U.K. Freight Transport Association doubles down on advice to members to plan for a worst-case scenario.
The Freight Transport Association (FTA) in the United Kingdom is warning its members that “logistics and supply chain managers in the U.K. now face what is possibly their biggest challenge in almost a generation” if the country makes a “no-deal Brexit” from the European Union.
The U.K. Parliament voted Thursday 413-202 in favor of a having Prime Minister Theresa May seek extension to Article 50, the process under which Britain would leave the European Union.
British lawmakers also voted 334 to 85 against a second Brexit referendum.
The Brexit deadline is currently March 29 and is legally binding.
Next Thursday May is expected to ask the European Union to extend the Article 50 deadline.
An EU spokesman said, “A request for an extension of Article 50 requires the unanimous agreement of all 27 member states. It will be for the European Council (Article 50) to consider such a request, giving priority to the need to ensure the functioning of the EU institutions and taking into account the reasons for and duration of a possible extension.”
Thursday’s vote followed one on Wednesday by Parliament to reject a no-deal Brexit, but May said that remained the default option for the country.
Following that vote, the FTA said it “has doubled down on its advice to logistics operators and importers and exporters to prepare for a no-deal outcome.”
“As further debates and votes take place in the House of Commons over the coming days, FTA is advising those businesses responsible for keeping Britain trading to keep planning for the worst-case outcome for logistics and supply chains — a no-deal Brexit — in order that raw materials, goods and services continue to reach those who need them with limited delays. With only 13 working days left until the U.K.’s planned departure from the EU, time is running out to make these arrangements,” the FTA said.
Pauline Bastidon, head of global and European policy at the FTA, said, “Managing to keep things going in the face of continuous uncertainty and the prospect of significant and sudden changes in regulatory requirements is not a menial task. Logistics and supply chain managers in the U.K. now face what is possibly their biggest challenge in almost a generation.
“The reintroduction of customs formalities and food safety checks for trade with the EU, the restrictions placed and red tape imposed on transport operators, and the significant cost of reorganizing the way we do logistics and manage supply chains should not be underestimated. The challenge for our members will be to turn sometimes incomplete government procedures into workable business processes to keep supply chains running in an efficient way — in less than 13 working days! This is not a trivial job, and the scale of the challenge should not be underestimated,” she added.
The BBC said Thursday, “Even if the deadline is extended to help prompt the divided British Parliament (and divided governing Conservative Party) to agree a Brexit deal, there’s no guarantee they will.”
A withdrawal from the EU would have far-reaching consequences for trade and transportation companies.
The BBC noted that while half the food consumed in the U.K. was domestically produced, 30 percent came from the EU.
“Increased import taxes and transport delays could all mean a rise in prices. And if a no-deal Brexit was followed by a fall in the value of the pound, that would also have the same effect,” the broadcaster said. Traffic at ports and highways is expected to see additional delays.
Forwarder Flexport said already shippers are moving U.K. assets to European Union countries. It said assets based in the EU will start becoming a safer investment, avoiding any U.K. logistics delays caused by Brexit.
