The impact of Brexit on various industries has been widely discussed over the past couple of months. Challenges in the logistics industry are expected to increase manifold with Brexit. The outcomes of Brexit may have big consequences on even the top companies in the logistics industry. Britain, along with most of the other EU member states, has a service-based economy. This means that they rely heavily on the import of natural resources.
Furthermore, many EU countries are interlinked in their dependence on imports of fuel and petroleum products. For instance, over 25% of Britain’s petroleum products pass through the EU on the way to Britain. If Brexit negotiations result in Britain not being part of the Single Market, tariffs will be applied to goods entering the UK from other EU countries. Consequently, these goods will become more expensive. Rising export prices will not be good for the exporting countries, or for Britain, and those higher costs are likely to have a ripple-down effect and add on to the challenges in the logistics industry.
Productivity, process efficiency, and speed of delivery, and last-mile delivery costs are the crucial factors that influence the growth and profit margins in the logistics industry. Request a free proposal to know how to achieve this and mitigate challenges in the logistics industry coming your way.
Top challenges in logistics industry
Almost half of the UK’s exports are distributed to countries within the EU. Once Brexit is executed, this number will diminish and eventually leave a dent in the UK’s GDP. It will result in major challenges in logistics industry as a reduced amount of trade across mainland Europe will lead to a decline in demand for road haulage even if the rate of export remains constant.
Stricter border control
Experts at Infiniti believe that Brexit would bring about tighter border controls, creating barriers at borders for the administration of trade in both directions. This can cause lower efficiency and add on to the challenges in the logistics industry due to which goods will move slower.
Process efficiency and speed of delivery have always been crucial factors for logistics service providers. Get in touch with our experts to know how we help our clients excel in logistics operations.
One of the potential knock-on effects of Brexit could be stricter and stronger migration controls. This translates to lesser EU citizens working for UK -based companies. As a result, there could be a major impact on road haulage as it relies heavily on drivers belonging to other EU countries. This reduced ability to recruit drivers could increase challenges in logistics industry as the industry’s ability to serve the economy could be compromised.
Rising operating costs
Another way Brexit increases challenges in the logistics industry is through the rise in operating costs. Fuel prices are also a major area of concern for logistics companies. Experts at Infiniti Research agree that the biggest influences on fuel costs are the global oil price and the fuel duty imposed by the UK government.
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