Logistics companies urgently need clear planning advice as continuing delays over a UK-EU Brexit deal hits British trade prospects, according to the logistics industry and business leaders.
The Freight Transport Association (FTA), which represents the entire UK logistics sector, has reacted with frustration to the lack of progress in Brexit negotiations this week, while a survey by the British Chambers of Commerce (with DHL Express) revealed that companies are delaying decisions amid ongoing uncertainty.
The FTA declared yesterday that companies responsible for moving the UK’s goods and services between the UK and Europe “need urgent answers to keep Britain trading” and clear directions on preparations.
Pauline Bastidon, FTA’s Head of European Policy, commented: “With March 2019 fast approaching, it’s frustrating negotiators on both sides have still not reached an agreement and seem content to once again kick the can down the road. We are now being told that decisions could be postponed to the December EU summit.
“While the logistics industry understands negotiations are complex, politically-sensitive and time-consuming, there are massive decisions which need to be made urgently by companies and cannot be left to the last minute. Given the scale of adaptions required in the event of a No Deal exit, an outcome which cannot be excluded at this stage, we are quickly reaching the point of no return and industry decisions cannot be delayed any longer.”
She underlined: “Months ago, FTA listed a number of key elements on which we needed answers to and clear decisions on as part of our ‘Keep Britain Trading’ agenda. With less than six months left until Brexit, we are forced to recognise that progress on these items is extremely limited. Even the transition period is not a certainty at this stage. The current state of uncertainty leaves the logistics sector in limbo, as our members are forced to plan for an uncertain future. They face two choices: invest in and implement contingency plans that might not be needed if an agreement is reached, or take no action and risk being unprepared in the event of a No Deal exit.
“FTA advises all companies to begin preparing for the worst-case scenario and calls upon the Government to give clear directions to industry, building on the no deal notices and focusing on the points of greater concerns to the industry, from detailed information required to prepare for possible customs formalities to post-Brexit immigration rules. Contradictory signals are unhelpful and risk giving industry a false sense of security.”
Bastidon continued: “Given the increased likelihood of No Deal, FTA urges the European Commission and UK Government to better coordinate Brexit preparedness efforts. We’re seeing too many uncoordinated actions by member states in isolation – plans based on assumptions rather than proper dialogue or a clear strategy. Authorities need to be allowed to exchange information on the expected location of controls, traffic management and other measures taken to mitigate the impact of border delays in order to minimise disruptions on the flow of goods.
“The European Commission should take the lead in identifying areas where coordinated ‘emergency’ agreements will be a must if the two sides fail to reach a deal. This is especially salient in transport – the logistics industry needs the legal certainty that trucks, planes and trains will be able to circulate without market access restrictions after Brexit, even in the event of a No Deal exit. Unilateral measures – such as those being contemplated in France – are not good enough and fail to reassure our members. Simply saying that alternative forms of transport should be used stems from a fundamental lack of understanding of supply chains and production constraints and does not reflect the fact that massive shifts require huge investment in extra ferry capacity, space and new infrastructure at ports, which are all measures requiring ample time.
In conclusion, Bastidon said: “The UK’s logistics sector is the beating heart of the economy, and one on which most businesses – including manufacturing plants, hospitals and shops – have come to rely. The industry is ready to take action, but it needs clear directions and a supportive environment; above all, it needs time and freedom to adapt to the final outcome.”
Meanwhile, a survey by British Chambers of Commerce, in partnership with DHL Express UK, yesterday revealed that almost half – 49% – of businesses have uncertainty over Brexit front of mind when deciding whether to trade internationally, highlighting the economic cost of the persistent lack of political clarity. A similar number (48%) of firms are concerned by the related issue of exchange rate volatility, which can increase the cost of raw materials and potentially make UK exports less competitive.
Dr Adam Marshall, BCC Director General, said: “Firms have been dealing with uncertainty over the future relationship with the EU since the referendum vote over two years ago. However, this survey shows that as we get closer to the crunch, the lack of precision is starting to have a material impact on their decision-making.”
Shannon Diett, VP of Marketing, DHL Express UK, added: “The uncertainty expressed by British businesses taking part in this survey mirrors the increasing concern we are hearing from our customers, both of which further highlight the criticality now surrounding the Brexit negotiations. It is imperative that decisions are made to allow businesses to plan for a successful Brexit and to facilitate continued smooth international trade with Europe.
“At DHL Express we are preparing for every scenario and as part of this we are reviewing resources, infrastructure, systems and people. We are joining forces across the DHL divisions to do everything within our power to ensure our customers can continue to operate and trade internationally in the smoothest way possible.”
