07 Jul, 2017 |

What impact could Brexit have on the Haulage Industry?

Brexit is a topic which doesn’t seem to have been far from our minds or the news since the landmark vote to leave the European Union in June 2016. Now with the process of leaving the EU having formally started and the recent general election creating further questions over whether we will get a ‘hard’ or ‘soft’ Brexit it appears the topic is to dominate for the foreseeable future.

But what could Brexit mean for the haulage industry? Thought leaders from around the industry have highlighted several areas which could be of concern, some of which are summarised below:

Driver shortage

Like many other industries in the UK, the haulage industry hires many members of its workforce from other member states of the EU with the Road Haulage Association (RHA) stating that over 60,000 of their drivers are from abroad. This in itself could present two difficulties for the industry as part of the Brexit negotiations; recruitment of drivers in the future if we were to lose access to this labour source and the uncertainty that remains over what will happen to EU citizens currently living and working in the UK. However, this could present the opportunity in the long term to invest more heavily in recruitment and training of UK drivers to fill any potential shortfall.

Border controls

Being a part of the single market means relatively limited restrictions and paperwork required when transporting goods across borders of EU member states. However, if the UK is to leave the single market this could mean a return to form filling and barriers, something which a spokesperson for the Chartered Institute of Logistics and Transport (CILT) suggests will ultimately lead to an impact on efficiency of trade in both directions given the slower movement of goods. This could also have a knock on impact on current service level agreements that hauliers have in place with clients. However, at this stage the RHA states that until we know the deal to be made with the EU it’s hard to speculate on how strict any possible new controls could be.

Costs

Many additional cost factors could come into play as part of Brexit – a weaker pound could for example increase the costs of fuel in real terms or make it more expensive to purchase from EU truck manufacturers. Likewise, any tariffs introduced within the EU could add to the cost base of those exporting goods, something which they may look to pass on to transport providers. Reduced efficiency could also have an impact on margins.

Legislation

A significant amount of rules and laws governing the haulage industry are determined by EU legislation, including areas as diverse as driving times, driving licence requirements, design and dimensions of trucks, exhaust emissions and roadworthiness checks. Whilst it has been suggested that EU laws will initially be enshrined into UK law with decisions then made as to which to maintain, for the haulage industry these decisions may well hinge on the deal that is achieved in terms of trade. Rules of safety and compliance may be unlikely to change but there could be impact on employment law so operators may do well to ensure they are fully compliant with all current legislation.

 

Whilst a lot of the potential issues that could face the haulage industry post Brexit are currently speculative until we come to understand more about the deal being sort by and agreed with the EU, they are areas which are likely to be of concern to those working at management level within the haulage industry. However, any substantial change in the relationship that we have with the EU could greatly impact those operators involved in the transportation of goods across international borders.

More information

To find out more about the response from the Transport & Logistics sector to the Government’s Brexit plans, visit the Road Haulage Association website and read their Manifesto for the future economic growth of UK haulage.