How will the general election impact the logistics industry?

  • How will the general election impact the logistics industry?

    After Article 50 was finally triggered by the government on the 29th March, marking the start of two years of negotiations that will result in Britain leaving the EU, you’d think we would have had enough of politics for a while.

    However, it seems the current government had other plans, and earlier this month, Prime Minister Theresa May called for a general election on the 8th June – three years earlier than scheduled. Her reason for holding the election early is a bid to strengthen her hand in Brexit negotiations, as currently the Conservatives hold a tiny majority in the House of Commons, meaning that policies are being derailed. By holding the election, the Conservative party hope it will result in them getting a bigger majority in the House of Commons making Brexit talks easier.

     So far, Brexit seems to be a key focus for the election between the main parties. Possibly because the outcome of leaving the EU could have several implications if negotiations with the EU are not managed properly.  There are implications for the logistics industry. For example:

    • Trade – the government states that 44% of UK exports find their way to EU countries, and reduced trade with mainland Europe may equate to less demand for road haulage.
    • Border controls – Leaving the EU could create barriers at borders for administration of trade in both directions, impacting logistics efficiency.
    • Health & Safety – While the fundamentals of safe and compliant operations are unlikely to change, haulage operators need to be prepared for any changes to current legislations.
    • Cost – Reduced freedom of movement could impair operating efficiency and cause a reduction in hauliers’ margins. Another area of concern is fuel prices; if the pound remains weak, it could increase the cost of fuel for the long run.

    At time of writing, the two major parties, Conservatives and Labour, are yet to release their manifestos for the coming election, but if the Conservatives succeed in the election by winning more seats, it could help strengthen their hands in the forthcoming negotiations, making EU trade talks easier to handle.

    However, if the Labour party take greater control in parliament, party leader, Jeremy Corbyn has made it clear that there will be no second referendum and that their policy on Brexit is to make it fair for everyone and retain “tariff-free access to the European market”.

    While things remain uncertain, Logistics will always play a vital role in the success of the UK economy. Whatever the results of the general election, it will at least give us a clearer idea of how Brexit will develop and how it will impact British businesses, meaning that we can prepare for the best or worst outcome.

    How do you think the general election and Brexit will impact the logistics industry? Tweet us at @MLogistical.

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