Some people may insist they work best under pressure or on deadline. That type of process may be great for an individual, but is counterproductive when billions of dollars of economic impact and the livelihoods of millions of people are at stake. The world is staring at December 31st in anticipation not just of turning the calendar on a COVID-riddled start to the decade, but wondering what Brexit will look like for people and companies worldwide. 

 

What We Currently Know About Logistics After Brexit

The European Union and the United Kingdom have a little over two weeks to determine the contours and details of their separation and how business will be conducted and citizens will travel between the soon-to-be different regions.

For global companies doing business with the European Union, there will be no changes to duty rates or customs clearance procedures. The UK has similarly declared that there are no increases in duty but will be some additional customs checks and controls. Johnson’s government has also been making the rounds, securing commitments from world economies like Mexico and others for a continuity of trade. US Trade Representative Lighthizer also told the BBC he is working to cement a bilateral agreement between the US and UK, but it remains to be seen whether that can be completed before the change of administrations. 

 

Brexit Impact on UK Importers and Exporters

The most insulated shipments are those for EU member countries that are shipped directly to the Schengen region and then moved to their final destination.

The concerns for UK importers and exporters – and the rest of the world – are the state of transportation connections, duty rates and the customs clearance process that will exist for cargo moving between the two economies. 

There are major gateway airports throughout the UK and the continent – London, Manchester, Paris, Brussels and Frankfurt to name just a few, where air cargo lands and to this point has been smoothly moved by truck between the UK and EU because of the single market and single customs clearance. 

What happens next for cargo that needs to travel from one location to the other for customs clearance and delivery? Companies have been fearing the worst of delays in moving sea and road cargo in transit. UK ports have been buried under the flood of imports that buyers want discharged in the UK directly and are being stockpiled in advance of January 1st. 

For our agent partners, the greatest worry is in the largest amount of traffic that keeps goods flowing – trucks. There will be additional reporting requirements for vehicles moving between Britain and Northern Ireland. UK Customs dismantled their checkpoints at Dover after joining the Single Market. With border checks now required for duty and admissibility, there are insufficient – really nonexistent – customs stations to examine cargo.

 

The Potential Impact of Brexit on the Supply Chain 

As negotiators work furiously to reach an accord – which the UK would be willing to call for a vote of Parliament on Christmas Day if needed – the two remaining sticking points for trade and commerce are fishing rights and the burdens on both economies selling into the single market. From the AJOT earlier this week:

The EU is concerned that Britain could cut back on labor or environmental standards to become a low-cost competitor to European firms. The U.K. wants to make sure it has the freedom to set its own rules as a sovereign nation, even if they diverge from the EU, because that was the point of Brexit.” 

For Mach 1’s customers, we continue to watch and listen intently to our UK and EU partners for their plans given the fluid and frenetic state of negotiations. While the world wishes the Brexit vote would’ve just gone the other way years ago, all we can do is wait for the deal to be hammered out and move forward accordingly. When we have guidance and clarity, we will deliver that information to our customers doing business in the UK and whose cargo transits the UK en route to the European Union.

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