Brexit: How will the break between the UK and the EU affect the logistics and transport sector?

Brexit: How will the break between the UK and the EU affect the logistics and transport sector?

brexit logistics and transport

Brexit is on everyone’s lips. European and non-European citizens, politicians, bankers, economists, lawyers, celebrities and many others are waiting for the next UK exit from the European Union. An exit that, a priori, was scheduled for last March 29, but whose term was extended by the EU until April 12 by the EU and, after the mentioned date, it was decided to grant a subsequent replacement until October.

In April, in addition, the British Parliament approved a new law that will prevent Brexit from occurring abruptly, that is, without prior agreement. So there is a whole mystery around this issue, which we assume will shed more light over the next few days.

Much is said, as we say, on this subject. But, really, to what extent could brexit affect commercially? Next, we tell you in detail.

Since, on June 23, 2016, the non-binding referendum that revealed the desire to leave the European Union of British citizens was held in the United Kingdom, numerous events have taken place that have marked the course of this highly relevant event Worldwide.

In fact, the effects of Brexit began to be noticed just a few months after the announcement of the result of the referendum. Because of this situation, entities such as the European Medicines Agency (AEM) and the European Banking Agency (ABE) move their headquarters to Amsterdam and Paris, respectively.

Likewise, thousands of private companies based in the British territory, such as Airbus, Sony, BMW or Nissan, are awaiting the final departure of the nations that make up the United Kingdom – England, Scotland, Wales and Northern Ireland – from the EU to make a decision regarding its location. While others, such as Honda, have moved ahead and have already fled as a result of the uncertainty that this situation has caused.

Brexit and trade: How could it affect the logistics and transport sector?

Brexit does not only harm European citizens who wish to move freely through the territory of the union, but, on a commercial level, a break without agreement between the EU and the United Kingdom could lead to different problems:

On the one hand, the establishment of trade barriers, which will involve additional procedures (import / export licenses), delays and, ultimately, greater difficulties in customs. In the case of the import / export of perishable products, such as fresh foods or flowers, special attention should be paid to waiting times. In addition, certain products-agri-foods, cosmetics, pharmaceuticals, etc.-may be prohibited.

On the other hand, the increase in costs. With the imposition of new tariffs and taxes on raw materials and products, the costs of the products imported from Europe by the United Kingdom will be increased and, therefore, the commercial relationship will be complicated. The same will happen in the other direction, the prices of products and raw materials from Europe will rise upon arrival in the United Kingdom, which will undermine the commercial relations between both territories.

brexit logistics and transport port

Thirdly, the United Kingdom will have to renew trade agreements with third countries which, until now, were in charge of managing the European Union. “This will undoubtedly affect those companies whose merchandise requires crossing the British border before leaving for other continents,” explains Tino Hyland, general manager of Hyland Shipping.

Fourth, Brexit could also impact the labeling and identification of products and raw materials arriving in the United Kingdom. Likewise, food quality and safety policies could be modified, which would mean that all products exported from Europe would have to be modified to comply with the new standards.

And the commercial relations between Ireland and Spain?

According to the Brexit Sensitivity Index (BSI) stipulated by the American rating agency Standard and Poor’s, Spain is the eighth country in Europe with the highest level of exposure to Brexit, ahead of other countries such as France or Italy. An extremely relevant fact, because it reflects the importance that our exports to the United Kingdom represent in our country.

“The commercial relations between Northern Ireland and Spain will be those stipulated by the United Kingdom. However, Ireland, as a country, will continue to belong to the European Union, so there will be no problems in this regard”, says Hyland.

At the moment there is little information available in this regard, so we must wait to see what happens in Ireland with respect to the other nations that make up the United Kingdom, with its new trade, tariff and import / export agreements, for Go back to this topic.

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