Since the historic referendum on 23 June 2016, Brexit has been a seismic event, reshaping the landscape of the United Kingdom’s logistics and transport sector. With the official departure from the European Union on 31 January 2020, followed by subsequent negotiations and agreements, the impacts continue to reverberate throughout the industry, raising questions about its future trajectory.
There’s no denying that the aftermath of Brexit has seen logistics businesses grappling with a host of operational adjustments, from managing delays in transportation to navigating intricate import and export regulations. Meanwhile, compliance with new import and export procedures and health regulations have posed formidable challenges for businesses of all sizes. Nick Ghia, Chief Revenue Officer of Transporeon, a Trimble company, explores how Britain’s split from the EU has affected the logistics Industry as a whole.
Paperwork at UK Borders
Due to customs changes being introduced as a result of Brexit and the end of free trade between Britain and the EU, the knock on effect has seen the introduction of more paperwork and logistics businesses having to meet new product standards which are stricter, particularly when trading restricted goods and livestock, to name a few. These new customs regulations have made it more difficult and time-consuming to ship goods between the UK and the EU. Ultimately this means that businesses reliant on international trade have had to adapt to the new regulations, which has added costs and delays.
Brexit’s impact on UK borders is starkly evident in the realm of food exports, with significant financial burdens placed on businesses sending products to the EU. In fact, in recent reports, lorry drivers from continental Europe are set to reject jobs taking them to the UK unless delays are reduced and driver conditions improved at post-Brexit border posts. The delays are due to the border checks for plant and animal products brought in on 30 April. Not only this, but the requirement for exporters of foods of animal origin to obtain veterinary sign-offs and export health certificates (EHCs) has led to a significant rise in costs. And with data from the Office for National Statistics showing the amount of meat products exported to the EU from the UK in 2023 totalled £1.26bn, a 17% drop from the £1.53bn exported in 2019, this notable decline in exports, combined with the rising costs associated with Brexit, will affect smaller producers. Consequently, some companies have faced reduced profits or even had to cease exporting activities altogether.
The introduction of reciprocal measures by the UK in response to EU requirements further exacerbates the situation, potentially putting EU exporters off from engaging with the UK market due to increased bureaucracy and costs. While larger companies may absorb these new expenses, the ramifications, again, for smaller enterprises are profound, prompting concerns about the sustainability of their operations.
Delays at the border
The delays at the border caused by Brexit have been well documented over the past few years and in turn have helped cause numerous issues for all industries, however, the food industry has potentially suffered the most due to lack of warehousing facilities and a short shelf life making the process seemingly impossible. The medical sector has also been hit hard by delays at the border, with some suppliers in the UK being forced to stockpile medication and other emergency items.
The delays have also seen an increase in crime at the border. In fact, there were 5,373 reports of HGV and cargo crime in the UK in 2023, according to NaVCIS, with an estimated cost of the loss in value from the thefts alone of £68m – with the retail value much higher. As well as this, according to the Environmental Systems Research Institute (ESRI), the volume of products traded between the EU and the UK has decreased by one-fifth as a result of Brexit. Again, these delays have particularly impacted smaller businesses that make up the majority of the logistics industry and are already struggling with cost of living and business pressures. Delays at borders (alongside with COVID-19) were also cited by the The Road Haulage Association as the root causes of driver shortage.
Navigating post-Brexit impact with smart logistics solutions
In order to navigate the aftermath and constantly changing regulations of Brexit, shippers can adapt and leverage carrier networks and connectivity to manage their increasingly complex transportation networks effectively. This includes the likes of shipment tendering, visibility, and invoicing. Currently, the majority of transport companies offer shippers varying levels of visibility, for example, tracking and monitoring messages through existing technology infrastructure. And, with research published by Gartner stating that a quarter of all logistics KPIs will be powered by generative AI by the year 2028, for logistics providers to get ahead of the curve and thrive, they should be looking to utilise a Transportation Management Platform (TMP) that uses AI and machine learning to improve the accuracy and efficiency of complex logistics situations—like Brexit— to enable their businesses to focus on what people do best: service and strategy.
However, for smaller shipping businesses, the reliance on tracking drivers and monitoring shipment execution highlights the disparity in accessing comprehensive information compared to larger companies. This is primarily due to the cost-prohibitive nature of extensive hardware requirements. But, by implementing an effective TMP, shippers can unlock the potential to collaborate seamlessly with both smaller and larger transportation companies without sacrificing visibility. This approach fosters a more inclusive and efficient logistics ecosystem, benefiting all parties involved and reducing the effects of events like Brexit damaging their operations.
The necessity for a smart TMP has never been greater. For smaller exporters, such a platform could reduce delays significantly by streamlining documentation and compliance checks and with the additional chaos caused at the UK border following Brexit. For too long now, drivers have been trapped in endless queues armed with unfamiliar paper documents, whilst shippers have been grappling with the nightmare of damaged goods before their destination. A more digitalised approach could have facilitated the transition by alleviating the administrative burden on drivers, stopping language barriers, and providing real-time updates to shippers and carriers.
And Finally…
As we reflect on the key milestones of Brexit, from the initial referendum to the subsequent negotiations culminating in the UK’s departure from the EU, it’s evident that the impacts of Brexit on the logistics industry are profound and far-reaching. Some logistics companies have found new opportunities within the UK market, especially as they invest in technology to address the new challenges. The benefits of cost-effective and sustainable transportation planning, optimisation will be reaped if both shippers and carriers are focused and willing to adapt. The ability to support continuous planning across all transportation modes simultaneously will be fundamental to delivering cost and sustainability goals effectively across the entire transportation network for all orders.
