Supply chain challenges to be faced post-Brexit are enormous
Truck drivers are one of the primary drivers of a growing economy - pun intended. Bringing that into perspective, the United Kingdom currently employs over 43,000 truck drivers hailing from continental Europe, who keep the supply chain running in the country. The problem though is the looming Brexit date, which many believe could snuff out the prospects of these drivers continuing to work in a post-Brexit UK - bringing the logistics engine to a screeching halt.
At this time of reckoning, the UK government is mulling of ways to retain the truck drivers post-Brexit, which would involve the country to uphold its assurance of letting the EU drivers retain their permits. Even then, there is a faint possibility of disillusionment amongst the driving community which might trigger an exodus if the political and economic scene gets tough.
“It is not just drivers, 25% of all warehouse workers in the UK are EU nationals – the government has said these people will be able to continue working, but we need legal validity,” says Deputy chief executive James Hookham. “Driver shortages in the UK already number 50,000, so losing 43,000 in one stroke would almost double that number, and bring the economy and supply chain to a crashing halt.”
And the tussle does not just end with pacifying drivers. There are 180,000 businesses in the UK whose sphere of international trade relations revolves only around EU and thus, would be hit hard post-Brexit. Ever since Prime Minister Theresa May had confirmed the withdrawal of UK from the EU Customs Union, a knife has been left hanging over the head of these businesses, as they would have to understand the customs classifications that they fall under.
The process being complex, government authorities believe that a notice of about six months would be vital for businesses in comprehending the classification, training its workforce and in revamping organizational structures to suit changes at the borders.
Apart from the deluge of issues with the supply chain, there is a problem with potential container logjams at the UK ports, because the bigger continental European ports would be off limits to dock post-Brexit. The port of Southampton has recently seen haulers who have said that they are looking for price increases to compensate the higher costs of container transportation due to longer waiting times.
The port administration has come out against the claims saying the turnaround times have actually reduced during the last year, citing statistics that the time had decreased from an average of 36 minutes in 2016 to below 33 minutes last year. Nonetheless, liner analysts have reasons to suspect oncoming challenges for haulers based on the current schedule of vessel calls at Southampton. The vessel arrival times seem to be bunched together, making the weekly spread uneven with 21% and 20% of the total weekly demand peaking on Sunday and Tuesday respectively.
The problem arose when The Alliance services moved base from the Felixstowe port to Southampton, which forced a lot of haulers to move to the latter along with their customers. Though Southampton is the second largest port in the country, it still does not have the facilities of Felixstowe. That impediment coupled with the introduction of larger liners in its schedule and a dearth of driver availability has made the situation worse for the port. Estimates put the number at 15,000 containers during peak times, which is significantly higher than the 6,500 that was the average before the onset of The Alliance into Southampton.
Bottomline, it is a bit ironic that Brexit, which came about partly due to the issue of immigrants, is having a field day in worrying about their absence post the referendum. The United Kingdom has a crunch in both labor and also with a tilting average age of workers which is nearly past its prime. The UK Commission of Employment and Skills reports that only 9% of the existing workforce in logistics is under 25 years old, which makes the future prospects dreary.
The weakening pound against the euro already prompted a reverse migration of sorts, and when Brexit finally hits, the value of pound could further tank, piling up reasons for EU citizens to move back to the mainland. The UK government needs to act, and act fast, with affirmative action that would keep the migrants in place and also by training locals to take up supply chain vacancies at the earliest to save the country from falling into a logistics chaos.
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