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Brexit’s Impact on International Trade and Shipping

While 2020 may be over, many of its troubles will continue to leak over into 2021—Brexit, the UK’s plan to leave the European Union, among them. Talks of a deal or no-deal and the implications that either outcome would have had were never in short supply throughout 2020.

While trade negotiations between the United Kingdom and the European Union seemed like they would never come to a resolution, a deal was finally struck in the eleventh hour that should avoid some of the chaos that was expected from the no-deal alternative. However, deal or not, Brexit will bring a lot of changes for the people of the UK, the EU, and the world.

History of The EU and The Reasons for UK Leaving

The European Union (EU) was created following World War II, as an antidote to the extreme nationalism that devastated parts of Europe. Brexit, short for “British exist”, refers to the withdrawal of the United Kingdom from the European Union. Prior to Brexit, the EU consisted of 28 countries, known as “member states”. These member states developed an internal single market through an agreed upon system of laws in which all members agreed to comply. EU policies aim to protect the free movement of people, goods, services and capital within the internal market. The idea was to foster a harmonious relationship throughout all member states.

The UK joined the EU in 1973 and officially withdrew on January 31st, 2020. Since the very beginning of its membership, the UK has debated the pros and cons of being in the union, specifically for political and economic concerns. Leading up to 2016, UK independence was steadily gaining popularity among its people. Finally, on March 29, 2017, Prime Minister Theresa May signed the order to officially withdraw Britain from the EU.

Post-Brexit Importing and Exporting

Of primary concern to the shipping world are the changes Brexit will have on international trade. The main issue that Brexit poses for shippers is the establishment of border checks and customs between the UK and the EU. All shipments between the UK and the EU will be considered an import/export, which means added cost and time for anything moving between these two areas.

US companies that have operated warehouses or distribution centers in the UK as a hub for trade throughout Europe will also have to face a few more obstacles now than they did prior to Brexit. These changes are likely to cause delays and disruptions at numerous transportation points such as ports and border entry points. It is expected that these bottlenecks will have knock-on effects that impact storage needs, product leads, and manufacturing operations.

The ultimate impact of Brexit has yet to be seen, but shippers should make a point of taking added precautions for navigating these troubled waters, especially during the tumultuous transition period ahead. Get in touch with the experts at Clear Freight with any questions or concerns about the impact Brexit might have on your supply chain.

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