Hauliers face cash crisis as Brexit approaches
24 June 2019
Declining profit margins have left logistics businesses struggling to fund their Brexit preparations, according to the 2019 Logistics Report.
Launched by the Freight Transport Association (FTA), which represents the interests of the sector, in association with Santander Corporate and Commercial Banking, the report polled the opinions of more than 500 freight and logistics businesses operating in the UK and internationally, to provide industry insight into the latest political and economic developments.
Elizabeth de Jong, FTA’s director of UK Policy, said: “FTA represents the interests of 17,000 logistics businesses; declining profit margins have left them struggling to fund their Brexit preparations. Profit margins were only two per cent in 2018, making any significant financial investment very difficult to justify for any business, especially when the international trading landscape post-Brexit is still to be determined – logistics companies simply do not know what they should be planning for. It is of no surprise, then, that at the time of the survey (January 2019), 37 per cent of respondents had not taken any action to prepare for Brexit and only 17 per cent had created a plan for a No Deal Brexit.”
The survey indicated the uncertainties surrounding Brexit are taking their toll on the logistics industry, with 61 per cent of respondents saying this uncertainty is a barrier to the growth of their businesses internationally.
Ms de Jong continued: “Logistics businesses are also concerned about how the UK’s departure from the EU will impact their workforce; 80 per cent of respondents say the employment status of EU workers is their most pressing Brexit challenge. 13 per cent of HGV drivers currently working in the UK are EU nationals; the continued residency of these workers is not guaranteed post-Brexit. FTA is campaigning for amendments to the Future Immigration White Paper, so non-UK logistics workers are welcomed in the UK, to help address the worsening skills shortage.”
The report also found that the UK’s global competitiveness has dropped significantly and investment in the UK’s transport and logistics infrastructure is urgently required to boost its attractiveness to international investors.