Brexit scrabble

Brexit Update (Part 2) – How will this affect UK hauliers & couriers

Last month we produced a guide on the major issues likely to impact UK hauliers and couriers. This month, we take a closer look at the key issues as more information becomes available.

Free Access to EEA (European Economic Area)

It is CRITICAL for the UK economy and the UK haulage & courier industry that the government secures a deal which allows free access free to the EEA. This deal needs to be as close to being in the EU as humanly possible. Whilst there is a massive trade deficit, (more goods & services coming into the UK from Europe, than leaving the UK), the UK to EU exports represent 44% or £220 billion worth of goods & services.

Clearly, we can do business with other new world partners, but you don’t replace 44% of your economy overnight.

Remember, any deals done with new world partners is likely to provide a greater opportunity for hauliers, couriers & freight forwarders moving goods via deep sea services & airfreight, compared to intra-European road freight.

Borders between the UK and the EU

Currently goods and services move freely between UK and other EU member states. Any deal done which introduces tariffs & customs clearance will have a massive impact on the haulage & courier industry. Potentially, overnight customs clearance documentation and customs checks at borders would increase. Costs of customs clearance is usually paid by the importer or exporter.

Working time directive

The UK will have to bring in its own version of Working Time Directive (WTD) or continue to support the EU version. Whichever happens, it is highly likely a driver leaving the UK will have to comply with the current EU working time directive to be able to drive within Europe.

Fuel duty cost

There are clear signs that the UK economy is slowing. With a new chancellor, comes new policies. The level of fuel duty the UK pays is the highest in Europe at 57.95 pence per litre, compared to 40.18 pence per litre in Luxembourg. Will Philip Hammond decrease fuel duty to stimulate the economy? It hasn’t been a tool used in the past.

Ireland

The Republic of Ireland and the UK will be the ONLY land border that exists between UK and the EU (assuming Scotland remains a part of the UK). Trade between UK and Ireland is critical to both economies and all political parties in Ireland and the UK are keen for this relationship to continue. Angela Merkel has refused to answer questions on the matter so far. However, Theresa May recently confirmed

“No one wants return to borders of the past”

Mobile phone roaming charges

As previously reported the EU had forced phone providers to scrap roaming charges from the end of 2016. Given the fact that article 50 for the UK to exit the EU is unlikely to be invoked this year, the UK will be still part of the EU when these rules apply. It is unlikely, but not impossible, for phone providers to then increase roaming charges for UK customers.

EU citizens driving LGV for UK companies

The number of UK drivers has plummeted in the last 24 months, with many UK operators seeking drivers from other EU member states. In reality the UK Economy would come to a standstill without EU workers working in the transport industry. Post Brexit free movement of people is the ‘hot potato’ and will only become clear once the details of Brexit start to emerge.

The Freight Transport Association has reported that UK driver ‘packages’ will possibly have to change dramatically to encourage more new blood into the industry to support the industry long term.

Insurance & EHIC Cards

The current EU EHIC card arrangement that allows a free basic level of medical support throughout Europe will be an important one. Department of Health data shows that the EU spent £155m in 2013/14 for treating UK citizens, compared to the UK spend of £30m for treatment of EU citizens - a staggering 5:1 ratio. If a deal is not forthcoming in the Brexit deal, UK businesses will have to increase basic levels of insurance to cover for such medical emergencies.

Stability of sterling

Since the Brexit news, sterling has dropped over 10% in value making the purchase of goods in mainland EU 10% more expensive relatively. There is a second impact which is that fuel in the UK is purchased in $ Dollars making the same equivalent litre of fuel also more expensive. UK Hauliers & Couriers regularly entering mainland Europe should do all they can to make sure purchases in Europe are kept to a minimum to avoid this type of currency shift. The only exception being fuel. Consider filling up prior to entering the UK. It will probably be cheaper.

UPDATE Brexit Update Part 3 now available.

If you have any questions about the affect Brexit may have on hauliers and couriers, drop us an email.

27 July 2016

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