Are UK Logistics Companies Ready for US Trade?

With October 31st just around the corner, the Brexit deadline moves closer and closer to a 'no-deal' with the European Union (EU). However, the Prime Minister, along with numerous UK-based companies are beginning to look at and even consider this trade deal as outlined by the United States as a viable, fluent and lucrative transition from the EU. 

Of course, depending on who you ask, all of the deals present their fair share of caveats to varying extents. Regardless of the deal that is finally taken, all of this activity and bureaucratic red tape makes for a rather sticky situation. One that has a lot to do with the global supply chain and reaches deep into the pockets of the logistics industry.

But how does all of this Brexit stuff actually affect international trade? More importantly, are UK logistics companies ready for such an overhaul to the industry?

Well, we've reached out to some of our friends in the UK to help shed some light on all of this for you!

How Will Brexit Affect International Trade? 

The logistics infrastructure in the UK is strong. In fact, it supplies many resources for the EU and the rest of the world. Furthermore, it has done so for decades.

The first big change that will happen is an increase in Transatlantic shipping. Right now, these shipments are usually performed on a fairly intermittent basis. However, a no-deal Brexit will secure a more permanent basis for Transatlantic shipping.

The hurdle to this comes in the form of a lot of new and unplanned challenges. To combat this, Prime Minister Boris Johnson has released 3.1 billion in public funding to help businesses prepare for what is starting to look like an inevitable no-deal Brexit.

On the US side of the discussion, President Trump has often referred to a slow and staggered transitional period. 

This transitional period could quite possibly allow the UK government to make the necessary upgrades and or build new infrastructure. For example, new freight vessels could be made sea-worthy leading up to the deal. Maybe even ready for first shipments within the weeks following. Likewise, this would be the perfect time to perform upgrades or maintenance to existing merchant fleets. 

Once the UK leaves the EU, all legislations and import laws set by the EU may become British law. This would allow the UK to use the EU platform and build onto it with the inclusion of America in the future.

Overall, Brexit will affect international trade the most in regard to the preparation and reworking of existing sustainable logistics processes. Initially, it will slow things down considerably as the deal settles with the majority. However, so long as UK logistics companies prepare ahead of time, the rebound shouldn't hurt too much!

How Does Brexit Affect Small Businesses?

More often than not, small businesses rely on more international companies to help them build and plan for the future. This can lead to more lucrative contracts, making the business grow quicker and become more beneficial much quicker. 

If a small business in America is directly or indirectly connected to companies in the UK, Brexit is going to have an impact on that companies state of flux. This simply happens by proxy. If rates rise on one end, some of those costs roll down to the smaller companies, in turn. 

Brexit is attributed to profit loss for larger companies in the UK. And this isn't a theoretical situation, it is happening right now. The longer the various deals are up in the air, the more companies begin to act on their own feelings toward it. The reason for this is because there is a sizeable uncertainty of where trade is going to come from after the 31st of October. 

In turn, this leads to the upturn in loss of business and or outright closures. 

Unfortunately, companies who already struggle may not last the Brexit distance. It may simply prove too daunting. 

The 3.1 billion released by the PM may just allow those companies to keep their business flowing. 

Can the US Trade Deal Help the Future of UK Logistics Companies? 

As UK logistics companies revert from EU trade over to US trade, this will most definitely pose a struggle. 

Changing the way we trade, travel and source vital resources is highly important. Not only for our business but for our very future. Trading in part with America will hopefully help to soften that transition, allowing British businesses to focus on making new and important connections and partnerships overseas. 

Ports being used more frequently may lead to more modern freightliners for both the UK but for the US. Goods may be cheaper as trade tariffs could be set between US and the UK more reasonably. 

Once the flow of trade is fluid, we should expect small companies from both nations to massively benefit from a Transatlantic trade deal.

Final Thoughts

Having a different option apart from the EU deal can only be a good thing. This would be good for the UK government and the people who voted for the UK to leave the EU. Furthermore, it allows the UK and the US to form a closer alliance in the way trade between the two countries happens.

Want to know how you can best prepare for all these changes surrounding Brexit? Reach out to the team at Redwood Logistics today!