Despite the initial date for the UK’s departure from the EU having already passed, the UK still remains part of the union. The Brexit deadline has been extended, but it’s still incredibly unclear what’s actually going to happen.
On one hand, the whole thing could end up being cancelled. But on the other, we could see a no deal Brexit, which could cause huge disruption across the continent. When Brexit is finally implemented, it could have a catastrophic impact on the road haulage industry.
Here are 5 ways the European logistics industry is preparing for Brexit.
1. They’re Finding New Space to Stockpile
The prospect of a no-deal Brexit threatens shortages both in the UK and elsewhere in the EU. Despite the passing of the initial date for Brexit, people still don’t know just how disruptive Brexit is going to be.
In the event of a no-deal Brexit, there could certainly be a period of time where it’s impossible to ship anything into the UK from Europe. This has meant that many companies are stockpiling things they’ll need. This includes items like machine parts and medical supplies.
Many companies are investing in significant amounts of warehousing space. In normal circumstances, they wouldn’t have done so.
This is having a knock-on effect on UK industry. It’s making it more difficult for companies to find the warehouse space they need.
Frustratingly, it seems that there’s a reasonable chance Brexit won’t even go ahead at this point. So all of the stockpiles could end up being for nothing.
2. A “Get Ready for Brexit” Campaign in the Netherlands
The Netherlands is one of the countries that stand to lose out the most from Brexit. A huge amount of goods are shipped to and from the UK through the port of Rotterdam, which is one of the biggest shipping ports in the world.
The Dutch believe that Brexit could result in some extreme congestion around the port. They also believe issues with technicalities could result in shipments having the wrong paperwork.
In order to make sure there’s as little disruption as possible, the Rotterdam port authority is working with the surrounding municipalities and terminal operators. That way, they ensure that operations go smoothly.
They’re doing “dry run” simulation exercises to study the possible impact Brexit will have on the port. Also, they’re trying to create additional parking areas that will hopefully ease congestion around the port.
The Dutch hope these dry runs will identify any bottlenecks that could cause problems when the UK finally departs from the European Union.
3. The Creation of New Distribution Networks
Since Brexit is set to create significant congestion in various distribution networks, it’s possible that there will be new networks created to facilitate the movement of goods around the continent.
For example, the port of Hamburg in Germany believes that a lot of the congestion could be bypassed if more goods are routed through the port. When transporting goods across the English Channel, generally, trucks are used. Shifting a lot of these shipments to short sea deliveries via Hamburg could help to minimise the disruption in Europe following the UK’s exit from the European Union.
While Brexit may cause chaos, many people could actually turn it to their advantage. How? By creating new distribution networks that wouldn’t previously have been viable.
4. Ferry Contract Controversy
The UK government has been criticised heavily for not taking Brexit preparations seriously enough. The British Department for Transport attempted to secure additional shipping capacity by contracting more shipping companies to work on transporting essential products, such as medicine. This is seen as a necessary step in case a no-deal Brexit causes shipping chaos in the UK.
One of these contracts they struck was with UK-based company Seaborne Freight. This £13.8 million contract was supposed to create a shipping network between the UK port of Ramsgate and the Belgian port of Ostend.
Unfortunately, it quickly became clear that Seabourne Freight didn’t have any experience operating ferries. They also didn’t have any vessels to fulfil the contract with.
Following these revelations, the main financial backer for these ferries withdrew their financial support.
5. Big Parcel Companies Are Dealing with Uncertainty
For companies that are responsible for shipping goods across the continent (such as DHL, UPS, and FedEx), Brexit is going to be quite a significant problem. These companies have been investigating ways to ensure disruption is minimised.
For example, all of these companies have launched dedicated Brexit websites to help their customers understand exactly how they could be affected by Brexit. For instance, they’ve given advice such as how to handle VAT rules and customs declarations.
These companies hope that their wide logistics networks will give them the flexibility they need to adapt to any kind of Brexit. These companies are also hiring new customs staff who will work at various parcel hubs.
Unfortunately, the amount of planning possible is somewhat limited. This is due to the uncertainty of what kind of a Brexit we’re going to get or even if it’s going to go ahead at all.
What’s Next for the Road Haulage Industry?
As it stands now, the supposed date that the UK will actually leave the European Union is October 31, 2019. This date is due to an extension that was granted by the EU after it became clear it wasn’t feasible for the UK to leave on the date initially agreed upon.
Some commentators believe that Brexit is now less likely to actually happen than ever. Unfortunately for the road haulage industry, they need to assume the worst and plan for a disruptive no-deal Brexit.
If you need to work with a logistics or transport company soon, then get in touch with us.