Brexit and the Haulage Industry: What Are the Potential Negative Impacts?

On the 23rd of June, 2016, the United Kingdom shocked the world by voting to leave the European Union. Despite over two years passing, the UK has still not officially left the union.

haulage industry Brexit graphic
Brexit has serious implications for the haulage industry

The UK is officially set to leave on the 29th of March, 2019. Despite this date being so close, it’s still unclear exactly what Brexit will mean.

The chances of a no-deal Brexit are mounting by the day. This could have serious implications for the haulage industry. Here are a few of the potential complications that could be caused by Brexit.

Reduced Trade

With the current arrangement, the UK is a member of the European single market. This allows for frictionless trade between the UK and the other 27 members of the EU.

When the UK officially leaves the EU, it’s unclear if this practice is going to continue. It’s possible that the UK will leave the European single market.

This could have a significant impact on the haulage industry. It’s estimated by government figures that around 44% of UK exports go somewhere in the EU.

If the ability to export goods to the EU is compromised in the event of a no-deal Brexit, it could result in reduced trade and, therefore, reduced workload for haulage companies. Unfortunately, despite the official exit date being so close, it’s still unknown exactly how trade is going to be affected or if the UK will even leave the single market.

New Border Control

Another issue surrounding Brexit and trucking is the issue of new border controls. While the overall volume of trade might not end up being reduced, Brexit is likely to create new border checks, which will certainly slow down the flow of goods.

One of the key borders that’s likely to cause problems for UK hauliers is the Northern Ireland/Republic of Ireland border. It’s been completely frictionless for decades. If new border checks are going to be introduced, entirely new infrastructures and logistics systems will need to be put into place.

New borders will likely cause significant delays and issues for the haulage industry. As with most things involving Brexit, it’s still impossible to say exactly how things are going to work post-Brexit.

Even with only weeks to go until the UK formally leaves the Union, we can only speculate as to what the impact on the borders will be. Given that the government has been investigating the possibility of setting up “lorry parks” near the border checkpoints to help deal with delays, it doesn’t look good.

A Shortage of Drivers

Another big problem that the haulage industry will likely face in the days after Brexit is a shortage of drivers available. As the law stands now, there’s not only free movement of goods between the UK and other EU countries, but also the free movement of people. Citizens of the EU are permitted to live and work in any of the other EU countries.

In the haulage industry, this means EU drivers can come and work for UK companies with virtually no additional paperwork or bureaucracy. When the UK leaves the EU, it’s likely that this free movement of people will stop.

Since the haulage industry relies on EU workers, this could have a huge impact on the industry. It’s essential that measures are taken to minimize the impact of such a loss of potential workers. For example, more investment needs to be made in training UK nationals to be drivers.

New Costs for the Haulage Industry

It’s certainly possible that Brexit is going to increase the cost of doing business for the haulage industry. For example, it’s highly likely that increased trade tariffs will decrease profit margins for exporters. When this happens, it’s possible that many exporters will try and pass off the financial hit onto the haulage industry.

Additionally, complications arising from the lack of freedom of movement of goods and people around the continent could result in reduced operating efficiency. This could also reduce profit margins for the haulage industry.

Another big issue is possibly increased fuel costs. Due to the weakened pound, fuel costs are expected to rise in the days following Brexit.

Reduced Business Due to Companies Leaving the UK

Many companies have already started leaving the UK due to the uncertainty of Brexit. If you happen to work with any of these companies, this could have a huge impact on your work. By checking out the list of companies that have plans to move some or all of their operations abroad due to Brexit, you can make preparations.

This is devastating news for many haulage companies, as many of them rely on one or two contracts in order to stay afloat. With many businesses leaving the UK, this will almost certainly have a “knock-on” effect, causing many businesses to lose out on profits and maybe close down.

Contracts Turned Down Due to the Uncertainty

As we get closer to the official Brexit date, many haulage companies have had to turn down jobs due to the uncertainty of Brexit. One haulage company, for instance, had to walk away from a huge contract with a touring band, as they could not guarantee their ability to get the job done.

It has even been speculated that Brexit could have a huge impact on summer music festivals, since bands and artists may have issues transporting their equipment into the UK.

Reducing the Impact on the Haulage Industry

The problem with Brexit for the haulage industry is that no one is quite clear on exactly what’s going to happen. This makes coming up with a watertight plan extremely difficult.

As the impact is difficult to predict, it might be necessary to have multiple contingency plans in place for your haulage company. By looking into the future and being prepared for any outcome, that’s the best way to reduce the impact Brexit will have on your livelihood.

Does your business need items distributed across the world? Then get in touch with us today!

Is there a positive note?

On the positive side, departure from the EU will have little effect on the underlying laws governing haulage industry activities. The Goods Vehicles (Licensing of Operators) Act 1995 is domestic legislation and will not be affected by Brexit. Equally, drivers’ hours legislation initiated in Europe through EC regulations has been adopted within the Transport Act 1968 and will remain.

Because of their potential benefits in terms of enhanced road safety and improved enforcement, it is likely that laws on smart tachographs will be implemented in the UK too. Changing transport legislation could reduce UK hauliers’ ability to operate and compete on a level playing field in Europe.

Whatever happens with Brexit, we should also bear in mind that in the medium to long term, significant changes to the transport industry are expected in the shape of driverless trucks and electric vehicles, all of which look set to alter the landscape almost beyond recognition. 

Leave a Comment

Your e-mail address will not be published. Required fields are marked *