Ever since the UK announced its decision to leave the European Union, talks about Brexit and its possible ramification on industries in the country has taken the center stage. As logistics is a crucial area in trade ties, there have been debates about the future of the logistics industry once the UK leaves EU. Though it is still too early to predict, here are some possible impact of Brexit on this industry.

Reduced trade will impact profits

According to the government, EU accounts for 44 % of the UK’s exports. Once the UK leaves EU, there might a possible decrease in that figure which means a dent in the country’s GDP. For logistics companies, reduced trade would mean reduced demand for road haulage and shipments resulting in diminishing profits.

Border controls will restrict freedom of movement

Many experts from the logistics industry are of the view that once the UK leaves EU, there would be stricter border controls. This means that goods will move slower, and this will decrease the efficiency of logistics companies.

Legal changes will impact the industry

Though it is difficult to foresee the legal implications of Brexit, it is safe to assume that there will be some legal changes especially in relation to employment laws governing EU workers. The logistics industry has to be prepared for it.

Lack of drivers

Many EU citizens work in the UK’s logistics industry, mostly as drivers. With Brexit, it is expected that immigration laws would be tougher, and it will be difficult for them to find employment in the country. This means that the logistics industry has to suffer from a shortage of drivers which will impact its business.

Increased cost of doing business

It is expected that with Brexit, the operating costs of logistics companies would increase. There would be new trade tariffs that might be higher than at present which will impact the margins of the logistics companies. Moreover, experts fear that the pound would weaken when the UK leaves EU, which will raise fuel prices and will affect the business of these companies.

Brexit may affect the logistics industry, but its future is not bleak. Several mitigative measures in the due course of time that would help these companies sail through the difficulties.

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