Brexit - How will it Impact the Driving and Logistics Sector?

 

We have already begun to see the effects of a looming Brexit over not only the economy, but also many industries throughout the UK. This has driven businesses to evaluate their current positions and strategise a plan of action going forward.

One industry that has recently joined the wagon of looking towards the future is Driving and Logistics. We review some of the key talking points derived from the Road Transport Debate and how Brexit is likely to impact Driving and Manufacturing.

An Overview of Trade and Finances

As it stands, 50 percent of the UK’s car production exports go to the EU, making the continent Britain’s second largest export base. For this reason, Nigel Base, who spoke on behalf of the Society of Motor Manufacturers and Traders (SMMT), said that their organisation will lobby to ensure that Britain maintains a strong and mutually beneficial trade relationship with Europe. He recognised that some things will need to change during the negotiation, but maintained that the UK automotive industry is in good shape, and Brexit could lead to a decline.

Referring to economic forecast reports, Rob Riddleston, Barclay’s Corporate Head of Logistics predicted that GDP for the UK was likely to go down, while inflation would likely elevate. Although consumer confidence had diminished, stock market investment was reported at an all-time high. He also noted that 7 of the UK’s top 10 trading partners are in the EU, while 1 is in Switzerland. Given the figures, it will be vital for Britain to develop new trading relationships with the EU and other countries, particularly if the UK wishes to continue benefiting from the 50 free trade agreements that the EU currently has in place.

Border Controls - The knock-on effect on Employment

There is currently a driver skill shortage in the UK, with European migrants taking up 21 percent of the FLT drivers’ workforce, and 23 percent of the Warehouse Operatives workforce. Migration controls that restrict the influx of European workers could lead to an even bigger gap in the labour market.

Jack Semple, the Road Haulage Association’s Director of policy, observed that this could have a negative impact on the road haulage industry, which relies heavily on drivers from EU member states. He said that with less opportunity to recruit such drivers, the industry’s ability to serve the economy could be compromised. On a positive note, he was quick to identify a solution, in the form of increased investment towards recruiting and training UK drivers through schemes such as the Trailblazer Apprenticeship Programme.

However, the benefits of such programs would most likely only be seen in the long term, as it takes more time and money to train entry level British workers as opposed to recruiting fully qualified workers who enter the UK to begin employment straightaway.

The potential costs resulting from Brexit

If Britain were to exit the Single Trade agreement completely, the results could be elevated operating costs for logistics companies through a potential increase in trade tariffs imposed by the EU.

“Access is the term used to describe the ease with which British businesses will be able to continue selling goods and services to customers in the rest of the EU after the UK has finally left the club,” says James Hookham, Deputy Chief Executive of the Freight Transport Association.

“This is a really big deal! In fact, it is many thousands of really big deals for the businesses involved. Britain’s import and export trade with the rest of the EU last year totalled £357.8 billion so changing the terms of access to the single market matters for many FTA members.”

The price of fuel was also a key area that called for some concern. The AA has suggested that a weakened pound as a result of Brexit could increase the cost of fuel in real terms. On the flip side however, many experts agreed that the biggest influences on fuel costs are the global oil price, and the fuel duty imposed by the UK government, maintaining that neither of these will be directly affected by a vote to leave the EU.

Looking to work in driving and logistics?

Our Driving and Logistics Recruitment Team is always looking to place candidates from a junior to senior level! Whether you’re a Production Manager, Transport Supervisor, Warehouse Manager or a Driver Trainer, our expert consultants will assist you with specialised guidance in securing your next role! To find out more about our vacancies, contact our Logistics Recruitment Specialist, John Wilson, at [email protected].

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