The United Kingdom (UK) wants to leave the European Union (EU). The British population went to vote for a referendum on 23 June 2016. The British people chose at that time to leave from the European Union. 2017 was dominated by the negotiations about the Brexit. At the end of 2017 an agreement on the terms and conditions of the Brexit was reached. Since then, the British Parliament has not yet approved the agreement. On March 29, 2019 there was the Brexit deadline, but there wasn’t an agreement yet between the EU and the UK Parliament. The deadline has now been postponed until October 31, 2019.
Nothing will change until October 31, unless the new minister Boris Johnson is in a hurry with the Brexit deal. All the European laws and regulations are still in force if the Brexit has not been implemented. But what can we expect after the Brexit? Tconsult provides you with the 5 most important points of attention in the logistics sector.
The Brexit unconditionally leads to new laws and regulations, which means that new requirements are set for drivers. For example: new safety regulations, professional competence requirements and emission requirements. If new rest and driving time agreements are made in the United Kingdom, the agreements can deviate from the European Union, resulting in more delays. The new regulation rules may give impetus to impose fines for crossing the border. Finally, new permits will be required for the Brexit. All EU trucks currently drive freely through the EU with a European community driving license, this speed up the flow. However, the permits granted by the UK are not accepted by the EU with a hard Brexit.
2. Border checks
It is mainly necessary to do controls, if the UK leaves the Customs Union (there is free movement within this Union of goods and services) and the internal market of the EU. This will probably be the biggest obstacle in the logistics sector. Currently, there are two to three documents needed for the export to the UK. After October 31, the number of documents can rise to a minimum of seven documents. In short, more documents result in extra control. Border controls also mean import duties for EU products coming to the UK and vice versa. If no agreements are reached, the import duties of the World Trade Organization (WTO) apply.
Increasing laws, regulations and border controls will inevitably lead to more delays. Delays affect the market introduction time, also called Time to Market (TTM), of a product. The TTM is the time spend starts from design to the availability of the product to the market. This is mainly important in markets where products have a limited lifespan, such as food. The longer the introduction to the stores takes, more potential sales are lost and the chance of a decline in product quality. Conversely, a short TTM gives a competitive edge. A hard Brexit can therefore lead to disruption of the TTM and delayed sales. It also could lead to more personnel costs.
4. Contracts between the UK and the EU
The EU countries and the UK must honor its contractual engagements. The Brexit therefore does not affect the “validity” of an existing contract. However, contractual complications may arise because of the Brexit. Several trade organizations foresee complications in the import and export of products. Also different media warns of long lines at the border. Any delay can lead to an increase in the total costs. The real challenge is therefore to find the right division of responsibility and liability and to include these in existing contracts. It is therefore wise to act now and to ensure that all agreements are contracted.
5. The CMR Convention
As you (probably) already know, in addition to the EU law and all contractual agreements, there is also a CMR Convention. This treaty is also valid in the UK. The Brexit will therefore not have any consequences for the CMR Convention; the treaty will retain its value. This is beneficial and can somewhat soften the shocks of a hard Brexit. Nevertheless, processing CMR’s is often labor-intensive because of the relatively large number of freight documents. To be able to switch quickly with your drivers, it is recommended that you look for smart logistics solutions. Do you want to know more? Watch the Brexit video below with possible solutions.