Brexit Impact: Ocean, Road and Air Freight

Ocean Freight

• The operating costs of freight forwarders may possibly be impacted if a new tariff regime takes effect. This could impact the bottom line of freight forwarding companies, who in turn may try to pass on these costs to buyers.
• British shipping firms who trade with European Union may lose the maritime cabotage rights, which can increase the shipping cost for British companies.
• In the short term, port congestion could potentially be a major constraint.  Vessel calls in the country’s ports could be impacted as there is limited availability of British flagged container ships. And as a result, shippers may be forced to rely on feeder vessels for the cargo movement.

Road Freight

• Road freight sector is expected to be hit by labor shortage post Brexit. One will have to wait for the new laws and regulations.
• Transportation of goods may take longer as Brexit can potentially create barriers at borders.
• Customs check of trucks plying between UK and EU may cause congestion. This can also impact the trade volume over a period of time.

Air Freight

• Only a comprehensive and clear Brexit agreement can ensure seamless air connectivity between UK and EU.
• UK can no longer be a part of European Union Aviation Safety Agency (EASA), which monitors and standardizes Aviation safety. The agency has said that the withdrawal will significantly alter its cooperation with UK authorities.
• UK’s aviation relations with seven countries are covered under EU-U.S. open agreements. The country may have to renegotiate these agreements.
• Border management procedures will be affected as additional checks for passengers and cargo is anticipated.
• Brexit will lead to shortage of labor in the aviation service sector.
• Flexibility in slot allocations will be disturbed as Brexit may lead to UK being not part of European Common Aviation Area (ECAA).