Since the UK’s departure from the European Union on 31st January 2020, the UK logistics sector has been plagued with challenges. Ongoing operational adjustments, handling delays and complex import/export rules have hampered the trade, particularly the movement of temperature sensitive goods, such as food exports which dropped 17 percent in 2023, compared with 2019.
Companies have had to adapt quickly, often at significant expense, to maintain the flow of goods between the UK and the EU. While some of these challenges may diminish over time as businesses adapt, the long-term effects of regulatory divergence and labour shortages will likely continue to shape the logistics landscape for years to come.
“The impact assessment completed by the government prior to Brexit determined that there would be no impact on UK aviation. Our experience shows this is clearly incorrect and we are seeking support to mitigate the issues that have arisen, which we believe affects all UK airlines,” Chris Hope, Chief Operating Officer One Air, outlined.
“Brexit-related regulations have introduced a range of challenges for the logistics sector, from increased paperwork and border delays to regulatory changes and cost pressures,” Steve Parker, Director General of the British International Freight Association, stated.
“Delays, disruption as well as customs and regulatory amendments have all added cost increases to the supply chain,” Richard Thackeray, Chief Operating Officer of HAE Group, added. “Brexit has led to fluctuations in the value of the British pound, which has impacted the cost of goods and services. Overall, the financial impact of Brexit on the airline cargo industry has been multifaceted, involving increased costs, operational challenges, and strategic adjustments.”
Operational barriers
Several areas within the supply chain have been overlooked or insufficiently addressed when considering Brexit regulations. These include services related to goods; digital services and data flows; specialised goods and niche markets; transportation of goods across multiple borders; the Northern Ireland Protocol and intra-UK trade; short sea shipping and smaller ports; as well as supply chain resilience and contingency planning. These gaps have created significant challenges for businesses, leading to disruptions and inefficiencies in the logistics and supply chain sectors.
“These challenges have been particularly detrimental to SMEs, which often lack the resources to absorb the additional costs and complexities,” Parker stated. “While larger firms may be better equipped to navigate these challenges through investment in technology and infrastructure, the overall financial burden on the industry has been substantial, leading to long-term implications for competitiveness and market access.”
“An area that requires more attention is e-commerce, where increased costs have reduced competitiveness in the global market,” Thackeray outlined. “Also specialised sectors such as perishable/pharma and specialised sectors have seen added regulatory processes that cause potential delays.”
For companies like One Air, there are others areas of concern that need to be addressed. When the UK was part of European Union Aviation Safety Agency (EASA), maintenance, repair and overhaul (MRO) operations were automatically approved for use by UK airlines. Post-Brexit only the few organisations who have applied to maintain a separate UK approval may be used.
“This has meant a significant reduction in the capacity available to UK airlines for maintenance and overhaul work,” Hope highlighted. “Combined with little available capacity in the UK this has increased cost and downtime for maintenance work to be completed.”
Support for the sector
While Brexit has introduced significant challenges and barriers that may have lasting effects on the UK’s logistics sector, there are also opportunities for recovery and growth. The UK’s ability to rebound will depend on government policy decisions, investment in technology and infrastructure, and the resilience and adaptability of the logistics industry.
“By focusing on simplification, harmonisation, and cooperation, politicians in the UK and Europe can significantly reduce the friction caused by Brexit in the logistics industry,” Parker declared. “These efforts might include measures that simplify customs procedures; mutually recognise trusted trader schemes; improve border infrastructure, harmonise regulations; address labour shortages; facilitate digital and technological cooperation; promote dialogue and cooperation; revisit the Trade and Cooperation Agreement (TCA); as well as engage in constructive diplomacy. Such measures would not only ease current challenges but also build a foundation for more resilient and efficient cross-border trade in the future.”
“The UK government has now indicated a desire to invest in developing more skills in the UK, which we welcome as a longer-term solution,” Hope expressed. “However, there is an acute shortage of capacity in UK that needs a quicker short-term fix. We believe this can best be achieved by agreeing mutual recognition of maintenance licences and approvals between the UK and EU states.”
“There are several political steps that could be taken to facilitate smoother operations in a post-Brexit landscape,” Thackeray continued. “These include the streamlining of customs and regulatory procedures, infrastructure investment at key entry points and a mutual recognition of standards to name a few. That being said, ultimately, it requires political will on both sides, despite the damage that has been caused, to reach agreement.”
