Brexit vote: Industry reaction

Brexit vote: Industry reaction

The freight and logistics industry has been reacting to the historic vote in the House of Commons last night where MPs chose to overwhemingly reject Theresa May's Brexit deal.

The Freight Transport Association is urging politicians to reach a decision which supports the nation’s businesses "or risk putting the UK’s trading platform and economy in jeopardy".

“A No Deal Brexit would be highly damaging for trade, for business and for Britain,” said FTA Deputy CEO James Hookham. 

“With no clear solution for what happens next, the risk of a No Deal has risen significantly – and the problems which this would cause of businesses, which now have virtually no time to prepare, would be catastrophic for the UK’s supply chain, on which we all rely. 

“Mrs May’s Lancaster House speech, two years ago to the day, promised that frictionless trade would be protected, whatever the outcome of negotiations with the EU: this promise has not materialised.

"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.”

Hookham continued: “As a sector, logistics has been asking government for clarification on key trading areas for the past two years without success. Issues such as how customs declarations are to be made and tariffs collected, the access rights for trailers and UK personnel, and how access is to be granted for vehicles may seem incidental to some, but actually have a huge impact on the way that goods and services are able to flow freely between the UK and its biggest trading partner.

"Logistics must not and will not be held up as the 'whipping boy' for politicians who have failed to take into account the complexity of the supply chain over the past two years. Operators of all sizes are always prepared to go the extra mile to deliver for customers, but without knowing the parameters of the market in which they are and will be working, planning has been almost impossible.

“A no-deal Brexit would leave logistics operators facing increased red tape, restrictions to access and to skilled staff, increased delays and rising costs and puts the livelihoods of the hardworking Britons involved in the movement of freight at risk. No one voted for that, and FTA is urging the government once again to reach an agreement with the EU which can keep goods and services flowing with minimal or no hindrance – that is what was promised two years ago, and that is what the industry expects.”

On behalf of UK haulage operators, the Road Haulage Association said the Government and Parliament need to quickly gain a consensus on a Brexit withdrawal agreement that will “keep the UK supply chain moving”.

RHA’s Chief Executive, Richard Burnett, added: “It is imperative that any withdrawal deal includes a transition period to establish new and efficient border technology, and systems across industry needed to be put in place to avoid disastrous queues at ports and also a hard border between Northern Ireland and the Irish Republic.

“In addition, a deal would avoid reliance on an acute shortage of permits and measures for customs that are unworkable and impractical.”

Richard Ballantyne, Chief Executive of the British Ports Association said: “The ports industry notes developments in Parliament... and some in our sector will have real concern about the increasing possibility of a ‘no deal’ Brexit outcome. We would urge the Government to clarify its alternative plans immediately and do whatever is necessary to avoid a disorderly withdrawal from the EU.

“We have now been discussing the implications of a ‘no deal’ Brexit with Ministers and officials for more than two years and we know they fully appreciate the disruption that this would entail at certain key port gateways. Whilst plans are in place to mitigate some of the worst aspects of this, the fundamental dangers to free flowing trade remain and must be avoided if at all possible.

"Ports also have a vested interest in a stable and healthy economy. We are obviously now very close to exit day and many in the ports sector will be seeking guarantees that time will found for further negotiation to avoid the UK leaving the EU on unfavourable terms.

Eurotunnel called on political leaders to “clarify the nature of the border relationship and controls that will exist between the United Kingdom and the European Union, as soon as possible”. 

Its statement continued: “Only the establishment of clear rules will allow businesses to continue to invest, to create jobs and to preserve the vital human, social and cultural exchanges that benefit both the UK and the EU. 26% of trade between the UK and the EU passes through the Channel Tunnel, supporting hundreds of thousands of jobs.

“Over the past two years, Eurotunnel, which celebrates its 25th anniversary this year, has been preparing for all outcomes, with the full support of its 2,500 employees.

“We have adapted our infrastructure so that, with or without a deal, traffic flow through the Tunnel will be maintained.

Eurotunnel said it is currently working to ensure that new post-Brexit border controls will have no significant impact on Tunnel traffic. 

“As our history shows, when the Tunnel was opened in 1994, lorries passed through only three types of check, compared to eight separate controls today. This increase in the level of controls over time has not prevented truck traffic from increasing fourfold over the same period between 1994 and 2018.”

Representatives of freight forwarders meanwhile, are ready to “clear up the mess left by politicians”. 

Robert Keen, Director General of the British International Freight Association (BIFA), said: “The decision taken by Parliament is historic and needs to be acknowledged. 

“With just a couple of months to go before the exit date, the rejection of the deal leads BIFA to recommend that our members, which are the companies that handle the processing of most of the UK’s visible trade, to prepare on the basis that there will be a hard Brexit.

“Speculating about any other outcome is inadvisable until UK Government provides us with clear guidelines.

“A hard deal may well be very disruptive and damaging for the UK economy as a whole, but freight forwarders – many of whom are Authorised Economic Operator (AEO) accredited – will play a key role in tidying up the mess left by the politicians by ensuring UK importers and exporters can continue trading without undue disruption with the rest of Europe after March 29.

“BIFA has always stated its belief that a disorderly Brexit would be the worse outcome, as it is likely to increase trade barriers and impose significant restrictions on the exchange of goods between the EU and the UK. 

“Whilst BIFA’s executive management has engaged with various government departments over the last two years in regards to issues that affect the movement of visible trade post March 29th, our members have also been discussing the possible impacts with their clients.

 “Large and small, BIFA members have taken actions to review all options to overcome the disorder that a no-deal Brexit could bring to international trade in order to define sustainable solutions as the set of Brexit conditions becomes clearer.

“BIFA will be renewing our appeals to the responsible bodies in London and Brussels to do the utmost to prevent this scenario. As far as we are concerned, our members are focussed on ensuring the ongoing efficient flow of freight for our customers.

“One thing is certain, our members are ready, willing and able, to clear up the mess that has been left by politicians.”

John Perry, Managing Director at SCALA, which provides management services for the supply chain and logistics sector, commented:

“Until recently, a no-deal Brexit was seen as such a remote possibility that many businesses are only just starting to put contingency plans in place. However, whether a deal is agreed or not, there is a strong possibility that Brexit will cause months of severe disruption to UK/EU cross-border movements that businesses should be preparing themselves for. 

“In the last few days we’ve heard mounting reports of companies that have begun stockpiling goods and raw materials, including Tesco and Marks & Spencer, in an effort to minimise the impact of this possible disruption. While this will certainly buy them some time, it is only a short-term solution. 

“In addition to stockpiling, businesses should be urgently reviewing their supply chains to identify any major risk areas and implement risk-reduction strategies. Affected organisations should also consider applying to become an Authorised Economic Operator, as it’s widely agreed that achieving AEO status is likely to be one of the most effective mitigating factors in any Brexit situation. 

“If, however, Article 50 is revoked, as many are hoping it will be, this will still have been an extremely valuable exercise. After so many years of frictionless trade, it’s clear that many of us have been delaying on these big decisions. If nothing else, the past two years have proven how precarious our situation really is. Brexit should therefore act as the catalyst businesses need to re-optimise their supply chains, ensuring they are as agile as possible and prepared for any future unforeseen events.”