UK’s vote to leave the European Union has had a huge global impact. From stock prices to travel plans, a lot of people have been affected in some shape or form.
However, while some have barely felt the shift, those engaging in international shipping face significant changes.
The landmark decision to leave the EU has both positives and negatives. But, for many, the mystery surrounding Brexit is a constant source of stress. What does it mean for your business? Will it make your logistics more complicated?
If you ship goods internationally, here are a few important aspects to keep in mind:
In the short term, it is widely believed that the volume of shipments in and out of the United Kingdom will decrease. This can be expected, as the nation is re-establishing itself within the global market.
However, a large contributor to this relative decrease in trade volume is the instability and uncertainty of Britain’s trade agreements. No longer amongst the EU, the UK must forge new alliances and agreements, which will undoubtedly impact the number of goods coming in and out of the country.
But honestly, it’s still a bit too early to be able to tell what will happen. As the nation stabilises its relationships around the globe, more news surrounding trade agreements and tariffs will emerge.
Border control and customs
As is always the case with international shipping and logistics, border control and customs can pose a threat to the speed of your delivery. However, with Brexit, it is possible that the days of red tape and arduous documentation may return.
We are sad to say this, but the potential for increased costs and decreased efficiency here is unfortunately very real. As more issues arise, they will have to be dealt with as soon as possible by the government. This is exactly why many companies are already lobbying the UK government to ensure that the simplification of shipping process is on the agenda.
While Brexit is a turbulent time for the UK, the increasingly globalized world we live in helps to encourage open borders and advantageous trade agreements.
Port postage by container lines
It stands to reason that for those importing or exporting from the UK, the ability to ship directly from the UK is preferred.
However, the recent Brexit move risks potentially isolating the UK politically, which could lead to a lack of direct vessel calls. As the UK no longer has a large UK-based container fleet to play the hero, this would result in shippers needing to rely on feeder services.
Brexit Affecting Customs and Longer Shipping Times
It is very likely that Britain will no longer benefit from the open borders that enable the freedom of movement of goods and people. This means much stricter customs regulations for all types of packages entering and leaving the UK and EU. It’s even possible that some British products could even be restricted or prohibited.
Longer shipping times are a likely outcome for packages crossing from either side. Especially during the first few months of 2021 parcels have a higher chance to be delayed.
Tariffs and VAT
The change of tariffs depends on the future trade deals and relationships determined in the coming year. However, it could be that both the UK and the EU will impose tariffs on each other’s imports. In other words, this could result in prices rising and risks sparking a trade war between the two entities.
VAT laws are a major point of contention for the Brexit negotiations already. If the UK cuts ties with the EU completely after the transition period, UK businesses will no longer have to collect any VAT on products sold to EU customers.
Brexit affecting business that import goods from the UK
If you import any of your supply chain or products from outside of the UK for your business(es), your process may be affected, including an increase in costs and more importantly – time.
Another issue could be sourcing enough workforce for your order fulfilment. The current free movement of EU nationals into the UK is something that could change.
Returns are a very sensitive topic, and while current EU law protects EU citizens’ right to return a product within 14 days, it isn’t mandatory to offer returns to products shipped outside of the EU. So if you’re a business on either side, it will now be up to you to decide what you offer your customers.
However, as always, our advice remains the same for any international shipment: It is a customer-friendly strategy to offer your customers the option to return if they want to.
Moving forward, as soon as the Brexit transition period is over, we will have more concrete knowledge of how trade will continue between the two entities. But until then, please keep in mind that there will be an increase in shipping costs between the EU and the UK, and more importantly, the handling/shipping time will also be increased.
Also, feel free to read our blog from last year about Brexit by clicking here.