British logistics, aviation industries’ worry deepens over anticipated Brexit chaos

As the March 29, 2019, deadline for Brexit draws nearer, aviation industry organizations, such the British International Forwarders Association (BIFA), and the European Regions Airlines Association (ERA) are fiercely advocating for an agreement between the United Kingdom and the European Union to be made.

ERA said the potential consequences of a failure to reach an agreement, a.k.a. a “hard Brexit,” would be “disastrous” to the aviation industry. In the event of a no-deal outcome, long-established free trade agreements between the two regions would evaporate, the association said. The domino effect would start with a strained supply chain at borders and customs, and culminate in significantly higher prices on imported goods for U.K. consumers.

“Even if there is a deal, there is a lack of clarity about E.U. ownership rules that could potentially ground big and small airlines alike, unless there is some form of moratorium,” ERA’s president, Andrew Kelly, said today in a statement. “Yet, we get the sense from the politicians and officials that, on the morning of March 30, the aviation industry will wake up and go to work as usual, even if there is a hard Brexit. It won’t, it can’t and the U.K. and E.U. need to wake up to that fact now, before it’s too late.”

U.K.-based logistics firms are already feeling the first ripples in the supply chain, reporting an influx of regional shippers requesting warehousing space to stockpile extra inventory during the interim between the end of the holiday season and March 29.

A Northamptonshire-based logistics firm, the NX Group, is one such example. Referencing a survey from the British Engineering Employers Federation that indicates a rising trend of preliminary stockpiling is in motion, NX said that it is freeing up as much warehouse space as it can after the peak-season rush in anticipation of a possible hard Brexit.

“Predictions suggest that post-Brexit, companies will have to hold more stock closer to point-of-consumption, due to potential delays, which means storage sites will have to be utilized to maximum capacity as businesses stockpile goods in readiness for March 29 and beyond,” said Neil Powell, managing director of the NX Group.

Despite the unanimously gloomy winter and spring forecast on E.U.-U.K. trade relations being broadcast throughout the industry, there is still time for a mutual agreement to be made. The regions have settled on a “grace period” to begin upon the secession and last until 2020, which will give industry players time to transition into a new supply chain. However, the specifics of negotiations have still yet to be made.