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The UK referendum 23 June

Is the EU about to experience a Brexit?

 

First, everybody spoke about the Greexit, now a possible Brexit is knocking on the door of the EU. In two weeks the British will have to decide the future of their country and the relationship with the rest of Europe. Will UK become the first country to leave the European Union of their own accord? The predictions on the outcome of the referendum are still uncertain even so shortly before the referendum. According to the latest polls the vote are almost on a dead level. Nevertheless, the transport and logistics industry are worrying about the possible consequences, if it should end with a Brexit.

 

Despite being in the EU the UK does have a certain status in comparison to other EU countries. They have maintained their own currency, the Sterling Pound, are not part of the Schengen area and have a high level of economic sovereignty. And at the same time the UK economy is very close connected to the EU. A total of 43.7 percent of the export in 2015 went to EU countries and in regards to imports, a total of 53.1 percent were recorded. The EU countries and hence the EU itself are without a doubt the UK‘s main trading partner.

 

Yes or no?

On the negative side the speculations regard a possible global impact. The UK would exclude themselves of aprox. 50 EU free trade agreements with third countries – and would have to negotiate new agreements which might not be as easy according to among others the US president Barack Obama. He already took position in April on the matter with the comment that the British would end “back in the queue”. A Brexit could then mean that trade barriers would increase the prices on import and the manufacturing and trade whose business depend on imports would be affected severely. Which in the end would mean the consumers would be affected as the price increase would fall upon them. It could also affect the rest of Europe as well.

In the transport and logistics business a Brexit could mean customs control becoming a reality again resulting in prolonged transports and in total a slower logistics process.

 

One of a kind

Maria Toft Madsen, Country Manager Northern Europe at TimoCom, Europe’s largest transport platform, is among others responsible for the UK. Up to half a million freight offers and vehicle capacity is published on the TimoCom transport platform. Maria Toft Madsen’s prediction on the possible Brexit is somewhat more positive and calm: “Of course the European transport and logistics industry prefer that the UK stays in the European Union. But I do not expect a Brexit to become a worst case scenario as many other experts. In our opinion, a decrease of the freight volume on the transport platform from and to the UK could happen. Nevertheless, if it happens, in time the situation will stabilise itself as an exchange of goods with the UK will continue. Our customers in the EU will without a doubt still transport goods to the UK, as it is now with other third countries like Turkey and Norway. The Sterling Pound falling could also lead to an increase in UK exports. Not only a worst case scenario is possible, but as the whole situation around Brexit is new, of course it arises many questions and uncertainty all across Europe.”

 

One industry split in two

Uncertainty is the keyword. A survey from the IMHX shows the latest status on the opinion towards Brexit. The dilemma: As an individual, a majority of those asked prefer leaving the European Union. But they also believe that it would be better for their company and business, if the UK remains in the EU.

When asked what possible prospects the companies and business would have to face with a Brexit, the UK logistics industry does not show a clear picture. The majority (38%) believe that the Brexit would have a negative impact on the business growth, whereas 33% indicated it would not have an impact. Only one out of five participants believes in benefits, if Brexit should become reality.

 

Analysing the whole discussion, the articles and polls on the Brexit and taking it into consideration, one thing becomes very clear: The only thing certain is the uncertainty of what will actually happen, if the UK vote to leave the EU.

 

Source: TimoCom, IMHX

 

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