Logistics businesses face £240 million No Deal bill, says Logistics UK

Friday 30 October 2020

Logistics UK, the business group representing the sector responsible for moving all goods and services for the UK’s economy, has warned that a No Deal Brexit would add more than £240 million to the industry’s annual bills, thanks to the imposition of WTO tariffs on new vehicles, parts and equipment.  And, as David Wells, Logistics UK’s Chief Executive explains, this is a massive bill which cannot be borne by the sector:

“More than 70% of HGVs are manufactured in the EU, and new vehicles will incur a 10% tariff if the UK leaves the EU without a deal at the end of December.  That is an estimated £7,000 or more per vehicle, and with around 48,500 trucks bought by UK businesses every year, that’s a total tariff of £240 million which has to be found from somewhere. 

“Add on the 4% tariff on tyres for vehicles and around the same level for spare parts from the EU, and that equates to a massive tax on logistics companies already reeling from the impact of the COVID-19 economic downturn.  This could be the  final straw for many businesses in our sector – as the industry that drives the heart of the UK economy while operating on 2% margins, we simply cannot afford these sorts of sums and they will inevitably be passed on to the consumer in higher prices.

“This is just the tip of the iceberg, with a raft of new tariffs applying indirectly to logistics and other sectors involved in the supply chain, and to the direct costs of thousands of goods from new cars to fresh foods unless the UK agrees a free trade deal with the EU. Prices of many everyday items that we buy from the EU will rise as a result, and that inflationary pressure would crush any hope of swift economic growth at a time when we need UK PLC to be standing strong.  Government needs to agree a deal with the EU so that our sector, and the economy at large, can start to build back better with confidence.”

Logistics UK (formerly FTA) is one of the UK’s leading business groups, representing logistics businesses which are vital to keeping the UK trading, and more than seven million people directly employed in the making, selling and moving of goods. With COVID-19, Brexit, new technology and other disruptive forces driving change in the way goods move across borders and through the supply chain, logistics has never been more important to UK plc. Logistics UK supports, shapes and stands up for safe and efficient logistics, and is the only business group which represents the whole industry, with members from the road, rail, sea and air industries, as well as the buyers of freight services such as retailers and manufacturers whose businesses depend on the efficient movement of goods.