It has been a couple of years since we last heard real rumblings about the possibility of a Brexit – British exit from European Union. This week, as David Cameron becomes more aggressive in the negotiations with the EU he built his re-election on, we’re once again hearing Brexit all over the news. We’re hearing all about how it would affect us, what it would change and whether it was a good idea. That’s all well and good, but what about the really important question? What would a Brexit mean for courier networks around the world?
The first thing that leaps into mind is the idea that if the UK were to step out of the EU, we would lose the free movement of people that the European Union was built upon. This is at the heart of the immigration that David Cameron has found resonates so strongly with the British public, but it also allows for the free movement of goods and mail that is central to an effective and efficient courier network throughout Europe.
You see, when we ship goods and packages within Europe, we do so almost without restriction. There are always items that courier networks refuse to carry or countries prohibit, but as long as the items being sent don’t fall into that category they don’t even have to go through more than a brief scan in customs. This allows for shipments to move quickly throughout the region and means that things like having a package picked up today and being delivered to a friend’s house in Frankfurt tomorrow are not only possible, but relatively inexpensive.
Leaving the EU would change that. Every package that came out of the UK would need to go through customs in the recipient country, and with over 50% of UK exports going to the EU, that would create a massive strain on the 27 countries that the UK leaves behind, a strain that would be echoed for UK Customs as the shipments that once flowed freely into the UK would also have to be more thoroughly inspected.
Perhaps most damagingly however, every item that came into the country with a value of over £15 would be subject to VAT and duties. Sure, that doesn’t sound too bad until you realise that every time you make an order on Amazon that is fulfilled by the EU-Sarl division would be subject to those costs. That’s an extra 20% tacked on to everything you order from outside of the UK, which can start to mount up pretty quick.
It doesn’t just apply to Amazon either; businesses who do a lot of importing into the UK would be subject to those same duties. Through UK membership in the EU, the free movement of goods has allowed businesses to avoid having to pay these taxes. In leaving, they would essentially be removing European suppliers from circulation and forcing businesses to find new ones – and if they would be paying the duties anyway, there is little to stop them from importing from somewhere like China, where goods can be manufactured at lower prices.
And in some cases, it doesn’t stop there. Certain providers pitch in to help out with getting your package through customs – because if you haven’t paid your import duties, they hold onto the offending parcel – but they charge for the privilege. So on top of that 20%, there’d be a handling fee to deal with. Suddenly those duties that seemed like such small inconvenience have racked up into a hefty bill, not just for those of us who compulsively shop online, but for businesses that may have been established and operating successfully for years.
Even the small conveniences that we don’t pay much attention to, like not having to fill in a customs form, would disappear, and failing to get it filled in just right could lead to serious delays. In fact, you might even end up having your package sent back to you – and paying for the privilege – just because you’d not got your customs paperwork spot on. This is an issue people face when sending to countries like India or Bangladesh.
And though the financial aspects of the UK’s separation with its European fellows can’t possibly be predicted, there are some people who are exceedingly qualified to make a best guess. What they’re suggesting is that, in the best case scenario, the UK’s GDP would drop by about 2.2%. That’s not so bad right? Well, that’s about the same amount of fluctuating that happened back in 2008, when we in the UK had our economic crisis. That’s just the best case scenario too – worst case ideas are more in the 6% region, a number that sounds a whole lot more threatening.
A dip like that would do massive damage to the courier network – as recently as a couple of years ago it still hadn’t recovered back to pre-recession levels. In the 2014 Logistics Dashboard – an analysis of the Logistics network published by PriceWaterhouseCooper – there is are nearly a hundred pages of data that show just how badly the logistics industry was damaged by the events of 2008 and how it’s still recovering.
One of the most interesting things highlighted by that report shows that when the recession hit, the numbers of HGV – heavy goods vehicles – drivers dropped sharply. HGVs are vital to the courier network, as they allow large shipments of items to travel together. A drop in the number of HGV drivers would cause a definite wrinkle in the smooth fabric of the efficient courier network.
That’s just a small example of how the logistics industry would be affected by the economic problems that the Brexit may well pose. There are dozens of other factors that an economic crisis would inflict on the courier network, but the fact that we have only just recovered from the last such drop should make clear how difficult it would be, especially in conjunction with the customs problems that the Brexit would provide.
The politicians and media will spend the next few months arguing over whether or not the benefits might outweigh the risks of a Brexit, but in this regard at least, it seems clear. A Brexit would be problematic for the courier networks that we work with and so, by extension, for those of us who use them. Leaving the European Union would have us dealing with Tax and Duties, Customs forms and a whole host of other minor inconveniences that we take for advantage. Brexit might be a word that rolls off the tongue, but free movement of movement of goods sounds great to us.