Published on 24 February 2020 General Interest
How will Brexit affect road freight transport?
The withdrawal of the United Kingdom from the European Union officially took place on 31 January, setting off alarms in the ground transport sector. What will happen with the circulation of goods between Europe and its former member state? Will customs duties be imposed which will make European products less competitive?
The transport sector is logically concerned, considering that 8% of the goods transported by Spanish trucks are destined for the United Kingdom and the country therefore represents the fifth largest market for ground transport companies in Spain.
The United Kingdom is in fact the fifth largest destination for Spanish exports in general, according to ICEX, Spanish Exports and Investments. The UK is only behind France, Germany, Italy and Portugal. This strong exporting relationship between Spain and the United Kingdom is reflected clearly in sectors including agro-food and automotive.
Due to this intense commercial relations, Mónica Díaz, Network & Partners Cards EU Manager at OnTurtle, highlights that transport companies “must appropriately understand and be up-to-date with the requirements to adapt to the new rules”.
However, the implementation of Brexit at the end of January still has not cleared up the doubts, as the Withdrawal Agreement establishes a transition period which will last at least throughout 2020 and which could even be extended two more years if both parties agree to do so before 1 July.
This stage of adaptation will allow the United Kingdom and the European Union to establish future relationships at the trade level and in aspects such as logistics, the movement of people and goods or taxes on products, among other issues.
Therefore, during this transition period, the current conditions will remain for the free circulation of goods as the parties progress towards a new trade deal.
The future trade deal between the United Kingdom and the European Union could take very different directions which could strengthen or harm free trade and, therefore, the circulation of road freight transport. While the entry in the European Free Trade Association will keep the British within the European Single Market, other options would involve the imposition of customs duties to a greater or lesser degree. One of the possibilities on the table is no agreement, which would mean applying the customs duties regulations established by the World Trade Organisation.
In this moment of uncertainty, the access to sound information will be key to respond to the possible regulatory changes. “Our clients need to know which type of processes and formalities they must be prepared for based on the agreements reached between the United Kingdom and the European Union, as well as between the United Kingdom and Northern Ireland”, states Díaz.
In this sense, Luis García, Network & Partners Cards EU Specialist at OnTurtle, says that the company “is in permanent contact with different agents from the sector to be able to anticipate its clients’ needs and to keep them informed at all times of the latest news that may arise about this highly relevant topic”.
This uncertainty will inevitably remain in force until the end of 2020, but, whatever the scenario that arises at that time, access to personalised consulting will determine the capacity of the transport sector to react quickly to the new situation.