Friday the 24thof June saw the whole country waking up to a UK that had voted to leave the European Union.
For an island nation that relies heavily on sea, air, rail and road freight, this exit from the solidarity of the EU will prompt changes across every sector of the freight industry.
The most significant and potentially damaging change will be our exclusion from the current trade agreement that allows for free movement across Europe.
Whilst those in the ‘Remain’ camp are naturally concerned about any potential catastrophic effects on the UK economy as a whole, it must be pointed out our exit from the European Union will not be immediate.Instead the next two years will see the country slowly leave the union under article 50 of the Lisbon Treaty. What this means is that over the next 725 days, political leaders will negotiate the exact terms of our departure from the treaty and establish the new regulations for trade once we’ve left.
As stated above, the greatest cause for concern for the sector is the protection of free movement throughout Europe – without this, the transportation of goods across the continent will become increasingly costly for businesses here and abroad.
Currently EU legislation provides a framework for market liberalisation across a number of sectors including aviation, rail and shipping. Using air freight as an example, pre-Brexit, airlines had the right to fly between EU countries and the right to fly within an EU country.
Naturally, there are concerns that Brexit will remove these freedoms unless an agreement can be negotiated (in the same way as Norway has done). However this new agreement will need to be in place before the UK leaves the EU in approximately two years’ time. It’s expected that airfares will rise along with the cost of air freight.
Road hauliers will also be keen to have questions answered since most British operators adhere to EU rules which are overseen by the DVSA and the Transport Commissioner for Great Britain.
Many hope that as we start to disentangle our dealings with the EU, those in power will adopt an ‘if it isn’t broken, don’t fix it attitude’ to prevent logistical nightmares for hauliers coming to and from Britain.
It’s important to also look at the varied impact of Brexit on the shipping sector. For example, EU trade at ports such as Southampton and Felixstowe only accounts for around 30%, whilst for North East based port Tees and Hartlepool, along with Dover, EU trade is closer to 95%.
From a regulatory point of view, there are fears that conditions imposed on non-EU member states such as Albania and Serbia could also be applied to the UK, which would hinder the flow of freight across borders and make the process significantly more expensive.
David Wells, chief executive
of the Freight Transport Association (FTA), said: "We cannot allow new
bureaucratic burdens to hamper the efficient movement of exports heading for
customers and imported goods destined for British consumers."
"Britain may be out of Europe but it’s not out of business and the FTA will be leading the campaign on behalf of exporters and importers to keep trade procedures simple and the cost of international transport down.”
Meanwhile, Bob Keen, director general of the British International Freight Association (BIFA), added: "We will be making sure that those undertaking the negotiations recognise the fundamental role that our members’ freight forwarding services play in underpinning the movement of the UK’s visible trade with Europe.”
Attention has also been drawn to the new customs code (which was only brought in this May) as to how long the UK can expect to benefit from this EU regulation specifically designed for simpler movement.
Whether UK-based freight organisations choose to move their operations to Holland or Germany remains to be seen. However Richard Currie, UPS’s UK government relations director stressed that there would be no major changes just yet, apart from a slowdown in mergers and acquisitions involving British and EU companies, stating: "The way that we do business to and from the UK. isn’t going to change in the short term.”
Whilst a whole host of issues regarding ease of movement across the EU may currently be in question for those in the UK, once thing is for certain: the two year negotiation period means that any changes will be very gradual.
In the background, those involved in the sector can at least feel safe in the knowledge that both the FTA and BIFA will be working hard to ensure that any new regulatory measures have the interests of the UK’s freight industry at heart. We’ll be monitoring these developments closely to see just what the impact will be.