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            august 26, 2019

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No-Deal Hard Brexit means higher costs for all, says FTA


A No-Deal Brexit at the end of this month would leave logistics and supply chain managers in the UK facing "their biggest challenge in almost a generation," says the Freight Transport Association (FTA).
The UK Parliament voted last Thursday 413-202 in favour of a having Prime Minister Theresa May seek an extension to Article 50, the process under which Britain would leave the European Union. British lawmakers also voted 334 to 85 against a second Brexit referendum.
Next Thursday Prime Minister May is expected to ask the European Union to extend the Article 50 deadline.
An EU spokesman was cited in an American Shipper report as saying: "An extension of Article 50 requires the unanimous agreement of all 27 member states. It will be for the European Council (Article 50) to consider such a request, giving priority to the need to ensure the functioning of the EU institutions and taking into account the reasons for and duration of a possible extension."
Thursday's vote followed one on Wednesday by parliament to reject a no-deal Brexit, but Mrs May said that remained the default option for the country.
Following that vote, the FTA announced that it "has doubled down on its advice to logistics operators and importers and exporters to prepare for a no-deal outcome."
"As further debates and votes take place in the House of Commons over the coming days, FTA is advising those businesses responsible for keeping Britain trading to keep planning for the worst-case outcome for logistics and supply chains a no-deal Brexit in order that raw materials, goods and services continue to reach those who need them with limited delays.
"With only 13 working days left until the UK's planned departure from the EU [on March 29], time is running out to make these arrangements," the FTA said.
FTA head of global and European policy Pauline Bastidon said: "Managing to keep things going in the face of continuous uncertainty and the prospect of significant and sudden changes in regulatory requirements is not a menial task. Logistics and supply chain managers in the UK now face what is possibly their biggest challenge in almost a generation.
"The reintroduction of customs formalities and food safety checks for trade with the EU, the restrictions placed and red tape imposed on transport operators, and the significant cost of re-organising the way we do logistics and manage supply chains should not be underestimated.
"The challenge for our members will be to turn sometimes incomplete government procedures into workable business processes to keep supply chains running in an efficient way in less than 13 working days! This is not a trivial job and the scale of the challenge should not be underestimated," she added.
Increased import taxes and transport delays could all mean a rise in prices given that 30 per cent of all food consumed in the UK comes from the EU. What's more is if a no-deal Brexit was followed by a drop in the value of the pound sterling as that would also have the same effect, the BBC said. Traffic at ports and highways is expected to see further delays.
Forwarder Flexport said already shippers are transferring UK assets to European Union member countries. It said assets based in the EU will start looking like a safer bet, avoiding any UK logistics delays sparked by Brexit.

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