Following the departure of the UK from the European Union and the signing of a trade deal between the two parties, many industries have had to adapt to a new regulatory and commercial landscape. Brexit has had a particularly significant impact on the logistics sector in both the UK and the EU, generating a variety of new requirements, administrative burdens and talent needs. Michael Page recently hosted an on-demand webinar to investigate how the logistics sector in the UK and European Union has been impacted by Brexit. Led by Ben Lyons, Operating Director of Michael Page Logistics, it brought together a panel of distinguished speakers from the UK and EU, spurring lively debate, and touching on key issues that all logistics professionals should know about. Here are five key things we learned from the session:1. As well as administrative costs, UK exporters are having to absorb freight costs. That Brexit has created an additional administrative burden on UK exporters is well documented. But John Lucy, Head of International Transport at the UK Road Haulage Association, also noted that freight costs have increased since January 1st this year. He commented: “UK export freight costs have been traditionally low. This has since turned on its head, with the price for EU export loads from the UK now in uncharted territory. The number of empty trips from European hauliers is increasing, because they are not prepared to pick up return loads. The upshot is a reduction in supply subsequent increase in freight rates from the UK to the EU, which in turn has increased import freight costs since EU hauliers are pricing it up as a round trip.” Meanwhile, John Waldock, a UK Retail Logistics specialist, noted that some UK retailers have opted out of doing cross-border fulfilment completely until the levels of complexity associated with these operations, and the general uncertainty around them, settle down. Jaap Bruining, SVP and Head of Logistics at the Netherlands-based Coyote Logistics, agreed with this analysis. “It’s very logical that we are seeing an increase in freight costs, because the process has become more cumbersome,” he said. “The question is: will freight rates reduce as the industry solves some of the friction in the process? We don’t know the answer to that yet.” 2. Inconsistent rule interpretation across EU countries is making export processes challengingBruining explained that one of the main problems so far following the UK-EU trade deal has been inconsistent requirements between EU countries on the mainland, which has added another layer of complexity for UK exporters. “It must be extremely frustrating for British exporters to deal with,” said Bruining, who went on to highlight that individual countries do have nuances in terms of requirements even within EU structures. Lucy suggested that the different interpretations might derive from different VAT rates and IT systems. He also noted that: “Whether or not these rules disadvantage UK companies, is not really a concern for the authorities in these countries – that’s just the reality of where we are.”3. The skills landscape in UK logistics has changed significantlyThe combination of Brexit and the Covid-19 pandemic has catalysed some major changes in the skills landscape of UK logistics. The need for staff with customs skillsets is no longer limited to intermediaries and exporters; importers now require trained customs staff as well. Michael Page’s Ben Lyons commented: “We’ve seen a big increase in demand this year for customs and export specialists. Many employers need language skills, due to the high levels of cross border person-to-person and problem-solving abilities that are required.” Bruining was bullish about the prospects for customs specialists: “For those who are interested in customs, and are good at it, there will be huge opportunities in the future”. He also noted that greater flexibility in working location meant that employers could look further afield for these skills, tapping into previously unavailable candidate pools. However, both Lucy and Waldock expressed concern about the UK’s driver shortage. This has been a long-standing issue, and may well worsen in future, with large numbers of EU workers departing the UK in 2020, and net migration trending downward.4. Transit lead times between the UK and the EU have increased for good Lucy argued that increased lead times are here to stay: “The friction that now exists between the border makes it impossible to bring lead times back to where they were before January 1st. For example, transit times from the UK to Ireland were previously Day 1 for Day 2/3. After Brexit, It’s currently Day 1 for Day 4/5.” He also noted that groupage deliveries have been particularly impacted, saying: “Some double deck trailers can have 50 pallets, which means 50 lots of paperwork. If one of those is incorrect, the whole trailer stays there until that one item is cleared.”Routes from Ireland to the EU have seen major increases as companies attempt to bypass customs requirements by travelling via the UK mainland. Lucy commented: “Freight volumes from Rosslare port to the EU have increased by around 500%, and much of the land bridge traffic from Ireland to the EU via the UK may well have permanently migrated.” 5. There are opportunities for improvement and reasons to be cheerful The panel highlighted several areas which, if improved, could facilitate smoother UK-EU trade and logistics. Bruining highlighted the future opportunities presented by digitalisation of customs documentation. “It is not ideal to still be working with so much paperwork in 2021, and there is a massive opportunity to digitise some of the documentation work,” he said. “The winners will be those who can manage these processes more efficiently through digitisation; but they will still need the resources and the people to fix the problems that arise.” Waldock suggested that UK companies take a harder look at stocking locations. “I expect to see UK retailers and distributors look at their European network infrastructure to reduce the administration burden and speed up delivery,” he said. “They might look to overstock their European locations and supply direct to consumer from there, rather than shipping from the UK.” Bruining agreed with this analysis, saying: “If some of the teething problems are not ironed out, I expect many British businesses to consider setting up a secondary stock location on the European mainland”. Meanwhile, Lucy speculated that the post-Brexit tendency of European hauliers to avoid UK to EU loads increase demand for UK international hauliers: “A silver lining of Brexit for the UK logistics industry might be a renaissance of the international haulage market.”Finally, Bruining was optimistic that operations would become easier once UK side began checks: “When the UK starts making checks later in the year, it will be much smoother, as the grace period has been crucial to help everyone prepare”.In such a rapidly changing landscape and with so many challenges facing logistics professionals, it is more important than ever for industry leaders to stay up to date with the latest strategies and approaches. If you want to learn more about the impact of Brexit on the logistics sector in the UK and the EU, check out our on-demand webinar.If you are looking for your next career opportunity in the logistics sector, or are seeking top talent to join your team, you can arrange an introductory conversation with one of our expert consultants.