How will Brexit impact the European logistics industry?

As political heavyweights made their way to Brussels for the second round of Brexit talks, British Brexit Secretary David Davis urged all sides to ‘get down to business’. The European logistics and supply chain industry will be hoping more than most that they do just that.

In June 2016, British voters chose to leave the EU, sparking huge debate across Europe on how that exit could be achieved, and what the likely impacts would be for people and economies across the Union. Of course, within each member state, opinions are divided about whether or not Britain’s decision to leave is a wise move or a disaster, but one thing is certain: the impact of Brexit on Europe’s logistics industry will be huge.

Importing goods into Britain from the EU

Britain, along with the majority of EU member states, has a service-based economy, which means that is has to rely heavily on the import of natural resources. Many EU countries are interlinked in their dependence on imports of fuel and petroleum products, with 27% of Britain’s petroleum products, for example, passing through the EU on the way to Britain. Ultimately, it will be consumers across Europe who feel this impact most acutely, as hauliers and logistics firms will simply pass on the increased costs to their customers.

Customs and border controls

Under the Schengen agreement, residents of EU member states enjoy extremely relaxed border controls, and are generally free to cross borders without being stopped. The Single Market also means that goods and services can be freely traded throughout the eurozone. Inevitably, when Britain leaves the EU, this will have to change, and stricter border controls will be reinstated between Britain and its EU neighbours.

Nowhere is this likely to be more pronounced than on the border between Northern Ireland and the Republic of Ireland, which, of course, remains an EU member state. Trade between Northern Ireland and the Republic is strong, and it’s thought that border controls could cost businesses billions each year, with a knock-on effect felt throughout the logistics industry.

Source: SupplyChain Digital