How Will Brexit Impact Shipping?

Britain’s referendum decision to leave the European Union has had a colossal impact on the world. From fluctuating currencies to mounting uncertainty, this outcome has affected a lot of people in many different ways particularly those that engage in international shipping.

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There are many pros and cons to leaving the European Union; however, the looming Brexit deadline and governments leaving it right down to the wire to negotiate a trade deal was a source of stress for many businesses.

Brexit has left many businesses wondering how exactly it will impact on their business and now that the deadlines have passed, we understand that some are still none the wiser. To help you keep on top of Brexit and the impact on business, there are some factors that business owners should be aware of.


Will Vessels Still Sail to British Ports?

During the early stages of the lockdown restrictions in March 2020, 85% of respondents to Logistics UK’s COVID-19 survey reported business downturn with work and orders beings cancelled. As supply chains eased in disruption this figure decreased to 60% by the end of May. The report also explained that delivery times had significantly improved due to less congestion on the roads.

The UK government have warned of a 6-month disruption period, with the first 3 months being the worst. This is down to the additional checks and expectation that all shipments will be carrying the correct licenses and customs paperwork. To try and alleviate the disruption, HMRC announced there would be a 6-month grace period where the new procedures would be simplified. Despite this, the disruption period has had a knock-on effect on the logistics industry. In an attempt to work-around the expected delays to their shipments, businesses have taken to stock piling items so they can avoid making any orders. For UK logistics companies, this also means their efficacy will be compromised with concerns from clients about goods not making it to their destination in time or potentially being seized if the correct customs regulations are not adhered to.

Due to these issues, many vessels are choosing to completely bypass the UK altogether so as not to affect the rest of their items.

Will There Be A Reduction in Trade?

Due to the uncertainty surrounding Brexit plus the disruption at the borders, it is widely believed that there will be a decrease in volume of shipments going in and out of the UK. This is thought to extend into much of this year or until the United Kingdom establishes itself within the global market.

A contributing factor to this decrease in trade volume will be the uncertainty surrounding Britain’s trade agreements. Now that they are not a member of the European Union, the UK must now make new alliances and forge its own trade agreements.

Border disruption and new customs regulations will undoubtedly impact on the volume of trade between the UK and the EU. In 2019, 43% of the UK’s exports went to the EU which amounted to approximately £294 billion with the EU sending 53% of the UK’s imports. With the rise in tariffs and added stresses trying to get shipments across the border these numbers will inevitably decrease. As the EU makes up such a big percentage of the UK’s importing and exporting it’s hard not to picture this making a big dent in the country’s GDP.

Will Border Controls Have an Impact on Business?

Border controls and customs regulations have always been something that the logistics industry have had to contend with. Missing or incomplete paperwork can pose a threat to the delivery of a shipment.

There is a fear that Brexit is going to bring back arduous red tape that could make things very difficult for businesses who are wanting to send time sensitive items. We are seeing these issues currently happening at the UK border. Several companies are already lobbying the UK government to push the simplification of the shipping process.

Companies who continue to internationally ship their goods are being advised to ensure that they are completely aware of the regulations or are ensuring that they hire professionals that are familiar with the new processes..

Is your Freight Forwarder Ready?

Many companies will presume that freight forwarders will have the up-to-date knowledge to navigate the changes to UK trade processes and documentation successfully; however, there will be some that would not have operated in these circumstances before and will be as knowledgeable in the subject as their clients.

There are many freight forwarders that have only ever dealt with European countries and would never have had to deal with customs declarations. These firms will now be upskilling or employing extra staff to handle the new processes which will be subject to teething problems as all new processes do. This will cause potential delays, loss of revenue and damage to their reputation. The UK government have estimated that 50,000 new customs brokers are required to cope with the new Brexit transition.