After much anticipation, Brexit went into full effect January 1, 2021. Far from being a day of celebration, the United Kingdom’s exit from the European Union was marked by empty shelves at stores throughout the UK, lines of trucks backed up at border crossings, and widespread consternation as to what the future may hold.
As the movement of goods and people between the newly separate regions has grown more restricted than in recent memory, increased levels of delays and confusion have impacted operations and border crossings, and many have begun to compare the difficulties plaguing the UK with the logistical “black hole” of the US-Mexico border.
Many of these changes are having a disproportionate impact on the small-to-medium carriers that make up the backbone of Europe’s transportation industry. New obstacles and costs at the border are making it even harder to meet customer demands, even as those demands and expectations continue to increase. And through it all, it’s clear that we are witnessing a profound change in the way business is carried out across Europe — both in the near-term and further into the future.
Just Keep Swimming
Prior to Brexit, customs regulations were at a minimum for goods traveling between the United Kingdom and the European Union. As far as paperwork was concerned, shippers really only had to worry about preparing a bill of lading (BOL) or other shipping document. Now, suddenly, many companies have found themselves engaging in foreign commerce, complete with import/export declarations, required representation at the border and other complexities that had been unnecessary before Brexit.
When you think about the kinds of impacts this can have on parties on both sides of the table, it means we’re going to see a shakeup in many existing vendor and customer agreements — many of which predate the Brexit talks entirely. Combine all this with the fact that we’re effectively rolling out Brexit in the midst of a global pandemic, as well as a worldwide capacity shortage, and the true complexities of the situation begin to emerge.
Because of all this, one thing all these shippers have in common is the desperate need for visibility. Even though the need for real-time data on location and status of shipments has been on the table for quite some time, we’ve seen a real acceleration in the amount of investment going into visibility technologies and other tools that allow shippers to not only see where problems are occurring, but to effectively address those problems as well.
The Dawn of Transportation 2.0
In the next few years, I expect to see companies putting a greater emphasis on digital transformation in the wake of Brexit. I think many companies have already had this on their radar, but up until recently, their plans were much more mid- to long-term. Now, the impact of COVID-19 and the disruption it’s caused throughout the supply chain has caused many companies to accelerate their digital initiatives.
Post-Brexit and post-COVID, it’s easier than ever to justify the decision to invest in supply chain visibility technology. Both shippers and carriers are seeing the benefits of investing in better technology and more efficient operations, which will serve their businesses — and the entire industry — well in the months and years to come. This is exciting to see in an industry that has been considered outdated for quite some time now.
At the same time, the barriers to entry are getting higher throughout the industry. As the cost of business on both sides of the border increases, it limits the number of companies that can take part, effectively squeezing out smaller operations from conducting business between the EU and the UK.
Coming Together, Drifting Apart
All of this begs a very important question: Can technology connect where politics will not?
Transportation has always been a highly commoditized industry. In the past, a load would be awarded to a provider simply because they were less expensive than their competitors. Now, we’re starting to see shippers moving away from the mindset of “cheaper is better”, and instead becoming more willing to pay a premium for providers who are able to accommodate requests for GPS tracking, visibility and other technical capabilities.
This is interesting to see, because it really marks a revolution in the European shipping industry. Instead of engaging in a race to the bottom, we’re seeing the beginnings of a race to the top. Where price was once the only factor, causing carriers and freight forwarders to scramble to drive prices lower in order to remain competitive, we’re increasingly seeing companies who are raising the bar, investing in new technologies and streamlining their business practices in order to provide an unparalleled customer experience.
It remains to be seen whether this growth in technology and collaboration will be enough to offset the new challenges posed throughout the industry by Great Britain’s exit from the EU. However, I’m hopeful that our industry as a whole is moving in the right direction: connecting and coming together even as the rest of the world is pulling apart.