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Aeolus Perspectives 3rd Edition: Who is scared about Brexit? Deal or no-deal, it will surely impact on the whole European transportation


Red tourist bus through the city in black and white

Whether you are British or not, if you run business in UK, you can’t help but think of Brexit, asking what effects might be on your everyday own activities. And, of course, this also applies to those companies who deal with transportation and logistics and usually manage shipments to/from Great Britain. 

Regardless of what the exit deal agreement with the EU might be - or even eventually in a no-deal situation -, market already shows the very first signs of concern about the future. Worry about a possibly chaotic Brexit brings to exploding exports in the European Union to the United Kingdom. 

In the last months, fears that, at the end, UK may leave the EU without a deal have caused a blast in the number of goods ordered for delivery to the British Island. Compared to the previous year, truck transports from all parts of Europe towards Great Britain have more than doubled in the first quarter of 2019, with growth of even 112%: this according to the last Timocom transport barometer, which IT company uses every quarter to document the development of transport offers and requests on Europe’s largest freight and vehicle application. Timocom top management also refers that the companies in UK that depend on imports from the other European countries are starting to increase their stock, in order to be prepared in the event of a “hard” Brexit.

Generally, the analysts seem to agree on that a no-deal situation could mean, first of all, delivery lead times may lengthen. Even a lot. Vehicles wanting to enter in UK are expected to face extremely longer waiting times. And that could also cause more and more bottle-necks in the freight connections and supply chain too. As a consequence, the managing costs and then tariffs also may increase as much as maybe customers’ dissatisfaction. However, even in the best end – this could be if Brexit outcome will be a free trade agreement with the EU - unlikely we will have the same truly borderless international shipping situation we had before the exit. Actually, the customs fees on the goods are another really uncertain and worrying factor. Unless Britain and EU reach a deal for completely open borders, without customs or other checks on imports, and without the application of predefined and specific tariffs, the costs of freight transport are expected to grow.

Overall, the uncertainty is both for the British companies and citizens and the European ones too. In the meanwhile the EU organs are working hard on finding out and creating the conditions to limit the foreseen most serious damages that would be caused by a disorderly Brexit in specific sectors -including transportation -, where failure to reach an agreement may have very heavy consequences for citizens and business.

On the last March 19th, the EU Council has chosen to adopt a series of legislative acts for the eventuality of “no-deal” situation. However, as the same Council has clarified, these measures have to be considered temporary and limited in scope and unilaterally adopted by the EU.

Regarding the transportation sector, in particular, the temporary acts will ensure the connectivity of basic air transport and of road freight and passenger transport as well, in the case of Brexit without agreement. These measures require reciprocity on the part of the United Kingdom.

Furthermore, the EU has adapted its trans-European transport networks to assure continuity of infrastructure investments. That all sounds good but... will be it enough? We can only wait and see.

TAGS: Aeolus perspectives