News Content

Logistics industry adopts wait-and-see attitude over future impact of Brexit

OPERATORS in the logistics industry are bracing themselves for tough and uncertain times ahead in the wake of Britain's vote to leave the European Union.

Air Cargo World said airlines it contacted had no comment other than expressing a need to wait and see how the situation will unfold. "I think most just wait for indicators to work out if it is going to impact them," an airline spokesman said.

The International Air Cargo Association (TIACA) said Brexit has heightened complications for the industry. "It is too early to speculate on what the actual implications of Brexit may be for our industry, but the fact is that the UK vote to exit the European Union stirs up the already muddy global picture," said TIACA secretary general Doug Brittin.

IATA, which foresees negative impacts on air freight sectors, said it envisages prolonged uncertainty ahead, suggesting that it could take two years or longer to resolve issues arising from the Brexit decision. A paper on Brexit released by IATA predicted that the decision is going to have serious ramifications for the British economy as well as for trade.

The Organisation for Economic Co-operation and Development reckoned that UK trade volumes could fall by as much as 20 per cent.

Besides a decline in cargo volumes, the transportation sector is bracing itself for additional costs in the wake of the Brexit. The Freight Transport Association (FTA) warned that it will add to costs as well as bring more restrictions and bureaucratic hurdles for moving British goods in and out of Europe.

Much hinges on the terms of Britain's exit from the EU, ranging from a close alignment with Europe to a complete cut, which would base the relations on a WTO footing. Most observers reckon that the UK will seek a closer alignment rather than abandon common frameworks like the European Common Aviation Area.

A complete exit would force the UK to renegotiate countless aviation and trade accords with other nations that have so far been covered by treaties wrought by the EU and ratified at national levels.

This raises questions about a slew of arrangements, from duty benefits for garment imports from Cambodia, Myanmar and Bangladesh that were negotiated by the EU, to the US-EU opens skies agreement. Mr Brittin pointed out that Pre-Loading Advance Cargo Information regulations may require a new version as a result of Brexit.