BrexitCross BorderNews

May’s Brexit plan – how will the freight and parcel groups be affected?

By 20th February 2017 No Comments
Impact of Brexit

By now we are all aware of the key issues featured in May’s Brexit plan, but how do the freight and parcel groups feel about what she has planned for the future?

The FTA’s view

Reactions have been mixed; the UK’s Freight Transport Association (FTA) were pleased that she wants to head towards a process of “tariff-free and frictionless trade” with the EU, even after Britain departs.  Whilst she is continuing to push for “the freest possible trade” with other countries as well as the EU, her aim is to negotiate towards tariff-free trade, creating a Customs agreement and maintaining the common travel area that exists between the Republic of Ireland and the UK.

The FTA felt that her actions would allow them to determine the presence of any possible friction points and then work with the government to bring about the most positive outcome for businesses in the UK.  The Association went on to state: “A truly global Britain, trading effectively with all nations, is something FTA welcomes, and the association urges the government to progress bold and ambitious free trade agreements with key trading partners around the world as quickly as possible to ensure seamless business relationships can continue…..The Prime Minister’s commitment to maintaining the common travel area in Ireland is welcomed by FTA as this is one of the key issues of concern to its members.”

The parcel broker’s view

But what about reactions from parcel firms?  Fastlane International who are a parcel broker, reacted in a good way, stating that they felt the Prime Minister’s ideas were both ‘bold and ambitious’ when it came to putting in place a Free Trade Agreement with the EU.  However, it was not all good; they also expressed concern that her plan to eradicate the EU Common External Tariff will result in UK exporters totting up a bill of some £44bn as well as resulting in serious delays and hold-ups due to red tape once shipments hit EU borders.   Their head of consumer research stated: “Moving outside the EU’s Common External Tariff would mean the need to set our own tariff rates. That entails setting our own duties on 19,000 individual tariff codes across a huge variety of items – a move undoubtedly leading to increased border delays and red tape for British importers and exporters and EU businesses looking to trade with the UK.  It’s a frightening scenario that could result in an increase in the cost of imports of around 20%; £44bn on current UK business exports to the EU of around £220bn.”

Fastlane feels that the idea of the Common External Tariff is purely a way of coding items so that different rates of tax will not be accrued on the same items as they pass through different countries.

So what does the future hold for the UK’s freight and parcel groups?  Will it all be good or are there going to be some difficult times ahead?  The truth is that only time will tell but for now everyone’s eyes are fixed on Prime Minister Theresa May, watching to see what ideas and solutions she pulls out of the bag going forward.