The world continues to feel the impact of Brexit. Shipping to Europe and the UK has changed, both in the short term and the long term.
But what do the Brexit shipping impacts mean for you, the consumer? Do the Brexit and shipping industry complications have much visibility for shipping customers? How is shipping different going forward in a post-Brexit world?
Today in the Trans Global Auto Logistics Blog, we are looking at Brexit, shipping to Europe and the UK, impacts on the shipping industry, and how all of this affects you.
The Big Picture Summary
The bottom line for shipping customers is that Brexit will have an overall negative impact on international shipping for the foreseeable future, particularly shipping to and from the UK. Some of the key trends to expect are:
- Higher shipping costs
- Longer shipping times
- Unexpected delays (mainly in the near future)
- Greater regulatory burdens
- More logistical complexity in the process
- Reduced availability and breadth of shipping services (mainly in the near future)
When it comes to Brexit and shipping industry companies, the market will gradually resolve most of these problems. But it will take years, and some of the problems are probably here to stay.
Meanwhile, there are some localized winners. If you’re a non-UK goods company who directly competes with UK companies on the international market, you may gain an edge — especially in the short term. With Brexit, shipping to Europe and elsewhere is easier right now if you’re not in the UK.
Immediate Post-Brexit Shipping Impacts on the UK
At the start of 2021, immediately after the UK left the EU single market — a legal framework that allows goods to move between participating countries without the burdensome international customs inspections usually associated with national borders — international shipping around the world was thrown into turmoil and uncertainty. Post-Brexit shipping to Europe from the UK was hit particularly hard, becoming less reliable, more expensive, and slower. Shipments into the UK from Europe were hit hard too.
Highlights: Disruption, Disruption, Disruption
- Shipments into the UK — not just from the EU but globally — were disrupted due to Brexit-related tax collection issues, as many shipping companies were not set up to handle the new and uncertain tax obligations.
- Shipments into the UK were also disrupted due to pandemic-driven fluctuations in consumer demand, container shortages, and port congestion. Brexit made things considerably worse by creating a spike in demand at the end of 2020.
- These problems triggered a reduction in service to the UK by mainline cargo carriers, making things for the UK even worse still.
- Post-Brexit shipping to Europe and Northern Ireland from the UK (Northern Ireland continues to abide by EU single market regulations) met with new uncertainties, delays, and the aforementioned reduction of mainline carrier services to and from the UK.
Shipping Rates Soar
One of the first and biggest Brexit shipping impacts was that shipping rates exploded. Most notably, rates from Asia into the UK spiked fourfold, reaching record highs.
This was due to a massive spike in consumer demand, especially in the UK — where citizens were eager to take advantage of the European single market while they still could, and had excess funds to spend on consumer purchases due to reduced availability of hospitality services during the pandemic. This caused a flurry of Brexit shipping to Europe and the UK from Asia.
This surge in imports from Asia led to UK port congestion, exacerbated by staffing shortages due to COVID. and a glut of empty containers stranded in the US, UK and Europe due not only to the Brexit situation but the pandemic as well. With so many containers in the West, there were not enough containers available in Asia to meet the surge in UK demand, leading to the spike in rates.
The Good News
The good news is that the worst Brexit shipping impacts — the shipping disruptions — are going to subside, or have already been subsiding. Brexit and shipping industry companies aren’t “enemies” of each other: The demand for shipping services will be strong over the long term, which means that the shipping disruptions will ease up as the initial shock of the UK’s departure from the single market fades. So the UK’s post-Brexit shipping to Europe will eventually stabilize.
In the meantime, the UK is eager to make new trade agreements with other key trading partners like the U.S., which, once in effect, will likely have a positive impact for companies shipping to or from the UK.
A Less Favorable Customs Landscape
As mentioned, the shipping market will gradually optimize for the new, post-Brexit economic landscape. However, one thing that can’t be optimized away is the new regulatory barrier when it comes to Brexit shipping to Europe (and Northern Ireland) from the UK, and to the UK from Europe.
We expect the rise of border control and customs barriers between the UK and the EU to be one of the main long-term Brexit shipping impacts. Some of these barriers will be monetary in nature, in the form of various direct fees, and associated cost-of-compliance fees for shipping companies. Other barriers may see quotas or bans on what can be shipped between the UK and the EU.
And then of course there are the barriers of time: Brexit shipping to Europe – UK routes will definitely become and remain slower due to increased inspection times. This has already come to pass in the form of long commercial queues at border stations. Over time these bottlenecks will be solved, but the longer inspection times are probably here to stay, and will become one of the other main Brexit shipping impacts in the long term.
On a positive note, we expect, for the most part, that both the UK and the EU will try to minimize these barriers, since it is greatly in their mutual economic interest to do so. And we have seen the UK largely choose to continue to abide by, for example, existing EU environmental and safety regulations pertaining to international shipments.
Just-in-Time Inventory Management
The slower reality of post-Brexit shipping to Europe, and vice versa, is having a global impact on companies that use a “just-in-time” inventory management system. Under this system, supply chain disruptions can lead to sudden and serious shortages. Until the uncertainties are resolved and equilibrium is achieved in UK – EU shipping, just-in-time may become less desirable for some companies.
Brexit and Shipping Industry Companies
Shipping companies themselves have experienced considerable post-Brexit shipping impacts and uncertainty.
- UK shipping companies are experiencing loss of cabotage at European ports — i.e., the ability to run shipments between two non-UK terminals — making it much more expensive for them to do those kinds of routes.
- Shipping companies around the world are having to bolster their regulatory compliance to meet the merging requirements for post-Brexit shipping to Europe and the UK.
- As mentioned, there is a continued risk of the UK losing its privileged access to direct service from the mainline shipping companies. To the extent this happens, Britain will become more reliant on auxiliary / feeder carriers, which is more expensive and adds a step in the shipping process.
The shipping industry as a whole will not be particularly hurt by Brexit, and shipping industry companies are already settling into a new equilibrium. The good news for you as a shipping customer is that, as the initial post-Brexit shock fades, you can expect the reliability, availability, and breadth of shipping services to all improve, and the spike in shipping rates to come down (albeit probably not to what it was before Brexit).
Shipping to Europe and the UK is definitely still a viable option! Shipping companies have dealt with international borders long before Brexit, and shipping industry best practices are already highly advanced and ready to be applied to the UK – EU situation.
Get the Reliable International Shipping Services You Need at Trans Global Auto Logistics
The biggest takeaway from Brexit is the uncertainty that it brings. It will take decades for everything to play out. But in the meantime, when you need to ship to or from overseas, including the UK or EU, you have good options available.
At Trans Global Auto Logistics, we have responded to the flurry of post-Brexit shipping impacts by closely following developments, building out new capabilities and compliance protocols wherever necessary, and ensuring the absolute minimum of disruption to our shipping services.
We won’t be stopped by Brexit! Shipping to Euriope and the UK with Trans Global means taking the stress and hassle off your hands by letting us get it done right. We have over 30 years of experience, and are proud to offer a wide variety of shipping services and modes of transport.
Speak with Our Knowledgeable, Friendly People
We hope this article has helped you better understand the major Brexit shipping impacts in terms of customers like you who ship internationally. At Trans Global, we are ready to deal with Brexit and shipping industry complications. Trust us with your post-Brexit shipping to Europe and the UK!
- Contact us to discuss your shipment, ask questions, or get more information.
Explore Our Shipping Services
Here are some of our most popular international shipping services:
- International Cargo Shipping
- International Vehicle Imports
- Air Freight Shipping
- Household Goods Shipping Overseas
- Military POV Shipping
Also be sure to check out our resource guide, Container Shipping to the UK.
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