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Brexit: What are the Potential Ramifications for Logistics Companies?

Brexit and its impact on logistics companies

 

With issues like terrorism and immigration taking centre stage in the Brexit debate up till now, businesses in Europe, Britain, and around the world are waking up to the fact that the referendum, if it leads to a formalised exit from the EU, will mean making some big changes in the international logistics sphere.

Logistics companies, and any British businesses that make regular use of international logistics in their operations, are on high alert now that the possibility of Britain exiting the European Union has been brought one step closer to reality. Of course, many have all kinds of arguments about why Brexit will actually prove to be a blessing for all British businesses in the long run – but most agree that trying to predict the economic effects of such a move is a useless practice.

We’ll just have to wait it out and see. One thing is certain, though – in a political shift with such a heavy focus on borders (even though social and humanitarian issues dominate the headlines), international logistics companies operating in the region and around the world can only expect logistics involving Britain to become even more complicated, and potentially more expensive.

Forbes believes that the Brexit could cost the typical small-to-medium international shipper in Britain up to £163,000 due to added costs, taxes, red tape, duties and delays – potentially adding 30% to the price of an average import into Britain. Others believe that in the long run, Brexit will allow for a more Britain-centric set of regulations to be set into place that will benefit British businesses and lessen regulation. However, it goes for the British, it seems inevitable that international logistics companies and their clients will need to adjust their budgets for dealing with Britain in the future.

Brexit will most likely lead to a rise in demand for specialised logistics companies and international logistics consultants, who would be able to manage complicated and unfamiliar customs procedures as British businesses get to grips with life outside the convenient, EU-negotiated trade deals they’ve become so accustomed to.

Britain also stands to lose out on valuable deals that were already in the works, including free-trade talks with the USA, China and India, which would affect importers and exporters across the board if Britain is excluded. The challenge of negotiating their own trade deals upon leaving the EU will be a huge one for Britain, and until such time as the Brexit is finalised and set into motion, logistics companies and their clients can only wait and see.

How does Brexit influence Logistics Companies South Africa?

South Africa has a trade agreement with the European Union allowing for duty free access of many products into Europe from South Africa and vice versa, provided these products comply with rules of origin.

This EU trade agreement will fall away for Britain and therefore equally affect our trade with the UK. The UK is among SA’s largest trade partners and it will be likely that new trade agreements have to be made between the UK and South Africa.

 

Image credit: http://themillenniumreport.com/