Despite all the hype in the media, a hard Brexit would not be a blanket isolation. However, it’s still beset with many concerns, and it’s almost certain to provide the next worst thing for the UK; a slower ability to trade with the European Union. Not only does this affect how UK and EU businesses go about organising and negotiating their exchange of goods, but the sheer viability of their trading is called into question too.
British companies should still be able to make crucial deliveries to Europe. For example, if they’re not in control of their own delivery services, they’ll be able to utilise companies who can guarantee postage to France or any other European countries, ensuring that what links are left are protected and preserved. However, what’s possible isn’t always ideal or in a company’s best interests across the board.
Upon leaving the customs union and the single market, more extensive border controls between the UK and Europe will be brought into effect. There’s likely to be higher import tariffs, taxes and VAT rates, as well as far more convoluted vetting of certain packages and parcels at the borders. Whereas before all that was required of a package was a quickfire scan to pass through customs, more time-consuming procedures will be put into effect on each delivery to authenticate them.
Undoubtedly, this will greatly slow down the delivery times between the UK and Europe, coming in with the potential to stall a company’s subsequent operations too. It may even isolate smaller distribution businesses from immerging onto the global scene at all, forcing them to revaluate their growth, structure and forecasts. Of course, the danger here is how this will impact people’s perceptions and uses of delivery services, as free trade boosted the appeal of rapid delivery.
Many firms will use delivery services to trade what they can with homegrown partners instead, but thereby gradually repurpose what were once fully-fledged multinational delivery companies into home bound couriers. Delivery services will suffer a great reduction in their potential. Where before they were viable candidates to propel items across the world and establish links between global corporations, they are now more likely to be bound within the UK alone, stunting their prospects. For the fewer international deliveries they make, they will likely have to incur extra charges on everyone using their services so that they are compensated for the VAT and taxation at the border. Despite their best efforts here, their cashflow is still likely to be greatly turbulent.
There’s also the trade war between the US and China to consider, and the domino affect it has incurred. Both countries have imposed 25% taxes on $16 bn worth of imports, totalling the amount charged to $100 bn ($78 bn) since last July. Of course, this has shifted the entire landscape of global trade, as these tariffs between two major manufacturing countries majorly influence how other territories will interact with each other. In one way or another, most nations now must compensate with their own extra charges.
Put simply, the trade war has made Brexit an even more turbulent event now too. European countries have begun to bump up tariffs in retaliation to the friction between the US and China, which means the negotiation process between the UK and the EU becomes an even more convoluted development. There’s much less wiggle room for changing minds and compromise, and the delivery services will feel that sting. Trade is now markedly more expensive due to the worldwide tariffs, and couriers will find fewer opportunities coming their way in result. Moreover, the chances they can take will be a costly affair too.