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How will Brexit affect the freight sector?

Category: General Freight 

As of the 24th of June the whole country was waking up to the news that the United Kingdom had voted to leave the European union, which caused uncertainty throughout different business sectors. For an island nation that relies heavily on sea, air and road freight, the exit from the solidarity of the European union is potentially prompting change across every sector of the freight industry. The most important thing which will be most significant and potentially damaging with that is that we will be excluded from the trade agreement which enabled us to have free movement across Europe.

The greatest concern for the freight sector is the protection of free movement across and throughout Europe. Without this, the transportation of goods across the continent will become increasingly costlier not only for businesses here but also abroad. Before Brexit, we have an EU legislation in place which provided the framework for market liberalisation across a number of many different sectors, which included aviation, rail and shipping. Air freight, for example, pre-Brexit airlines had the right to fly between EU countries and the right to fly within an EU country. Since we have now decided to leave the European union this causes concern, that without negotiating a new deal we will be left without these freedoms. Norway isn’t part of the European union, however, it is closely associated with the union, this is because Norway was able to agree a deal with the EU concerning the free trade rule. This enables Norway to have unlimited trade movements throughout Europe. In aspects to freight, there is a hope that Britain will be able to put a deal in place before we leave the EU, as for the UK to have the free trade rule we’ll have to confirm the deal before leaving the EU in approximately 2 years’ time. Without these deals, we are expected that airfares will rise along with the cost of air freight.

Not only this but from a regulatory point of view, there is a concern that the conditions of which may be placed on the UK due to our choice to leave the European union, such as what has happened with Albania and Serbia could also be applied to the UK. This could fundamentally affect and hinder the flow of freight across our borders and will make the process significantly more expensive for everyone involved.

The chief executive of the FTA (Freight transport association); David wells, has said that “We cannot allow new bureaucratic burdens to hamper the efficient movement of exports heading for customers and imported goods destined for British consumers” “Britain may be out of Europe but it Is not out of business, the FTA will be leading the campaign on behalf of exporters and importers to keep trade procedures simple and the cost of international transport down”
Whereas Bob Keen; the director of the British international freight association (BIFA) was quoted saying “We will be making sure that those undertaking the negotiations will recognise the fundamental role that our members’ freight forwarding services play in the underpinning the movement of the UK’s visible trade with Europe”

As for now, we are unsure of what the future holds for the freight industry and whether companies will be fundamentally moving their operations to countries like Holland or Germany. But for now, there are no major changes, just yet. Richard Currie stated this “The way that we do business to and from the UK. Isn’t going to change in the short term”.

Whilst there is an uncertainty of what’s going to happen in the future, we do know that the issue regarding the movement across the UK may be questioned (for the moment) we do know for certain that the two-year negotiation period means that any changes will be gradual and won’t be overnight.

Within the freight sector, we need to understand that we can at least feel a little safe in the knowledge that both the FTA & BIFA are working hard to ensure that new regulatory measures have the interests of the UK’s freight industry at the heart of the decisions.

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