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Logistics sector on Brexit: ‘would be catastrophic for the UK’s supply chain’

By Sasha Fedorenko January 17, 2019 - 9:33 pm

Last night Theresa May won a no confidence vote in the Commons by a 325-vote margin of 306-marking 24 hours after a large margin rejected her Brexit deal.

Speaking in Downing Street after the government won the no confidence vote, May has reminded the MPs that people “want us to address important issues they care about.”

She called on MPs to put in their joint efforts to prepare a plan that will deliver a smooth exit from the EU. As she said: “I’m inviting MP’s from all parties to come together, to find a way forward. One that delivers on the referendum and commands support of parliament. This is now the time to put self-interests aside.”

Meanwhile, Jeremy Corbyn opposes May’s Brexit plans. He said that the parliament should either carry out a general election or create a Labour-approved Brexit deal.

While the full debate on the future of Brexit to take on 29 January, which will discuss May’s new Brexit plan she set to publish on 21 January, experts in the logistics sector look at how merchants should prepare for the EU withdrawal in 71 days to come.

No Deal impact on the logistics sector

For Peter Ward, chief executive of the Association Mr May’s deal was “the only evident mechanism to provide the business community with a level of clarity.” With a high volume of uncertainty in place, says Ward, merchants should prepare for the worst, ‘no deal’ Brexit.

“As the leading trade association for the logistics sector, we are there to help businesses to prepare and ensure that the nation’s post-Brexit supply chains do not break down. Simultaneously, along with most business leaders, we urge MPs to put aside dogmatic and entrenched positions, abandon political jockeying, and put the future of our economy – and our country – first”

While the probability of no deal Brexit has risen, this scenario “would be catastrophic for the UK’s supply chain on which [merchants] reply,” says James Hookham, deputy chief executive officer at FTA.

“A No Deal would increase delays at the country’s borders, increase red tape and costs for logistics businesses already operating on narrow margins, restrict access for transport to the EU and reduce the available skilled workforce for logistics operators – all problematic on their own, but when viewed together, a perfect storm which could cause untold damage to businesses and individuals right across the country, not just those trading directly with the EU.”

Logistics solutions for Brexit

The Port of Dover, which manages 17% of the UK’s goods trade says that its “prepared” for Brexit with the help of a German supplier. Deutsche Post, a logistics supplier, announced that it had opened an office in Southampton with 450 custom experts to advice businesses in case of any issues at Dover.

Despite their preparation efforts, the supplier can’t make any further steps as its “relying on a decision by the UK.”

Meanwhile, the ifo Institute has called on the EU to offer Britain a solution modelled on Switzerland.

With the Swiss model, Britain would leave the political union, but would still be able to cooperate closely with the EU in as many policy areas as possible via a multitude of bilateral agreements. A central anchor point should be the UK’s continued membership of the European Customs Union, with the UK still having a say in trade policy decisions. We consider this to be a viable and face-saving path. This proposal has the added and obvious advantage that it also represents a solution for Turkey and other countries on the periphery of Europe..”
-Gabriel Felbermayr, director of the ifo Center for International Economics

While these expert insights still carry a sense of uncertainty, how are you preparing your logistics strategy for Brexit?

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