David Wells, CEO Logistics UK for The Logistics Point
Despite recent indications that certain barriers to reaching a Brexit deal are being overcome, the logistics industry is still waiting to see the full picture. For Logistics UK, the body that represents a large part of the British logistics industry, and its CEO David Wells, nothing is done until the full deal is agreed.
The organisation has been pressing both the UK and the EU to reach an agreement before the end of 2020 and to give as much clarity to businesses on both sides of the English Channel as possible. Logistics UK has also published numerous analyses that show the negative impact of no deal to the industry and the larger economy.
Hungry for information
Wells disagrees with the statement that the logistics industry in the UK has wasted time and not prepared enough. According to him the sector has done what needs to be done based on the information provided by negotiators. Unfortunately, many points are still unclear and one of them is what will happen with trade between Northern Ireland and Great Britain. ‘Whether there is a deal or no deal, the work on preparing for new customs and safety declarations is not wasted,’ Wells continues. ‘The industry has come to grips with that and is quite hungry for information but there are key pieces of data that are still not available, which is hindering preparations.’
Wells says logistics businesses will have to make time to get ready for whatever happens after December 31st because the future success of their operations will depend on having the right documents. Logistics UK is concerned about a few things. One is the Driver’s Handbook, a step-by-step guide on what needs to be done by drivers to cross the border. According to the organisation, even the English draft version of the guide is confusing at times and this poses the question what translations would be like.
‘There is a complete lack of clarity on what documentations are needed and what processes there will be when moving goods between Northern Ireland and Great Britain,’ Wells continues. The organisation is particularly worried about the safety and security declaration. What could be the reason for these problems? One could be a lack of understanding of what actually will happen but another reason might be purely political.
Blow to the economy
‘The economic implications of no-deal have largely slipped by people’s attention,’ Wells believes. That is why Logistics UK has engaged in a campaign to clarify what it will mean for the economy. Wells is concerned that as a result of the introduction of tariffs, many sectors will suffer a huge blow to their already low margins. For logistics, where most businesses operate on an average margin of 2%, even a minimal increase in costs can become problematic. All industries will be affected by it and demand in retail, automotive and other sectors could decrease dramatically. This in turn could lead to less need for logistics services.
Wells also casts doubt on how much the UK government is preparing for no-deal. ‘We as an organisation have taken a neutral line on Brexit but as far as a free trade agreement is concerned, we want one,’ Wells points out. ‘We are urging the government to push for a deal.’
The government aims to give companies time to implement whatever is agreed but this arrangement will depend on the good will between the UK and the EU. Logistics UK is worried that just good will will not be enough to allow a sustainable transition with very little time left for implementation of new trading regulations.
For the latest advice and information on Brexit, please visit Logistics UK’s Brexit information hub here: https://logistics.org.uk/fta-brexit-advice