markets will also bring different cultures and challenges.
The cost of compliance
It is tempting to assume that Brexit will mean less inconvenient ‘red tape from Brussels’ and therefore less regulation and less cost in the future. While this is possible, the UK is, in our experience, a highly rules-observant jurisdiction likely to implement high degrees of internationally recognised systems of compliance. The method of enforcement of regulatory breaches should become more predictable in time with decisions being issued by UK law enforcement agencies.
In the medium to long term there may in theory be relaxations from the pro-employee regimes imported from Europe over the past 40 years or so. But a hard Brexit may severely limit the availability of certain types of worker, such as drivers, and lead to a corresponding skills shortage while training schemes catch up and fill the gap. It is expected that there will be many more enquiries and applications to allow overseas workers with specialist skills to be allowed to work in the UK.
Border controls
It is likely that there will be significantly greater levels of border controls which may well impact on the free movement of goods. This reduces efficiency and speed in the movement of goods, a critical component in the modern supply chain. It is probable that the industry will lobby heavily for this issue to be catered for and for industry and personal checks at borders to be the subject of wholly different regimes.
Day-to-day problems
The UK transport and logistics industry operates within a global marketplace. Issues as to fuel costs, implementation of globally enforced regulation and the need to implement technological advances in a less secure world still remain. The industry will cope with these; indeed it is arguable that the resilience of this industry to change and its ability to adapt quickly will enable the UK to prosper in the long term. Security of data, as well as of physical cargo, will be paramount.
Overall, as the fog of Brexit thickens, we can expect the UK transport and logistics industry to evolve in line with new protocol. Whether or not this will work for the best only time will tell.
Gateley plc provides specialist expertise for all maritime and global transportation issues. With a reputation for being “a sound name in the shipping sector”, the highly experienced team provides a world-class service to an international client base.
With a unique ability to deal with disputes arising at any stage of the transport and trading chain, whether goods are carried by sea, road, rail or air, in transit or warehoused, Gateley plc’s experts are known for delivering pragmatic, commercially focused and cost-effective advice that’s always tailored to the individual needs of clients.
