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International Forwarding Association Blog » News » Impact of Brexit on Logistics Companies and Suppliers

Impact of Brexit on Logistics Companies and Suppliers

Brexit date approaches and UK-based businesses are increasingly anxious about their prospects, many having lost faith in the economy. Retailers and suppliers are now stocking on supplies to ensure that they are not falling low on essential goods due to delays and supply chain problems. Many fear that shipping delays at the EU-UK border may result in cash losses for both exporters and importers.


Impact of Brexit on the Logistics Sector

For many freight forwarders, it is clear that Brexit will have a negative impact on the continuity of trade, affecting both the UK and EU. It is clear that there would be customs, administrative, and economic changes, with additional charges and duties being imposed on shipments.

This will inevitably result in price increases, especially in light of the fact that the importers’ ability to purchase goods has declined due to currency devaluation. Tighter customs requirements are also likely to be imposed, along with strict controls on land transport.

This is mainly due to rising concerns about illegal immigration and terrorist attacks. The tighter customs requirements and likely land transport delays will inevitably result in higher costs for European logistics companies due to reduced effectiveness. Some even predict worse-case scenarios with trucks queueing for long hours in the English Channel.


Brexit and Suppliers

Suppliers in the UK are increasingly stockpiling on medications and other emergency items. Diabetes UK is a point in question, as 3 insulin suppliers already assured the charity that they will be holding insulin on stock to ensure continuous supply of at least 4 months.

This is hardly a possibility for businesses in other sectors, especially those operating in the field of fast-moving consumer goods. Such goods are, for example, toiletries, candies, packaged and household items, and vegetables and fruits that have a relatively short shelf life. Suppliers of fast-moving consumer goods need reliable, timely, and continuous supply. This is not only because of short shelf life but also because of the lack of warehousing facilities to keep considerable quantities.

More storage facilities are required to keep goods as to ensure continuous supply in case of supply chain disruptions. According to experts, however, Britain is slightly over 60 percent self-sufficient.

For logistics services providers, shipping huge quantities of goods over a short period of time means that they have to push their supply chains to the limit. This is also a risky move in light of the fact that Brexit is still not a fact, and the agreements between the EU and UK have not been concluded.

One solution for logistics companies is to implement innovative technologies and processes to prevent supply chain disruptions and improve efficiency. Flexibility is certainly the key to improved efficiency, and IFA members are well aware of this. Experts also suggest that logistics companies look at how companies outside the EU operate to ensure continuous supply. In addition, innovative technologies should be implemented, for example, cloud-based electronic data interchange to benefit from regular updates on customs paperwork, routes, and other details.