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The Road Ahead: The Outlook For The Transport Sector

Published: Wednesday 14th June 2017

Delivery man with a parcel in his van

Three million of the transport, logistics and driving sectors jobs are directly linked with trading with the EU. With the potential for major changes in legislative and employment frameworks brought about by Brexit, the industry is heading into a perfect storm. Recruitment shortages, border controls impacting on movement of labour and goods coupled with a shift toward alternative methods of moving goods from further-flung markets signals significant changes in the industry.

The transport and driving industry is the third largest employer in the UK and any consequences of Brexit will in turn, affect our economy as a whole. In this article we look at some of the potential areas which may be impacted.

Changes in Legislation

“EU regulations in the transport, logistics and distribution sector covers a huge variety of issues, including the condition of vehicles, additional ‘blind spot’ rear view mirrors, warehousing and the training, health and safety of drivers. The UK-based sector would like to see some EU rules dropped but the regulations governing logistics operations are widely accepted by the industry.”

From March 2019, The Great Repeal Act will come into force. From that point on, Government will choose what part of previous EU law or directives will be retained, and which will change.

The complexity of the situation is shown by how unsure we are about how many aspects of our laws are EU-related: figures range from 18,000 EU legislative acts to 80,000.

There could well be changes to the legislation on aspects of employment for those working in the transport industry. The EU laws which apply to the sector – such as driving license laws, hours and qualifications – may well be modified. It may be that having greater control over legislation will be more beneficial for employee relations in the long term. For instance, providing an easier way for drivers to become PCV trained, which could in fact, make recruitment easier in these industries.
This presents a great opportunity to change the laws relating to transport and employment laws within the sector; it could be an opportunity to rejuvenate or modernize the industry by for example offering better terms to attract new recruits and improving training and development opportunities.
There’s no doubt pressure groups or lobbyists will already be mobilizing especially since many legislative changes will be done by ministers rather than parliament. These delegated powers will not be subject to parliamentary scrutiny and do present a rare chance to influence sublte or indeed major policy shifts .

Employment

Broadly speaking, a recent study showed that 25-36% of working in the processing operatives (transport) sector were foreign-born

The free movement of labour between the UK and EU is one of the major concerns faced by the industry following Brexit. There are already severe staff shortages and with changes to free movement causing tighter restrictions on EU citizens entering the UK, these shortages could be amplified. It is a challenge for both recruiters and the industry, but not necessarily an impossible obstacle to overcome. Government schemes such as Trailblazing Apprenticeships can be big drivers of employment since they act as a way to boost employment by ensuring new drivers earn while they qualify.

Cost of Doing Business

Again, we are heading into the great unknown, and cost of doing business, always at the mercy of changing oil prices now has to contend with far more variables.

Not least, there’s the possible sea change in trading partners, tariffs and duties, and customs clearances & procedures. Changes to the latter for example would impose major overheads and workload on logistics businesses trading with the rest of the EU. Almost half of the UK’s trade is with the EU, so any additional costs would significantly affect trading costs for businesses.

A weakened pound could also drive fuel costs up, which in turn, would have a significant impact on businesses where fuel is one of the main expenditures. Any potential increases in costs, could cause recruitment freezes or reductions.

And with the possibility of increased border controls, this could cause costs to spiral, which would further affect businesses and their ability to invest in talent.

What steps can employers and recruiters take now?

Regardless of the changes, it is important for both recruiters and employers to be prepared and be flexible.
Changes may actually work in the sector’s favour. Brexit may actually provide recruiters and businesses with an opportunity to improve recruitment strategies and employment opportunities in the industry. Whatever the implications of Brexit in this industry, it is important for the recruiters and businesses to be as prepared as possible for all eventualities and ensure strategies are put in place to cope with any negative outcome.

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