The United Kingdom-based logistics community is experiencing the first subtle waves of the disruptions to the supply chain sure to come with Brexit, according to one regional forwarder Davies Turner. The company said it is experiencing an unseasonal bloat in demand for warehousing capacity for early 2019 – which is normally a slow period following the holiday rush.
Davies Turner said it believes this is a result of shippers attempting to stockpile product, not necessarily for peak season, but in preparation for any disruptions that occur as a result of the U.K.’s expected spring departure from the European Union. The forwarder reported there has been a “definite upsurge” in the number of customers contacting the company with concerns about the “transition period,” which will occur surround the official departure of the U.K. from the E.U. in March 2019.
“We suspect that the ongoing uncertainty over Brexit will only lead to more demand for short-term storage in the event of no deal or an unsatisfactory outcome with no mutual recognition or trading agreements in place,” said Philip Stephenson, chairman of Davies Turner.
Stephenson added that, while there is a boost in demand from concern about Brexit, more predictable factors – such as the Chinese New Year, which falls on Feb. 5, 2019, a few weeks before the Brexit deadline – could also be playing into demand for logistics services in the U.K.
The potential of the “no deal” outcome that Turner spoke of seems like an increasingly real potential outcome, as negotiations between the U.K. and E.U. continue to drag on fruitlessly. Last week, the U.K. government released what is said to be its final budget before Brexit hits, which did little to outline any hard details on how cross-border trade with Europe will work once the severance occurs.
Industry members, like the British International Forwarders Association, have been vocal about this concern. Robert Keen, the organization’s director general said that there is a real “potential impact on infrastructure plans, labor shortages and border delays” in the event of a no-deal Brexit and added that more progress in negotiations is needed “if a frictionless border is to be achieved.”