Brexit and logistics FAQs
What happens next after the Brexit vote?
Nothing changes for freight transport operations until exit negotiations have been completed. The Government gave official notice to leave the EU (a notification under Article 50 of the EU Treaty), on the 29 March 2017. View our flowchart explaining the Article 50 process here (members only).
These negotiations will be incredibly complex and Logistics UK’s job will be to lead for logistics and make sure the Government keeps the UK’s supply chains efficient and competitive, whatever deal is agreed.
What’s the value of the UK’s trade with Europe?
The EU is a major trading partner for the UK; the value of our trade with the Union stands at nearly £360 million.
47 per cent of the goods we exported in 2015 went to the EU, whilst 54 per cent of the goods we imported came from the EU
over the last 10 years, exports of goods to the EU from the UK rose 9.2 per cent, from £123 billion in 2005 to £134.4 billion in 2015
What are the options for Britain’s future trading relationship with Europe?
What will the new trade deal look like? This is at the heart of what the Prime Minister will need to negotiate with the EU. These are some of the current models that apply to other countries
Norway (Link to European Commission - Norway) – within the European Economic Area (EEA) with almost full access to the Single Market (and accepting free movement of people). It enacts all EU laws as a condition of its access to the Single Market, and contributes to the EU budget.
Switzerland (European Commission - Switzerland) – bi-lateral deals with the EU. Switzerland implements many EU rules and contributes to EU funding programmes.
Turkey – (European Commission - Turkey) outside the EEA but in a Customs Union with the EU since 1995. Turkey implements the EU industrial standards.
Canada – (European Comission - Canada) a bi-lateral trade deal is being negotiated with the EU (CETA - EU-Canada Comprehensive Economic and Trade Agreement).
Russia – (European Comission - Russia) a new EU-Russia agreement is in preparation, building on WTO (World Trade Organization) rules.
What will happen to the juxtaposed border controls at Calais?
Juxtaposed controls enable customs and immigration procedures to be carried out in France for in-bound freight movements and in Kent for out-bound movements. Will these remain juxtaposed in Calais, where security for truck drivers can be maximised, or will they be repatriated to Kent and migrants able to leave France unimpeded? There were calls from the Calais authorities, immediately after the result was declared, for these special arrangements to end. This is something that would cause huge disruption to cross-Channel movements as services would be limited by the capacity of the UK Border Agency to process vehicles disembarking in Kent. The calls for a change in the juxtaposed controls seem to have been dismissed by French President Hollande but he faces a Presidential Election in spring 2017. See the Government press release 'PM holds talks with President Hollande: 1 July 2016'
What will be the tariffs, the guarantees and the clearance procedures exporters and importers will need to follow?
These will decide how well the new trade works in practice for supply chain managers and shippers. The degree of access to the Single Market will, to a large extent, determine the customs tariffs, procedures and administration that will apply to imports/exports at the EU border.
What will happen to domestic transport legislation?
Depending on the deal reached with the EU, the Government may decide to unpick the enormous body of UK transport legislation that is based on EU directives and regulations. In such circumstances, what would be kept and what would be scrapped? For example, will international hauliers have to learn two set of rules, one for when their trucks are in the UK and another for when they are in the EU?
What about enforcement for UK vehicles going into Europe?
Documentation required to accompany goods, vehicles and drivers will need to be unambiguous and universally accepted to avoid arbitrary enforcement and penalties being imposed. The UK industry will need to remain vigilant against unilateral decisions adding red tape to cross-border movements. Current experience suggests that international hauliers are indeed vulnerable to unilateral action by enforcement authorities in EU member states, for example the evidence of payment of the minimum wage required in France and action over the registration of trailers in Germany. The enforcement of whatever new rules are agreed has the potential to become a major cause of delay and burden for international movements. This means that getting clarity on what documentation for goods, certificates for trucks and licences for drivers are required is a crucial element in making any new trade arrangement work in practice.
Might there be pressure for an increase in fuel duty?
The previous Chancellor, George Osborne, hinted at tax increases in the Autumn Statement to balance the national books following the Brexit decision, but an Emergency Budget was ruled out by the new Chancellor, Philip Hammond. Fuel duty increases have been in the Treasury’s sights before but Logistics UK-sponsored research shows that reducing fuel duty would give a real stimulus to the economy and would give logistics a competitive edge in a tough new trading environment – we will continue to make the case for a 3 pence per litre cut in fuel duty.
What might the implications be for global imports and exports?
Trade is an exclusive competence of the EU, meaning that trade deals are negotiated at EU level on behalf of EU member states, rather than at national level. The UK will therefore need to negotiate new trade deals with the rest of the world to ensure that it can keep trading under favourable conditions.
Post-Brexit, it will be more important than ever for the UK to trade more with the rest of the world but changes in the container shipping market mean that the biggest and most efficient container ships are calling less frequently at UK ports, meaning goods having to be trans-shipped from mainland Europe. Logistics UK will be making the case for more investment in our ports and the road and rail links that connect them to increase their ability to handle bigger ships and larger volumes of containers.
Does this change the case for an increase in airport capacity at Heathrow?
Following the Brexit vote in the EU Referendum, the UK needs a world-class global air freight hub to connect businesses with their customers and suppliers in global markets. Logistics UK urged the Government to confront the decision on airport capacity in the harsh reality of Brexit and keep Britain connected with the rest of the world by expanding Heathrow as the country’s global air cargo hub airport and has welcomed the expansion decision.
What does Brexit mean for logistics on the island of Ireland?
There are unique logistics issues affecting trade with the only EU country that shares a land border with the UK. The importance of trade across the border between Northern Ireland and the Republic must not be forgotten in negotiations for the UK’s exit from the EU. In addition, Irish traffic to and from mainland Europe will need special arrangements to avoid the burdens of goods and vehicles exiting and re-entering the EU as they transit through the UK.
