Brexit Impacts on the UK Economy

This assignment delves into the multifaceted consequences of Brexit on the United Kingdom's economy. It examines the effects of Brexit on various sectors, including trade, finance, and immigration. The analysis also considers the impact on subjective well-being and explores potential opportunities and risks associated with Brexit. A range of academic sources, reports, and studies are cited to support the arguments presented.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE
UNITED KINGDOM
By
ASSET TILEUOV ID:16443083
Supervised by
GEOFF ELLIOTT
Course
MSc International Logistics
30th January 2018

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Acknowledgement
The completion of this study would have been not possible if not dependent on the steadfast
support and encouragement of my family. They hence paid equal contribution to the study for
which I always feel profound gratitude in my heart.
I would like to express here the very thanks to my dissertation advisor, Prof. GEOFF ELLIOTT,
who provided me the opportunity to do such a research, ushered me in to the discipline of
………………………., and instructed me whenever required.
I also owe my special thanks to ………………………. for sharing his experimental experiences
at the beginning of the research.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Abstract
This paper has been constructed in order to have an idea about the unforeseen impact of Brexit
on the future of logistics in United Kingdom. The country leaving Brexit can have effects on
various segments and therefore this paper has been constructed in order to have an idea about the
processes that have been used in order to attain the effective results and the variables associated
with the process that have been explained by previous researchers. The process of data collection
and the kind of data that would be used in order to gain the suitable results is even explained in
this paper. Hence, the assessment of the thesis paper would be useful for the determination of the
actual results and would be able to determine the unforeseen effects of Brexit in the logistics in
the United Kingdom.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Table of Contents
Acknowledgement...........................................................................................................................2
Abstract............................................................................................................................................3
Chapter 1: Introduction....................................................................................................................7
1.1 Introduction............................................................................................................................7
1.2Background of the Research:..................................................................................................7
1.3 Brexit as a wicked problem...................................................................................................8
1.3Aims and Objectives of the Research:....................................................................................9
1.4 Research questions:.............................................................................................................10
1.5 Rationale of the Study.........................................................................................................10
1.6 Thesis structure....................................................................................................................11
Figure 1: Dissertation Structure.................................................................................................12
Chapter 2: Literature Review.........................................................................................................13
2.1 Introduction..........................................................................................................................13
2.2 The European Union............................................................................................................13
2.3 Theories explaining EU integration.....................................................................................15
2.3.1 Intergovernmentalism theory........................................................................................15
2.3.2 Neoliberalism................................................................................................................16
2.4 Benefits of belonging to EU................................................................................................17
2.5 Guidelines for withdrawing from EU..................................................................................18
2.6 EU-UK Relations.................................................................................................................19
2.7 Britain’s EU policy..............................................................................................................20
2.8 Issues with EU Membership................................................................................................21
2.8.1 EU Budget....................................................................................................................21

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
2.8.2 Common Agricultural Policy........................................................................................22
2.8.3 Common Fishing Policy...............................................................................................22
2.9 The ‘Brexit’ Process............................................................................................................23
2.10 UK logistics.......................................................................................................................25
2.11 Conclusion.........................................................................................................................28
Chapter 3: Research Methodology................................................................................................29
3.1 Introduction..........................................................................................................................29
3.2 Research Design..................................................................................................................29
3.3 Research Philosophy............................................................................................................31
3.4 Research Approach..............................................................................................................32
3.5 Data Collection Procedure...................................................................................................34
3.6 Data sources.........................................................................................................................34
3.7 Data Analysis Techniques...................................................................................................35
3.8 Ethical considerations..........................................................................................................37
3.9 Limitations of the research..................................................................................................37
3.10 Timeline for the research...................................................................................................37
Chapter 4: Data analysis and findings...........................................................................................40
4.1 Introduction..........................................................................................................................40
4.2 Implications of Brexit for the UK........................................................................................40
4.3 Potential Brexit effect on Supply Chain..............................................................................42
4.3.3 U.K. Labour Market.....................................................................................................44
4.3.4 Supply Chain Delay......................................................................................................44
4.3.5 Taxes.............................................................................................................................45
4.4 The impact on Imports and Exports.....................................................................................45
4.5 The continuing Driver Shortage..........................................................................................47

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
4.6 Overall Impact.....................................................................................................................49
4.6.1 Impact of Brexit on Aviation........................................................................................49
4.6.2 Impact of Brexit on Shipping Companies....................................................................50
4.6.3 Impact of Brexit on Rail and Bus.................................................................................50
Chapter 5: Conclusion and Recommendations..............................................................................53
5.1 Introduction..........................................................................................................................53
5.2 Linking with objectives.......................................................................................................53
5.3 Recommendations................................................................................................................55
5.4 Future Scope........................................................................................................................57
References......................................................................................................................................58

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Chapter 1: Introduction
1.1 Introduction
The decision of Britain to exit from European Union (EU) is commonly referred to as
Brexit. Subsequent to the decision of Britain to exit from European Union, numerous studies,
Professional research institutes as well as individuals have stated that the movement will have a
direct impact on the trading and logistic sectors. The actual impact cannot be estimated right
now, as it will take some time for the consequences to happen in a large scale. It is though
expected that Brexit will results in lower trade opportunities between Britain and EU. The
research will specifically focus on the influence of the Brexit on the logistic industries in a
detailed manner.
Having looked at the benefits that member states derive from being in EU, the driving
forces of Brexit, the laid down structure for this process and projected impacts, there remains a
void that is yet to be filled. So far, the literature is working on predictions of what would be if the
UK voted to leave the union and there were no certainties. This work will look at the effects of
Brexit on UKLogistics. Because all the sectors of Britain’s economy are interconnected, a
change in one will affect the other sectors.The trade, FDI, financial markets and immigration
sectors will all impact on Logistics. Though a two year window period has been given for
negotiations and Britain is still considered a member of the EU, its clear intention to leave has
created ripples and this paper will tackle that.
1.2Background of the Research:
For the first time in the history of the European Union (EU), the exit of a member country
from the association has made a serious impact on the EU as well as on the global market too.
The trade and logistic channels in UK is expected to be largely affected by the movement.
Britain, like most of the countries that comes under EU, has economy that is primarily service-
based in nature. Due to this, they largely depends on natural resources that is imported from
other countries. Moreover if Britain fails to remain part of the single market following the exit,
tariffs will be imposed on the import of goods from other EU associated countries. The direct
consequences will be that goods will become more expensive. Several other issues that is

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
directly linked with the movement is new rules regarding foreign exchange policies , trade tax,
labour market policies, supply chain management that might prove to be barrier for the logistics
business.
Brexit has been talked about for years now and speculations about the future were
rampant. This study is conducted at a time when Brexit is no longer a possibility but a reality and
a year down the line, substantial effects have been felt. The information that will be synthesized
from this work will guide businesses on the strategies they will employ based on the market
conditions and will also direct the UK government on the regulations and models to be adopted
to cushion the UK citizens from the likely negative effect.
1.3 Brexit as a wicked problem
Chang (2017) among other scholars have highlighted the main reasons that prompted
UK’s decision to opt out of the EU. Among them is the immigration issue which the Britons saw
as a threat to their employment and a concern to the national security. Economic reasons
included high membership fees to the Union and differing opinions on the integration where UK
expected economic streamlining while the rest of EU was highly bent on a closer relationship at
social, political and economic spheres and subsequently heavy regulation. The loss of
sovereignty has also been raised severally especially with many decisions supposed to be lying
with the parliament being transferred to the EU leaving Britain without control (Chang 2017, p.
4; di Diyana and Innes 2017, p. 29). The older generation have also wished to reclaim their
English nationalism rather than categorize themselves as Europeans like the EU has made them
do (Corbett 2016, pp 6-10).
Because of the divided views on immigration di Diyana and Innes (2017) describes it as
a wicked problem. There are those who prefer the borders to be totally closed yet there are those
who view this opinion as completely racist. Such an issue with no clear solution is termed as a
wicked problem. There are also varying opinions on the impacts of immigration as presented by
different institutions such as the government, private researches, media agencies and the
public(di Diyana and Innes 2017, p. 29-31). Similarly, when all these issues that triggered Brexit
are put together, then the withdrawal from the EU also presents as a wicked problem as it is
networked into several other issues and this will result in a chain of aftermaths if any solution is

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
attempted. Rittel and Webber (1973) explain that governmental policy planning is as problematic
as they have no clear definition nor solution and thus the only remedy is resolution. This does not
necessarily solve the issue but creates more problems that will need to be resolved over and over
again (Rittel and Webber, 1973, pp. 160-164; Chapman 2004, p. 23). For Brexit, di Diyana and
Innes (2017)indicate that the lack of information on policing during the referendum will create
problems for UK not only for tackling immigration but also the other issues (p. 32).
They describe the characteristics of the wicked problems and from this, Brexit qualifies
as one. For starters, the leave vote was not unanimous as half the UK population voted to remain.
Each side had its own argument supporting their position and this illustrates that the views of
either position can be judged as true or false. Wicked problems such as Brexit can be claimed to
be good or bad based on one’s views (Rittel and Webber 1973, pp 162-163). Brexit also opens
up a series of actions to be taken meaning that there is no stopping. If a closer relationship is
established as an alternative then UK and EU have to undergo negotiations and renegotiations
and even compromising at some point. If UK opts for the WTO model, it will enter into a phase
of policy implementation which does not always work out right. Conditions in the environment,
naivety of the policy or just abrupt circumstances will create situations which cannot be undone.
Only resolving will work but this is also consequential creating a vicious cycle (Rittel and
Webber 1973, p. 162). These repercussions demonstrate that there is no defined solution for a
wicked problem. Again, the number of possible solutions to a wicked problem cannot be reached
as thinking and reasoning is not always exhaustive. Another issue lies in the fact that the
solutions identified cannot be applied concurrently and thus their worth cannot be fully
enumerated (Rittel and Webber 1973, p. 164).
1.3Aims and Objectives of the Research:
The aim of this research to identify the impact of Brexit on the logistic industries in UK.
Objectives of the research are
 To present the current situation of logistic industries in UK
 To analyse the reasons for Britain to opt for Brexit.
 To review factors like Tariffs, Foreign Exchange, UK Labor Market, Supply Chain
Delay, Taxes to determine the future performance of the industry.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
1.4 Research questions:
The following are the research questions of this proposal:
1. What were the existing laws applicable in the logistic industries before Brexit?
2. What are the similarities and dissimilarities of the laws for pre and post Brexit?
3. What are the new threats and opportunities logistic industries might have after the Brexit?
1.5 Rationale of the Study
The research deals with the impact of Brexit on the logistic market in UK. British voters
decided to leave the EU by giving their opinion in favor of Brexit in the referendum that took
place on June 23, 2016.
Britain departure leaves a significant impact on EU which is the association of
28countries. It is expected that that UK will be able to finally leave the association by March 31,
2019. Britain, for being the 5th largest economy in the world, can directly influence the
performance of the EU in maintaining good economy in the other associated countries. The
business in the Britain will also be largely affected by the decision. The transport and logistics
industries are the field where the effects are expected to large in terms of economic and social
values.
Britain follows mainly serviced based economy and they heavily rely on the natural
resources that are imported from other countries that comes under EU. Following the exit, tax
will be imposed on the imported goods and it will increase the cost by a great amount. This will
make logistic services more expensive and reduce the efficiency of the industry to some extent.
At the time when Britain was part of EU, it could hire transport driver from other associated
countries without any issues. Following the exit, it will be difficult for them to follow the same
trend which will surely make the logistics operations less efficient.
Some industry leaders are though optimistic about the Brixit to be effective for the UK logistic
market as it can give rise to alternative fuel market and it will draw large investment in R&D to
produce more commercial vehicles that does not operate on traditional fuel resources. As a
result new research opportunities will be open in the sector and it will by large help the logistic
business to be much more cost effective which will help to reduce the cost hike due to high tax

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
on the imported goods. To see the actual impact it will though take some time as the result will
not happen so quickly considering the recent global economy and its effect on UK business
sector right now.
1.6 Thesis structure
Chapter 1 Introduction
The section highlights the research aim and objectives with brief introduction of the topic
being discussed.
Chapter 2 Literature review
In this chapter, in depth study of the topic is provided. For this , various concepts, models
and theories related to this research have been studied and analyzed thoroughly
Chapter 3 Research Methodology
In this chapter , the research methods and approach that has been followed to carry out
the research has been discussed. The data collection and sampling method are also discussed in
this chapter.
Chapter 4 Presentation of data
Here in this section, obtained research data in the form of tables and charts has been
provided to give a clear understanding of the collected facts.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Figure 1: Dissertation Structure
Source: Created by the Author
Chapter 5 Analysis and interpretation
In this chapter ,the data has been analysed properly to get the insights from the collected
data to make the research effective and successful.
Chapter 6 Conclusion and Recommendations
In this chapter, an overall conclusion will be drawn based various findings followed by
certain recommendations with reference to the findings.
Chapter1IntroductionChapter2LiteraturereviewChapter3ResearchMethodologyChapter4Chapter5Chapter6

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Chapter 2: Literature Review
2.1 Introduction
This section of the paper is the review of literature that provides information in relation to
the various suggestions and the recommendations that have been given by various former
researchers on similar topics. The assessment of the previous research papers asserted by the
other researchers will be an influential factor that would be helpful for the current researcher to
undertake this paper in an effective manner. The aspects that have been discussed in this paper
have been possible by assessing the earlier research papers and what the other researchers have
suggested so that these kinds of information can be used for the purpose of undertaking data
analysis for this paper and attaining the results that is demanded in this paper in accordance to
this topic.
2.2 The European Union
The call for a United Europe after the Second World War resulted in the birth of
organizations that attempted to unify Europe. This was first proposed by Winston Churchill in
1946. EU came about as a partnership that was seeking to cooperate in the Iron and steel market.
Six nations were the first members though France and Germany were the most influential
(Hermann 2007, p. 9; Perisic 2010, p. 1; Besslich 2013, p. 9; Archick 2017, p. 5). This
collaboration aimed at restoring peace and also to catalyze the economic recovery of the Europe.
Its formation was strategic in that willing states would join, share their sovereignty, creating
interdependence and in turn minimizing the chances of an intra-European war in the future. The
shared areas included extraction of coal and manufacture of steel, nuclear power production and
trade (Archick 2017, p. 1). This integration continued to grow and currently, the EU is a
partnership that influences and caters for the economic and political interests of its twenty-eight
member states.
EU has established the Single Market which is the largest globally and allows for the free
movement of commodities inclusive of services, people and capital. Also common in member
states is the trade, agricultural and certain environmental and social policies. Though the twenty-
eight countries did not ascend to the proposition of the Euro as a common currency, the majority

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
agreed and this currency took effect in nineteen states. On the political front, the Schengen area
was introduced with the involvement of twenty-two states in which interstate movement does not
require possession of a passport or complex legal procedures. A Common Foreign and Security
Policy (CFSP) and collaboration in the Justice and Home Affairs (JHA) have also been in the
works since the 90’s (Archick 2017, p. 1).
Pillar One policies which encompass social and agricultural affairs are formulated and
agreed upon through majority voting. CFSP falls into pillar two whose decisions require a unison
agreement from all the member states. The JHA policies (pillar three) also followed this but the
2009 Lisbon treaty allowed for majority voting. The EU is governed by institutions that try to
find a common ground between the national governments and supranationality of the integration.
They are:
• European Commission
• Council of Ministers
• European Parliament
• European Council
The Commission is EU’s executive and ensures that its interests are upheld through the
implementation of decisions and policies. It also supervises treaties to ensure the provisions are
followed in precision. This institution represents the union in negotiations with non-EU states.
Each member state appoints a commissioner who is then endorsed by the European Parliament.
The commissioners settle for a president and the others head various dockets such as trade or
agriculture etc. (Archick 2017, p. 2).
The Council of Ministers also referred to as the Council of the EU represents the
governments of the member states. It enacts laws based on the proposals from the Commission
that have been accepted by the Parliament. The council organizes and holds meetings; depending
on the issues at hand, relevant ministers from the different countries attend and participate for
instance agricultural issues are dealt with by the ministers of agriculture while foreign ministers
dwell on issues of outside countries. Majority voting and unanimity are used to make decisions
depending on the sensitivity and impacts of matters. A leader appointed to lead the council holds

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
power for six months and during this time, her/his country sets the agendas of the council based
on priority (Archick 2017, p. 2).
The European Council is composed of heads of states who appoint a president of the
commission from among themselves. This commission organizes the processes of EU policy
formulation while the president seeks consensus from member states also organizes the work of
the Council (Archick 2017, p. 1).
The Parliament consists of 751 citizens from the EU countries elected for five-year terms.
The number of parliamentarians per country is relative to its population size. They make joint
decisions with other institutions such as allocating EU budget; it can also amend, accept or reject
legislation made by the council of ministers (Archick 2017, p. 2).
2.3 Theories explaining EU integration
Integration of the EU can be contextualized through intergovernmentalism and
neoliberalism theories. How Brexit will disrupt the functioning of EU as put by these theories
will be explained.
2.3.1 Intergovernmentalism theory
Intergovernmentalism theory addresses the nature of EU integration. This theory gives
much importance to the role of the state courtesy of their national governments. It continues to
extrapolate that the position and the influence of these nations in the global field is also
important. As such, when countries come together with aim of being unified such as in the EU,
the integration occurs in a series of steps where the pace and the depth of unification is decided
by the governments of the member states. As these countries intend to protect and promote their
national interests, they will support decisions that are in sync with these interests. The same
motive drives them to join organizations that will assist them in achieving the same (Vasbo 2015,
p. 7). Once in such an organization like the EU, countries have to abide by the terms and
conditions which give power to the organization. This kind of restrains the position of national
governments and limits the competitive advantage they could have over other member states
(Bergmann and Niemann 2013, p. 9; Coskun 2015, p. 392).

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
This theory thus supports the notion that integration occurs where national interests
coincide with what an organization is offering. For the UK, its entry into the then EEC was to
increase its trading opportunities by gaining access to new markets at reduced costs of operation.
This would allow economic growth and improve its deteriorating conditions. States will also use
their differences to try and exert some advantage, for instance, the EU had advocated for the use
of the euro as a common currency for Europe, however, some countries such as the UK objected
to it. Though the UK was still a member, other non-Euro countries had trade agreements with EU
but were not necessarily bonafide members. This difference may be used by the euro countries to
gain advantage over the non-Euro countries (Bergmann and Niemann 2013, p. 7; Coskun 2015,
p. 388).
What is ignored is that these institutions hold this power because their member states
allow them to (Perisic 2010, p. 2). If they decided to walk away, then there will be no subjects to
exercise power over. Walk out is usually reached at when the ruling parties of respective nations
evaluate the implications of membership on their economies and political influence. The same
concern has been voiced following the Brexit. Researchers have predicted that this move by
Britain may trigger similar exits from other nations which are no longer comfortable being in the
EU. When this occurs, then EU will no longer be influential and may also disintegrate. The
single market it established is also likely to destabilize and their financial position as the largest
single market taken over by others (Vasbo 2015, p. 7)
2.3.2 Neoliberalism
Economic neoliberalism advocates for minimal governance and instead uses the
indicators of economic efficiency to state their position and make decisions as opposed to
employing ideological reasoning. It works with the assumptions that in a free market, the signals
dictate the market prices. It posits that this kind of information can never be erroneous and thus
markets should use them as cues for balancing the goods and services equilibrium (Vasbo 2015,
p. 8; Browne 2017, p. 95). Governments are seen as disruptors while their ideological reasoning
in making decisions may be faulted by biased expectations. The production efficiency is
determined by the consumption of goods/services by consumers. This theory thus analyses
barriers to trade and their effects on the financial and labor markets. Additionally, this theory
identifies the mechanisms and actors in a market (Vasbo 2015, p. 8). It also explains that actors

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
only work together out of self-interest and in that case, trust cannot be achieved. Membership of
the UK to the EU has been viewed to be out of self-interest on the part of UK as it derived
economic prosperity from it. Cameron has been quoted saying that if membership ceases to
provide prosperity, then there is no need to remain attached. On the other hand, the revolution of
UK from a manufacturing to a nation relying on the service industry during Thatcher’s
governance depicts the self-interests of EU. The Britons especially the older generations saw this
a neoliberal influenced that robbed them of their identity (Browne 2017, pp. 96,102).
2.4 Benefits of belonging to EU
All the member states derive many benefits from belonging to the EU. Citizens of
member states can now live and work within a country of convenience due to the freedom of
movement and protective employment and labor laws. Travelling has also been eased and this
will encourage tourism and also an influx of new businesses which generate revenue for these
countries. EU enforces travelers’ rights by blacklisting all the airlines involved in malpractice,
and calling for compensation if boarding is denied or flight canceled. Costs of trade have
immensely been reduced due to the abolishment of tariffs and other non-tariff benefits. This
increases trade volumes, activities and opportunities. Exports to the EU create a lot of
employment opportunities for citizens of the member countries (Lewis 2016, p. 1).
Through the EU, member states can make convenient trade deals with non-members
something that is more expensive if not possible when doing it as an independent nation. The
agricultural sector is heavily supported by the EU through its funds and grants which transform
agriculture and continues to sustain jobs that are directly or indirectly related to it. FDI’s from
the EU assist members to stabilize their economies and also arraign capital which stimulates
growth. EU protects customer rights and thus consumers in respective countries enjoy high-
quality products and services. A guarantee of two years is given for the products manufactured in
Europe and thus harnesses discipline and transparency amongst manufacturers and sellers.
Coordination of different countries in sharing intelligence and formulating joint strategies to
fight crime protects member states from high scale crimes of terrorism, cybercrime, kidnapping
and human trafficking which could otherwise be difficult if left to individual countries (Lewis
2016, p. 1).

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
2.5 Guidelines for withdrawing from EU
In 2009, EU came up with a legal framework that would guide countries that wished to
exit from this union. The Lisbon Treaty amended the Treaty of European Union (TEU) and
Treaty on the Functioning of the EU (TFEU). These changes were meant to achieve effective
functioning, allow transparency and democracy within the union and also improve EU’s
discharge of duties as a foreign policy actor (Archick 2017, p. 3). Article 50 of the (TEU) calls
upon countries that wish to withdraw to inform the EU. Through its Council, the Union sets out
terms to negotiate with the country about its position and relationship with the EU after
withdrawal with mandate from the European Parliament (European Union 2010, p. 83-44).
Article 218(3) would be used to direct the negotiations after which a final decision will
be taken by the European Council by the order of the majority. Article 218(3) outlines duties that
the European Institutions will undertake following a withdrawal notice. It heaps responsibility of
drafting recommendations for the council after going through the withdrawal notice to the
Foreign Affairs and Security Policy docket of the Union. Based on the recommendations, the
Council authorizes the commencement of negotiations with the withdrawing nation and also
appoints the head to the union’s negotiating team. The increased powers of the European
Parliament and the authorization of the majority voting system were introduced and clarified by
the Lisbon Treaty (Archick 2017, p. 3). During this deliberation period, such a country is not
allowed to take decisions or participate in the EU Council but is required to continue honoring its
existing agreements and treaties with the EU (Besslich 2013, p. 5).
Withdrawal negotiations usually touch on the resultant financial, budgetary, commercial,
legal and political implications and obligations a country will have to contend with. Since these
issues are complex and crucial, following how elaborate EU integration is intertwined into a
country’s economic, legal and political spheres, agreements may take a long time. However, if
after two years there is no tangible agreement, then the country officially ceases to be an EU
member state and EU treaties no longer apply to it (Besslich 2013, p. 15; Irwin 2015, p. 7;
Dhingra et al. 2016, p.1). There is also a possibility of extending the negotiation time if within
two years scattered agreements, not yet comprehensive are in sight (Besslich 2013, p. 5; Archick
2017, p. 3). The two years introduce a transition period for the sectors affected to adapt. This is
especially critical where EU policies are superior and where there was shared responsibility in

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
policy formation and enforcement since departing from the EU results into policy void. Most
affected policies involve those of free movement of capital, people, goods and employment
policies that always followed EU requirements (Besslich 2013, p. 6).
2.6 EU-UK Relations
UK’s relationship with EU has not been smooth. Right from the beginning, joining the
EU was a trade agreement between these two entities but once in place, UK started losing its
sovereignty to which it took very negatively (Bojana 2010, p. 9; Besslich 2013, p. 9). Its concept
of partnership was an intergovernmental collaboration rather than political integration where the
EU would interfere with the supremacy of the British political structures (Bojana, 2010, p. 6;
Besslich 2013, p. 5). Nevertheless, it continues as a member of the EU for convenience but is the
only country that has openly expressed its disdain and wish for an alternative relationship with
the EU. This can therefore, outline the relationship between EU and UK into three phases:
The first phase is the catch-upstage and was in place from its inception to the EU through
to the end of Margaret Thatcher’s tenure. This period saw the EU assist UK recover
economically. The then PM Margaret Thatcher also implemented policies that gave Great Britain
access to the North Sea’s oil resources. Discontent with some EU policies in the late 1980’s
started encouraging the possibility of a walk out (Besslich, 2013, p. 10; Corbett, 2016, p. 4).
The second phase termed as the Crop out also saw Margaret Thatcher reaffirm Britain’s
position as an equal to the EU and hence its position in this union had to be renegotiated. She
successfully won a rebate for the Common Agricultural Policy. She also downplayed the
reasoning that UK needed to desperately remain within the EU for economic reasons stating that
her country could still manage on its own. She proved this by bringing down the inflation rate to
4.9%, the lowest reached in more than a decade (Besslich 2013, pp 10-11; Vasbo 2015, p. 10,
Corbett 2016, p. 4). Though she was in favor of a single market, she did not agree with further
integration and introduction of a common currency which EU was advocating for. Her wish was
defeated by a majority win which forced the UK into more involvement with the rest of Europe.
In 1992, John Major as UK PM enabled Britain to opt-out of the European Monetary Union and
social policy of the Maastricht Treaty(Bojana 2010, p. 7; Vasbo 2015, p 13-14). The leadership
of the Labor party since 1997 saw them try to involve UK more into the EU through the signing

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
of social policy by Tony Blair and a call for a referendum to use the Euro rather than the pound.
This good image fell apart after the 9/11 when Britain stood in solidarity with the USA; EU has
always taken a parallel side where the USA is concerned (Perisic 2010, p. 8).
The Crop out phase is the stage that extensively ushered the Brexit call. Britain
deliberately kept off from the EU issues and this also changed the attitude of the UK public in
which they saw EU as the enemy (Bojana 2010, p. 6). The economic crisis of 2008 further
distances UK from EU as it called for more integration of the Eurozone countries leaving out the
UK and further highlights Britain’s refusal to use the common currency. In the same line, the
Fiscal Treaty was activated discriminating the UK. This has made the calls for a referendum in
the UK very obvious and in 2010; open campaigns for an exit began. Though Britain
acknowledges the benefit of working with EU, this phase saw strong propositions on revising its
membership terms (Besslich 2013, p. 11).
2.7 Britain’s EU policy
UK’s policy to the EU has always differed based on the political party that forms the
government which alternates between the Labor, Liberal Democrats and Conservative party
(Besslich 2013, p. 12). Though Britain retains its awkward position in the EU, the Eurosceptic
notion has always remained the only difference is the intensity. It has always been against
policies that require further integration into the EU while at the same time supporting those that
would boost its economy. Ideally, it supports policies that do not compromise its
sovereignty(Corbett 2016, pp. 5-6).
The Liberal Democrats and the Labor party have been more Europe-oriented.This has
been demonstrated in the leadership of Tony Blair and Gordon Brown.The Conservatives have
openly undermined the EU-UK linkage. When the Conservative party was in office between1979
and 1997, isolation from the EU was apparent (Perisic 2010, pp. 8-9). The pro-Europeanism
approach that is supported by Britain is cooperation on the economic front benefitting from the
single market and even enlarging it as opposed to the rest of Europe’s perspective which sees EU
as a wing that will foster political and economic integration to a level of developing a federal
Europe similar to the USA. This policy can therefore be termed as a cautiously supportive with
stints of awkward and rebellious position (Besslich 2013, p. 13).

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Britain has managed to explore its global objectives independently without relying so
much on the EU, however, it is still dependent on certain areas yet it does not agree with the
terms EU has imposed. These areas include the EU budget and financial regulation. Under
Cameron’s lead, commitments to the EU would be agreed upon by the citizens through a
referendum so as to ensure that sovereignty is not diluted. The European Act 2011 achieved this
(Besslich 2013, p. 13).
Theresa May, the current PM has been quite vocal about the ties between her country and
EU. She states that Brexit clearly means the British are out but since they will still be in Europe,
she recognizes that many EU regulations would still affect them. For this reason, she says that
they have to find a way to relate amicably (Besslich 2013, p. 12). Following her rhetoric,
scholars predict a ‘hard’ Brexit (Ottaviano et al. 2014, p. 4; Duff 2017, p. 1).
2.8 Issues with EU Membership
2.8.1 EU Budget
EU activities are funded by contributions by member states. Contributions are allocated
based on calculations of tax and the Gross National Income (GNI). Currently, 1% of member
states’ VAT along with 1.27% of the GNI, agricultural levies and custom duties are channeled to
the EU budget (Besslich 2013, p. 30). UK’s contribution amount to £ 14bilion annually but this
fluctuates with reforms and other negotiations. In 2013, 0.7% of Britain’s GDP translating to £
10 billion benefitted the EU. For pretty much of its duration in the EU, UK has been a net
contributor where its contribution exceeds the returns. The EU has given room for rebates or
contribution renegotiations where two-thirds of the difference between the input and output is
refunded back to a nation. In 1984, PM Margaret Thatcher secured a rebate for UK following
long periods of more input and less gain (Perisic 2010, p. 7). This did not change the trend
though because still in 2011, it gave 13.8 billion euros while only receiving 6.5 billion Euros.
The Brexit talks may have stemmed from these imbalances (Besslich 2013, p. 31).
Brexit disentangles UK from contributions to the EU budget and saves up a chunk of UK
revenues which could be channeled to other investments while at the same time giving her the
freedom to decide which EU programs it would like to participate in; resembling the special
relationship between EU and countries like Norway and Switzerland. This would be more

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
fulfilling when compared to the current situation where most of its contributions fund the CAP
from which it gets peanuts in return (Besslich 2013, p. 34; Van Reenen, 2016, p. 371).
2.8.2 Common Agricultural Policy
This policy came into being in the 1950’s with an aim of allowing free movement of
agricultural goods. The agricultural sector was boosted through the issuance of subsidies which
allowed farmers to produce throughout, shielding the agricultural products from unstable market
prices when the market was unfavorable(Besslich 2013, p. 32). An excess of products finally
caught up with the market in the 80’s leading to reforms in this policy which saw farmers being
rewarded for using environmentally sustainable methods. Payment was no longer made based on
the quantity of production rather on the acreage a farmer has, to prevent excesses in the market,
assisting farmers and boosting the agricultural sector. 40% of the EU budget goes to sustaining
this policy and this has been met with a lot of outcry from UK as they see managing agriculture
at a national level will enable farmers to strategize and be innovative for survival during
unfavorableconditions. Britain sees this policy as favoring France as its agricultural sector is
inefficient (Besslich 2013, p. 32). UK farmers in 2013 received 7% of the £49 Billion allocated
for the CAP.UK had proposed to EU to reduce its CAP rebates which Margaret Thatcher
successfully did in her time. Now the British want out on this policy as they argue that it will
make them flexible and open to other fair priced trade deals with the WTO and non-EU
countries. It is also seeking to adopt policies that will make farmers be prepared (market
oriented) without depending on subsidies contrary to what CAP does (Perisic 2010, p. 7;
Besslich 2013, p. 33). Agricultural deals outside EU will also benefit consumers who will
purchase products at more flexible and lower prices.
2.8.3 Common Fishing Policy
This is yet another policy that is controversial. As the UK was not among the founder
members of the EU, it had to adhere to the policies already laid down. This included the sharing
of its fishing ground which so far has damaging effects. CFP had considered the mobile nature of
water resources and therefore set out to protect Europe’s local fishing grounds.UK accesses
fishing grounds of four states while five have access to hers as recommended by the policy
(Besslich 2013, p. 33). So far, this policy is not seen as advantageous as it has failed massively in
developing a sustainable fishing industry, controlling fish stocks and reforming this industry.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Member states have continued fulfilling their short term requirements leading to bad fishing
practices. Reforms to the CFP could revamp the fishing sector but so far none have been made.
Because of CFP’s failure, leaving the EU will be quite beneficial as the country will now
manage its fisheries at a national level which is likely to be more effective. It would establish its
own rules without the need to negotiate with other entities. Overuse of the water resources would
have been eliminated as other countries will automatically be barred from exploiting the fisheries
within the national boundaries of UK, raising the revenue acquired from it to an annual
£2.5billion.The UK will also have to collaborate with its neighbors to ensure the fishing culture
is sustainable economically, socially and environmentally (Besslich 2013, p. 34; Chang 2017, p.
15). Sole ownership of this resource will also allow Britain to partner with others pertaining the
sharing of overlapping fish stock.
Despite the anticipated negative effects that may result from a Brexit, Britain still retains
that like the CAP, the CFP is also hurting its economy. Its share toward the EU budget to sustain
the policy is way too high than the returns it gets from being covered by the policy. The CFP also
gives EU control of close to 70% of UK’s rich waters and the latter would like to regain control
and management rights (Besslich 2013, p. 34).
2.9 The ‘Brexit’ Process
The Brexit talks became official in 2013 when David Cameron, the then Prime Minister,
committed the Conservative party to delivering the referendum in his Bloomberg speech
(Dhingra et al. 2016, p. 1). Debate had been all high with the opposition, UK Independent Party
(UKIP) pushing for exit from the EU, citing prolonged disappointments by this union. Their
position was that the United Kingdom was better off without the EU since affiliation with this
union was damaging (Besslich 2013, p.1; van Bruggen 2016, p. 2).
In May 2015, the Queen of Great Britain read a statement on behalf of the government in
which the referendum date for the Britons to decide whether to remain or opt out of the EU had
been settled for the 23 June 2016. On the specified date, 51.9% voted for ‘Brexit’ in the
referendum giving UK the freedom to walk out of EU (Black et al. 2017, p. 15). Cameron
resigned as the victory of the ‘leave’ vote was seen as a failure, since his party was for the
‘remain’ option and Theresa May took over from him(Ottaviano et al., 2014, p. 2).

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Figure 1: National results on UK referendum on ‘Brexit’(Black et al. 2017, p. 15)
This supported Besslich (2013, p. 1) prediction as guided by the opinion polls. The voting
statistics indicated that close to 13 million voters who were registered did not exercise this right
on the referendum while another seven million eligible persons were not registered and hence
could not vote. The unregistered persons were profiled as the young, ethnic minority groups, and
those who recently moved to the UK (Dorling 2016, p. 1). The middle class was thought to have
massively swayed the outcome which approved Brexit as they composed two-thirds of the voting
population. Dorling(2016, p. 1) categorizes them intoA, B and C1 classes and adds that they
made up 59% of those who approved Brexit. 24% of those who voted to leave were of class D
and E, the lowest socioeconomic classes whose literacy levels and comprehension ofeconomic,
political and social implications of Brexit is poor. This is so because UK has always kept
association with EU as an economic partnership rather than integrating it into its sociopolitical
system (Browne 2017, p. 91).
Regionally, England and Wales voted to leave EU while Northern Ireland and Scotland
opted to stay. Only London in England voted to remain. The younger population (<50 years) had
voted to remain in the EU but their numbers were not high enough to overtake the older
generation whose turnout was 85% out of which 65% voted to leave (Dorling 2016, p. 1; Black
et al.2017, p. 18; Browne 2017, pp. 90,104; di Diyana and Innes, 2017, p. 24).Van Reenen
(2016) also adds that the British focused on non economic benefits of the exit such as regaining
sovereignty and reducing immigration rates even though they were fully aware of the economic
costs (p. 378). The formal notice of UK’s intention was then served to the EU by British’s

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Ambassador to EU, Tim Barrow on behalf of Theresa May (Geopolitical Futures 2017, p. 4).
This makes UK the first country to exit the political and trade union (Vasbo 2015, p. 14).
The Brexit win put UK at a new position with respect to economic governance,
sovereignty, competitiveness and social benefits (Frontier Economics 2016, p. 17). In the realm
of economic governance, the UK being a non-Euro should not suffer unfounded obstacles while
trading in the euro area. As a non-Euro, UK is not expected to directly contribute to the stability
of the euro during crisis. UK’s market and financial institutions will not be subject to regulation
or supervision by the EU. On competitiveness,UK had to focus on lightening regulation so that
the single markets could be strengthened. On this aspect, small and medium sized enterprises
SMEs would see a relenting of administrative burdens, unnecessary regulation would be
abolished and ambitious policy on trade would be put in place (Kierzenkowski et al. 2016, p. 8).
On sovereignty, it was clear that the UK was no longer politically integrated with the
European Union. Henceforth, the principle of subsidiarity would be upheld so that the interests
of the people are given first priority. On social benefits, UK would put measures that would
restrict immigration into the country to free up the pressure on the public and social services and
also prevent the difficulties that these groups create in the employment market (Dhingra et al.
2016, p. 2; Kierzenkowski et al. 2016, p. 8).
2.10 UK logistics
IMF puts the performance of UK Logistics among the world’s top ten. It is composed
178,295 enterprises serving in the transport, trade and manufacturing industries which contribute
£124Billion GVA to UK’s economy. Logistics draws from all sectors of the economy to ensure
that trade and delivery of goods is possible. All the modes of transport are covered, road, rail sea
and air transport. The manufacturing sector covers a myriad of products ranging from vehicles,
pharmaceuticals and electrical appliances while the trade sector deals with international and
domestic trade. Exports and imports are covered in the former while the latter is made up of
wholesale and retail trade. Many players are thus involved such as freight forwarders, haulers,
freight operators for sea rail and air, retailers, wholesalers and manufacturers of goods (Freight
Transport Association 2017, p. 2). Despite its large size, the quality of infrastructure is still very

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
poor when compared to other EU countries where roads rank it at 27th, rail at 19th, port facilities at
12th and air transport infrastructure at 18th (p. 4).
This sector employs over 2.5 million people which is equivalent to 8% of Britain’s entire
workforce. The numbers have been steadily increasing and statistics indicate that between 2015
and 2016,190,000 new employment opportunities were created. Out of the numerous employees
in the Logistics Sector working in different capacities, 11% are drawn from EU while those from
other regions only make up 3% (Freight Transport Association 2017, p. 82).
Figure 2: Employees in Logistics (Freight Transport Association, 2017, p. 12)
With the Brexit call, policy, operations and planning in the Logistics will be affected and
the new regime will oversee the negotiations between UK and EU. The Freight Transport
Association is the body that will ensure that the interests of UK Logistics are presented to the
government and by extension the EU. It is a trade association that represents 16000 members

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
who either provide or rely on transport within UK and also international to/from Britain to other
destinations (Freight Transport Association 2017, p. 3)
As the Sterling pound’s value continues to fall, the logistics companies will be affected as
the cost of fuel will rise. This will resonate across all businesses and profit margins are expected
to narrow. The price of goods importation will also rise meaning that the consumers will have to
pay more for imported goods. Exports and may cancel out the inflation occasioned by imports
thus restoring the balance of trade (Davies & Robson 2016, p. 1; Freight Transport Association,
2017, p. 35). Car manufacture is also anticipated to decrease by 12% due to trading constraints
(Irwin 2015, p. 12).
Producers will rely on the government to make a very competitive deal that will create a
balance between the expected higher tariffs of trading with and the increased benefits of opening
up to the rest of the world. The time frame for negotiations and the alternative model chosen will
gravely influence the logistics sector. At the end of the negotiation period, players in Logistics
are hoping to continue operating in the EU territory at no additional costs and without the burden
of bureaucracy (Freight Transport Association 2017, p. 7). It has also been estimated that the
European market will be less attractive without the UK and it could take advantage of this by
utilizing the freedom Brexit grants it to launch itself into the rest of world and make lucrative
trade deals (Davies & Robson 2016, p. 1; Startup and Wood 2017, p. 50).
Too much regulation was also among the triggers of Brexit alongside immigration, high
membership Fee and net contribution to the EU. However in the transport industry, not much
will change after Brexit. Transport lawyers explain that EU’S regulation in the logistics and
transport sector aimed at safety and compliance to them was basic. Without EU to regulate, then
Britain will have to adopt policies much similar to EU’s. Its vehicles and trains on international
journeys will have to meet EU standard and the UK government should see to it that delays at the
EU entry points are minimized (border controls). This puts UK at an awkward position, as EU
was responsible for this. UK will thus have to revamp the IT and infrastructure of its customs
department (Davies & Robson 2016, p 1).
Restriction of movement of labor will result in a shortage of personnel to work in the
transport industry. This will be a big blow as EU immigrants bring in specialists such as drivers

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
and also low skilled workers who fill the gap left by UK citizens who are not that flexible. To
cover this hurdle, the transport sector hopes the UK will rejoin EFTA so that only minimal
restriction occurs in which they can still access the single market and free movement of labor
(Davies & Robson, 2016).
2.11 Conclusion
This section of the paper has therefore looked to assess what the other researchers have
suggested in accordance to European Union and the factors that are associated with European
Union. The factors that are associated with European Union and members in relation to the
Union are even explained. The theories that addresses the European Union integration and the
associated theories that is helpful in understanding the integration of European Union. The
advantages and the benefits of belonging to the European Union is even highlighted and the
guidelines and the process that have been used for the purpose of withdrawing from EU is even
highlighted. The relationship among the EU and UK id even explained and policy of Britain in
accordance to EU is even explained. The issues with EU membership and the Brexit process and
the relation of these variables with the UK logistics are addressed and thereby an effective idea
can be attained so that this thesis can move forward.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Chapter 3: Research Methodology
3.1 Introduction
For conducting any research efficiently, it is of utmost importance to design a proper
framework of research, with appropriate methodologies relevant to the context on which the
research is being carried out. The research methodology broadly indicates towards the process of
exploring and analyzing relevant information, in a research framework outlining philosophical as
well as theoretical construct. In this context, this chapter of the paper emphasizes on the
methodological framework, which is implemented for the concerned research, for linking the
theoretical and literary evidences regarding Brexit, and its impacts with the empirical data
collected and analyzed efficiently (Alvessonand Sköldberg2017). The chapter elaborates about
the research methods taken (that is whether they are qualitative, quantitative, or mixed), their
relevance to the concerned research topic, the sampling process and the samples and data
obtained for the purpose of exploration. This section also talks about the research philosophy, the
ethical considerations which have been incorporated and the later section of this chapter shows
the timeline which has been followed for the paper (Lewis2015).
3.2 Research Design
As discussed above, the research design of a project shows the overall strategic
framework which is used for the purpose of efficiently integrating the different components of
the research such that the research problem can be addressed effectively. In general, there are
three types of designs of research which are widely implemented by researchers across the globe.
These are explanatory, descriptive and exploratory research designs (Silverman2016).

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Figure 1: Types of research designs
(Source: As created by the author)
The explanatory design of research mainly deals with the identification of the types of
occurrences and incidents connected to the concerned research topic. On the other hand,
exploratory research design facilitates the accumulation of relevant data and exploration of the
same, thereby trying to find relevance with the concerned problem and establishing the cause and
effect relationship based on the data collected or obtained (Mitchelland Jolley2012). The aim of
exploratory research design is to investigate on the specific aspects of importance for the topic,
thereby helping the researcher to get insights about the problem in concern. Another type of
research design is the descriptive design. This type of research design helps in building the in-
depth knowledge base which is required for the research study and which facilitates in making
the research targeted and insightful, thereby helping in finding efficient solutions to the
concerned problems which are dealt with in the research (Wahyuni2012).
Keeping this into consideration, the concerned research methodology adopts a mixture of
exploratory and descriptive research designs. The descriptive design helps in studying in depth
the evidences present regarding the phenomenon of Brexit, its impacts on the relevant countries,

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
especially UK itself and on the EU and its implications on the different logistic aspects of the
country and other domains of importance, including its trade and financial sector, immigration
and FDI dynamics (Meyers, Gamstand Guarino2016). On the other hand, the exploratory
framework contributes in understanding and designing the outline of the model, which can be
adopted by UK after their withdrawal from the Brexit, to keep their economic prosperity, logistic
stability and welfare of the residents intact and increasing.
3.3 Research Philosophy
The research philosophy, adopted in conducting any research, helps in outlining the belief
about the right way of conducting the different activities under the research methodological
framework. The types of research philosophy, which are broadly in use, are mainly positivism,
realism and interpretivism. The positivism philosophy facilitates those researches, which involve
framing different hypothesis, and then testing of those hypothesis formed to find whether they
are right or wrong (Gray2013). This highly structured philosophy works best where researches
are based on assumptions. The realism philosophy on the other hand, works best where the
research involves the application of quantitative or qualitative research methods, which are in
turn adopted based on the need of the particular research topic and the problems addressed.
However, for those researched which involve strictly qualitative investigations and in-depth
analysis and interpretation of data collected, the interpretivism approach of research philosophy
works most efficiently.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Figure 2: Types of research philosophy implemented
(Source: As created by the author)
Keeping into consideration the nature and benefits of different research philosophies, the
concerned research adopts the interpretivism approach. This is primarily because it works best
for interpreting the expected impacts of the Brexit (if it happens) on the different logistic, socio-
economic, political and overall aspects of not only UK but also on the other countries in the EU,
which are expected to be effected by the same (Knobeand Nichols2013).
3.4 Research Approach
For conducting a research, one particular approach has to be taken among the inductive
and deductive research approaches, both having different features and serving different purposes.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Figure 3: Types of research approach
(Source: As created by the author)
As the “deductive” word suggests, in this types of research approach, the research begins
with several propositions and assumptions of occurrences from which the hypothesis are formed.
These hypothesis are then tested for the relevant situation under consideration of the concerned
research before arriving to the end result, which either confirms or rejects the hypothesis formed,
based on the evidences and data collected and studied (Ormstonet al. 2012). On the other hand,
the inductive approach of research starts with the observation of the phenomenon under
consideration. The evidences and data available are studied and analyzed in this approach and in
the end based on the interpretation of the same; the assertions and theoretical construct for the
concerned problem are formed (Timmermansand Tavory2012).
The concerned research tries to analyze and interpret the probable impacts of the
phenomenon called Brexit, which is still in the pipeline for execution. Therefore, for conducting
the research, it is required to collect the evidences and study them minutely, for the purpose of
interpreting them and making assertions about the plausible impacts of the Brexit on the
concerned participants. For the purpose of doing that efficiently the research adopts the inductive
approach in the theoretical framework. This facilitates in studying the evidences and assertions,

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
which are already present in the aspect of the impacts of Brexit on the UK and on the EU itself,
if it actually happens.
3.5 Data Collection Procedure
For an efficient and productive research, which provides correct and feasible insights of
the phenomenon taken into account, as well as proper recommendations for dealing with the
problems, it is of immense significance to implement robust procedure of data collection. A
faulty and inefficient data collection procedure can compromise the quality and viability of the
results derived in the research, thereby making it faulty and not applicable in real case scenarios
(Englander2012). Keeping this in mind, the data collection process that has been implemented in
the concerned research compromises of methods, which are best applicable for studying the
phenomenon of Brexit. The process has been designed specifically to study and interpret the
reasons behind the proposal of the same, the possible impacts of the phenomenon on the areas of
concern, based on the perception of the scholars as well as on the existing evidences in this
aspect.
3.6 Data sources
In general, data can be collected from two types of sources- primary and secondary. The
primary data collection procedure involves rigorous collection of data by the researcher himself
directly from the relevant parties involves and analysis of the raw data with the help of proper
analyzing tools. Generally primary data are collected through direct interviews, questionnaires
and others. However, while primary data enhances the quality and authenticity of a research, it
also involves higher amount of time and expenses on part of the researcher. On the other hand,
secondary data refers to those evidences, which have been already collected by some other
person or institutions and are obtained from them directly by the researcher for the purpose of
analysis of the concerned problem (Chan, Fungand Chien2013). Secondary data collection
though has higher risk of unbiased data or less authentic analysis, saves time and money and
makes it possible for the researcher to expand his domain of exploration.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Figure 4: Types of Data Sources
(Source: As created by the author)
Keeping the time and cost effectiveness of secondary data types into consideration the
concerned report resorts to secondary data for the purpose of analysis and interpretation of the
implications of the Brexit on the parties involves, including the UK as well as the European
Union. For the purpose of studying about Brexit and exploring its possible effects, the research
uses different secondary sources of data, which includes news articles, reputed journals, online
websites and other literary and empirical evidences, which are present in the government sites.
However, the project, while resorting to secondary sources of data, keeps into account the risks
of non-updated or false information, which can be present, especially in the online platforms and
takes proper precaution to nullify the presence of such biased assertions in the research as far as
possible.
3.7 Data Analysis Techniques
There are broadly two types of techniques for the purpose of data analysis- quantitative
and qualitative analysis. The quantitative analysis techniques mainly involve analysis and
interpretation of the problems concerned, mainly by taking into account the numerical and

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
ordinal aspects of the same. This method helps in analyzing big numerical data, thereby giving
the researcher to widen his scope of exploration.
Figure 5: Types of Data Analysis Techniques
(Source: As created by the author)
However, one of the severe limitations of quantitative analysis is that it highly fails to
incorporate the non-numerical and abstract issues which may have significant implications on the
problems targeted in the research project. In this context, the qualitative process of analyzing
data comes to use. This technique involves in-depth analysis of the ordinal, intricate and detailed
aspects related to the problems, which cannot be taken into account in the former research
technique. This technique becomes especially helpful in those research projects where the result
has to be predicted, based on the events happening in the current period (Fusch and Ness 2015).
Keeping the benefits and the wider abilities of qualitative research and its viability in the
concerned research project, it implements the qualitative research techniques for the purpose of
analysis of evidences and recommendation of models, which can be implemented by the UK for
sustaining and prospering socio-economically. The nature of the qualitative research involved in
this project is mainly narrative and phenomenological as the same narrates and interprets the
information and phenomena whose evidences are existing in the different literary evidences and
news articles regarding this phenomenon. To some extent, case study approach has also

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
implemented to narrate and interpret the different occurrences regarding Brexit and for analyzing
the plausible effects of the same on the areas of concern.
3.8 Ethical considerations
For a research work to be viable and widely acceptable, it is important to consider the
ethical aspects, which come up while conducting the research, and to abide by the ethical norms
and conventions which are internationally present in this aspect. Keeping this into consideration,
the concerned project tries to accommodate all the ethical aspects while carrying out the analysis.
The articles and literally evidences, which have been studied in this aspect, has been
acknowledged along with their source. Also strict vigilance has been maintained in order to
ensure that the secondary data based on which the research has been conducted are obtained
from authentic sources and nobody’s work is plagiarized. The ethical body has been also
informed about the data used prior usage and analysis of the same (Neumanand Robson2014).
3.9 Limitations of the research
The primary limitation of the concerned research is the shortage of time and resources for
which the research had to be based on secondary data sources only. Another drawback of the
research has been the fact that Brexit has not still been implemented and there are still doubts
regarding its implementation, as many have been protesting against it. In the case of nullification
of the pact, the purpose of the research and its findings has the threat to become irrelevant
(Bryman and Bell2015).
3.10 Timeline for the research
The timeline provided below shows the systemic progress of the different activities, by
providing the approximate time that has been taken for conducting the specific activities under
the project:

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Research Activities 0-6
Weeks
6-12
Weeks
12-16
Weeks
16-22
Weeks
22-28
Weeks
28-32
Weeks
Selection of Research project
Secondary data collection
Procedure of layout making
Literature Review
Research proposal
Selection of techniques for research
Analysis of data collected
Interpretation and recommendations
Conclusion
Draft
Research work submission
Figure 6: Gantt chart
(Source: As created by the author)

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
3.11 Conclusion
The summary of the research methodology section has explained that this paper has looked to
make use of the exploratory research design so that the thesis can move ahead in a precise
manner in accordance to the research aims and objectives. The research philosophy of the paper
is interpretivism in nature and exploiting this kind of philosophy would take the thesis forward in
such a manner that all the points that needs to be covered in this paper can be completed. The
researcher has utilized inductive approach as the paper looks to make use of new and innovative
data and the results that have been discovered is a new one. The paper has looked to make use of
secondary data as the data associated with the topic can be collected from various sources like
the internet, electronic mails and journals. This kind of data is very helpful for the determination
of the data that can be used for the purpose of data analysis in accordance to the topic that has
been taken into consideration. The paper has exploited the qualitative technique and hence the
data collected would be appropriate for this paper. The ethics have been considered while the
collection of the data has been initiated and therefore all the results can be used with the help of
these data is true and fair.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Chapter 4: Data analysis and findings
4.1 Introduction
The United Kingdom is going to exit the European Union and become an Autonomous
Union. This upcoming exit is going to affect the logistics industry of the island. It is expected
that the prices of fuels in the Union will increase. There are already problems in the number of
available drivers. It is expected that the number of available drivers will decrease and the
shortage will be worse than ever. Crossing the borders of the country will be affected hugely.
Both the economic and the political condition of Europe has been dominated by the
United Kingdom for more than one year. This has resulted in the United Kingdom to exit the
European Union. As the economic and the political condition of Europe was hugely dependent
on the United Kingdom, the exit of this nation from the European Nation will affect the
commerce of the United Kingdom. This will be just like the changes that has occurred as a result
of a few other events in the United Kingdom previously. Thus, the status of the country will be
changed from certainty to uncertainty for at least sometime. Hence, now everybody is looking up
to the teams that are negotiating the terms with both the nations to stay together but the United
Kingdom is swooping out every suggestion to stay together with the European Nation and is
extremely concerned about dividing the businesses into two parts.
Though there is a lot of mutual profits for the United Kingdom if they separate their
business from European Nation, still people are worried about their business statuses with
Europe. The trade of the United Kingdom with the European countries will be affected according
to some of the people. A large part of the logistics industry is dependent on the trade with Europe
and a significant part of their income comes from their trades with the European countries. Thus,
if the trade relation of the logistics industries worsens with the European countries, the income of
the logistics industries will decrease and this will in turn decrease the GDP of the United
Kingdom.
4.2 Implications of Brexit for the UK
When Brexit became official, it was predicted that UK would experience negative effects
that would not only be restricted to its borders, but will be spread to other EU members states.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
For instance, it was predicted that this move would trigger other countries such as Italy, Greece,
and France to also move out thus destabilizing the whole European region (van Bruggen 2016, p.
4; Archick 2017, p. 12; Chang, 2017, p. 4).This is yet to be seen. The expected consequences in
Great Britain are mainly of economic significance (Besslich 2013, p. 23).
Some of the economic consequences are positive. For instance, the trade patterns changed
after the global crisis and Brexitwas not responsible for the new patterns of the UK. For a long
time, the UK had sought market out of the EU due to the complexity of operating within the EU
that reduced the competitive advantage and also because of the Eurozone effect which only
favored countries that had applied it. The UK retained its original currency of the Sterling pound
(Geopolitical Futures 2017, p. 9). Brexit has only opened up more opportunities that have made
the UK the second top service exporter after USA (Frontier Economics 2016, p. 6). In 2016, the
services made 44% of all the exports as compared to 38% a decade ago. This improvement is due
to the minimal regulations and fewer trade barriers as opposed to goods. The UK found new
markets in the Commonwealth region for its services while the global crisis had pushed it to
diversify the market for its goods in the Asian continent, Turkey, Poland and other emerging
economies. Given this prior deviation and independence from the EU, it is expected that UK will
not be hard hit by Brexit(Vasbo 2015, p. 23; Geopolitical Futures 2017, p. 10).
Businesses have been and will continue to be adversely affected with CFOs of major UK
companies already complaining. This is because the EU was the major trade partner of UK and
withdrawal removed benefits that UK had enjoyed in the previous years such as the free
movement of people goods and services (Kierzenkowski et al. 2016, p. 14; Wadsworth et al.
2016, p. 1). Brexit means that tariffs would now be imposed for any of these exchanges,
increasing the costs of trade between EU and UK (Kierzenkowski et al. 2016, p. 1). An increase
in the costs of commodities will push the population to seek alternatives and their demand for
certain goods will reduce. In the same note, the quantity of goods purchased will reduce to the
weakening of the consumers’ purchasing powers (Vasbo 2015, p. 29). Generally, the consumer
will suffer increased costs particularly for the goods whose alternatives are from EU members
states (Tanzer and Pickett 2016, p. 6).

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Trade between UK other entities including EU would bind to the agreements of the
World Trade Organisation member states. In this scenario, all the benefits of being an EU
member are revoked and the country will have to conduct its businesses under the Most Favored
Nation criteria. This imposescustoms duties on UK exports leading to an increase in export
prices, will eliminate the price competitiveness of UK products (Frontier Economics 2016, p.
16). Non-tariff privileges will also be withdrawn such that the manufacturing specification of
products intended for the EU territory will cost UK more due to a discord in their individual
standards. Securing new opportunities and trade negotiation will be difficult because potential
markets such as the US would rather transact through a trading bloc rather than directly with an
individual state. This will limit the market expansion of UK post-Brexit. As a result, products
from the EU nations will be preferred over those from Britain (Besslich 2013, p. 29; Vasbo 2015,
p. 40).
The UK economy has been deteriorating with evidence being seen in the worsening of
the health sector and the reduced support to social services (Tanzer and Pickett 2016, p. 6). This
has resulted in increased death rates, especially in the geriatric population. Alzheimer’s disease
and dementia were the major causes of death with Influenza as a confounding factor magnifying
the effects. The elderly who were in constant need of medical care were hit with the prolonged
austerity as medical supplies and retention of medical staff will be unsustainable (Dorling 2016,
p. 1).
Brexit puts restriction on immigration. This translates to the loss of a healthy immigrant
population whose services in healthcare, education and social services sectors solved the
inequality in the UK. Research has it that immigrants to the UK are young population of the
working class and their inflow will reduce the dependency ratio. They are also highly educating
suggesting that they make up a larger workforce as compared to the natives Restriction will see
Great Britain revert back to the inequity (Vasbo 2015, pp. 52-53; Dorling 2016, p. 1).
4.3 Potential Brexit effect on Supply Chain
The Brexit likely to separate Britain from the supply chain of EU. Companies in EU
suspect that after Brexit the barriers to free trade will actually materialize. In a survey conducted
by Chartered Institute of Procurement and Supply, considering more than thousand supply chain

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
managers reveals the problem faced by companies in UK supply chain. It found that one fifth of
the suppliers are struggling to ensure contracts running after March 2019. Around 63 percent of
supply chain managers currently working with UK have expected to move out supply chain from
UK because of Brexit. 40 percent of Britain companies are searching for replacement of other
EU suppliers. One example of such company initiating such move is the automotive group
McLaren. Separation of Britain and EU supply chain channels lead to an increase in cost and
reduced efficiency (ft.com 2018). The problem is more intense for complicated manufacturing
such as automotive sector. The change in economic geography and corresponding supply chain
requires time to adjust and stabilize the economy.
4.3.1 Tariffs
Brexit is expected to lower the volume of trade between Britain and other nations of EU
due to greater trade barriers in the form of both tariff and non-tariff. With this, the benefit to UK
would be less from lowering prospect of market integration in future. Because of separation from
EU, there would be a net loss in EU budget. Being a member of EU, UK previously faced a
considerably low tariff while trading with other member countries of EU (Dhingra et al. 2016).
The custom union among EU members eliminates all trade barriers allowing free flow of goods
and services. After Brexit, the trade cost between UK and other European countries would
increase significantly. One of the important channel of rising trade cost is the high tariff on
imports. Because of Brexit, new tariff are to be imposed on exported goods from UK. This
reduces the export volume of UK effecting export earnings. In order to compensate the loss from
export and maintain a favorable trade balance, UK government may impose a higher import
tariff of imported raw materials or intermediate inputs (Powdthaveeet al. 2017). Therefore, as a
whole Brexit will have a negative influence on tariff, which adversely affect the trade volume.
4.3.2 Foreign Exchange
The exchange rate is the price of one country’s currency expressed in terms of another
country’s currency. Exchange rate plays in important role in determining the volume of trade. An
increase in the exchange rate implies depreciation of domestic currency. This means domestic
currency has become cheaper as compared to foreign currency. This by reducing the relative
price of export increases the volume of export. A reduction in the exchange rate on the other

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
hand means appreciation of domestic currency. This increases the price of domestic currency as
compared to foreign currency (Kreindler, Gilbert and Zimbron2016). Appreciation of exchange
change thus by lowering import price increases imports. Therefore, the impact of Brexithasa
mixed impact on UK. A depreciation of pound means Pound has now become more expensive
as compared to its trading partner. This means UK now has to pay a bigger amount for its import.
This hampers the import volume and even reduces import of necessary products such as
industrial raw material and intermediate inputs (Sheldon 2016). The positive side of pound
depreciation is that UK export is likely to be increased from the reduced price of exported goods.
4.3.3 U.K. Labour Market
The labor market in UK is directly affected from UK membership in EU. The
membership in EU allows the labor to move freely member countries. The immigrant laborer has
significant contribution to GDP, country’s productivity and fiscal budget (Ottavianoet al. 2014).
The UK born workers and immigrants are not perfect substitute. Even when they have similar
skill and education they are not considered as substitute in most of the labor market. This is
because these two groups of workers perform different kinds of task and engage in different
types of jobs. The immigrant generally have cultural specific skills and hence, enjoy a
comparative advantage or disadvantage for specific types of jobs. The EU immigrants having a
low skill generally concentrates in low technology intensive manufacturing, jobs like in private
household and cleaning. Low skilled UK born workers however manages to obtain jobs in
managerial role. The Brexit if restricts immigration of EU workers then sectors in UK containing
a greater proportion of immigrants laborers is going to be affected. This means the top and
bottom ladder in the job market will be influenced from restricted immigration (Driffield and
Karoglou2016). The gap would fill to some extent once the UK born laborers replaces the vacant
place of immigrants. The presence of EU immigrants is largely found in food manufacturing. In
general, enforcement of strict laws to immigrants by reducing overall labor supply raise wage for
domestic laborer and raises hiring cost for firms.
4.3.4 Supply Chain Delay
The need for a new custom border between UK and EU brings new costs in frontier. A
Japanese business having its European distribution in UK could now face a duty on goods
coming to UK and on goods moving to continental Europe. The duties are even applied under

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
agreement of free trade. There is also extra cost for import and export for goods moving from
UK to EU. The business needs to understand the additional transaction costs (Bornet al. 2017).
The new customs requirement and additional transaction cost would bring bottleneck at part of
UK.
4.3.5 Taxes
Brexit have significant impact on several economic areas. The tax structure of UK is one
such area that is likely to be affected. As indirect taxes like VAT, Custom duties and exercise
duties are mostly EU based, greater impact would be on the indirect taxes. The UK lawmakers
could decide to lower the corporate tax rate in the country (Gourinchas and Hale 2017). A lower
corporate tax would encourage business in UK. This is the only positive impact of Brexit.
4.4 The impact on Imports and Exports
Just like a lot of other western countries, U.K. imports most of its natural resources. The
import of natural resources by U.K. is a lot more than the materials the nation exports. Hence, it
is very clear that the with U.K. sitting outside and becoming a single market, has given rise to a
lot of concerns to the people or the nations who operate the services of the logistics. This
separation from the European Nation will increase the trade tariffs, the fuel prices and the prices
of the increased commodities and the finished goods (Morel et al. 2016). All these increase in the
prices and changes combined is supposed to affect the economic growth of the nation.
The country should be highly concerned about the fuel prices as the oil fields of the
country in the North Sea are not enough to fulfil the needs of the country. More than a quarter of
the fuel needs of the United Kingdom are supplied by the countries of the European Union. If the
fuel prices of the countries in the European Union increases, then the logistics companies will
have to increase the prices of their products for the consumers (Schiereck, Kiesel and Kolaric
2016).
These negotiations might also lead to a disadvantage in the competition of the market of
the United Kingdom. As an example, the market shares of Europe on the products obtained from
the herds of sheep can be considered. The market of the United Kingdom has a lead over the
market of the European Union countries on the production of products obtained from sheep herds
such as meat and wool. The share of this market is supposed to be affected greatly as a result of a

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
deal which is much harsh or absence of a deal. This might lead the United Kingdom to return to
the rules established by the World Trade Organization (WTO). A lot of new trade tariffs has to
be introduced to show the market the face of certainty from the uncertainty that the market will
be facing with the introduction of the changes (Kotios and Braithwaite 2017). The European
market will have to survive after separation from the British market. Thus, they will have to
figure out cheaper and easier methods to find alternatives of the goods they used to obtain from
the British market.
There are several cases in which these changes will make a positive impact on the trade
barriers of the European countries. These changes will bring encouragement to the European
market and make them opt for innovations. It can be stated as an example that, according to a
certain group of observers, the increase in the fuel prices will give the United Kingdom an
opportunity to develop their commercial vehicles in a way such that they can use alternate fuel
(Bartkova and Ishchuk 2017). The use of alternate fuel will have two benefits. Firstly, it will
decrease the pollution in air due to the burning of fuels and secondly, it will decrease the
importance of the use of imported fuel.
Figure 3: Trade Partners of UK (Frontier Economics 2016, p. 8)
As a member of EU, Britain enjoyed reduced trade costs because of the abolition of all
trade barriers. This allowed free movement of services. However, Brexit excludes it from EU

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
and increased trading costs are expected because of more tariffs imposed on imports, increased
nontariff trade barriers and reduced participation of UK in pushing EU to further reduce the
nontariff barriers. Van Reenen (2016) posits that in the event of a soft Brexit, nontariff barriers
will cause a 25% increase in trading costs between EU and UK while a complete walkout will
result to 75% increase (p. 371). EU also negotiates for trade reductions between its members and
other countries belonging to the OECD and this decision excludes the UK from such benefits
meaning its trading costs with non-EU members will fall at a rate slower than that of the EU
member states (p. 374). Even as Brexit opens up more opportunities for trade with the USA,
China and Japan, the value gained will not march the profits derived from trade with EU. Its
bargaining power will also be highly compromised as EU has been doing its bidding. He
concludes by saying that UK will have to invest in civil servants who would ensure that trade
negotiations are made on beneficial terms (p. 375).
With a similar thinking, Frontier Economics (2016) quantitates the value of UK imports
and exports and they stand at close to £400 billion p.a. This work also forecasts a reduction in
this volume as Brexit will lock the UK out of the current benefits and those EU is preparing
for.EU is pushing for further economic integration through efforts of completely doing away
with the non-tariff barriers, increased coordination with other major markets and digitization of
the single market such that all regulations, online standards and practices are harmonized and the
national markets are merged into a single entity (p. 18).
4.5 The continuing Driver Shortage
The logistics industry has one more primary concern. It is such that the countries of the
European Union constitute of almost one-tenth of the commercial drivers of the United
Kingdom. The negotiations of the Brexit are still under the way but still a lot of the countries of
the European Union have started already to consider about their employments in other countries
where the future rights of the people are more secure than the condition of the European
countries (Hall and Hobbs 2017). This will have a huge impact in the logistics industry as all the
European drivers will leave U.K. in search of work in some other countries. This will bring a
shortage in the availability of the commercial drivers in Britain. On the other hand, this shortage
will increase the demand for the British commercial drivers. The drivers thus will demand for
higher pay than usual. As the British drivers understand that there is a high demand for the

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
commercial drivers in the logistics industry, there will be more people coming to the industry for
the work. With the increased number of people going for commercial drivers, skilled persons
will be decreasing (Dixon and Jo 2017). With respect to this, the agricultural industry is already
facing the shortage in the number of skilled labors due to this job migration. This is an example
of this case of decrease in the skilled labors.
To control this problem, some necessary steps have to be taken by the government of the
United Kingdom. One of the steps can be such that the U.K. government can arrange for some
incentives to the commercial drivers from the European Unions and offer them the jobs to the
U.K. A lot of discussions have been done already on this matter, on how in the post-Brexit
period the control of the immigrations will attract the attention of the overseas workers. This will
be of utter benefit to the logistics industry.
4.6 Trade and Border crossing with Ireland
It is supposed that the European Unions will not be agreeing with the negotiations that
will run with the U.K. on the matter of providing significant concessions to the freedom
movement and the goods. This implies that the control of the customs in the U.K. will not
become more tight and evident that what the situation is currently in case of both import and
export of the goods.
This plan should be most importantly conducted with Ireland as this is the only country
of the European Union which has a physical border with the United Kingdom. There is always
an existing trade between the Republic of Ireland and Northern Ireland. They can trade freely
with each other and the volume of products they trade are also significantly large. If the
government of U.K. is unable to reach to any acceptable and agreeable terms with Ireland, then
the trading business with Ireland will be hugely hampered and the U.K. government can suffer
from a loss of billions of pounds. For now, the people residing on the borders of the two nations
most commonly travel to the other side of the nation for the purpose of shopping. Thus, if new
laws are imposed on the crossing of the borders, it might be problem for the common people to
change their regular habits all of a sudden (Fuest and Sultan 2017). On the broader side, the
firms who have a large clientele from will have their revenues reduced as the funds of the buyers
might not be as high as to afford the products and continue the business as it was pre-Brexit.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Thus, the politicians and the citizens from both the sides of the borders have shown
concern for this potential difficulty that will be faced by both the nations as whatever the reason
be for the detachment, there is still a strong tie between the two nations on both the cultural and
the economic factors. Even then, if the two nations separate, the government should still impose
some plans to tie their business with Ireland such that both the nations, the United Kingdom and
the European Unions are benefitted.
Thus, sharing a border with Ireland has led to another issue which has to be resolved
along with some other issues as well. On the other hand, these decisions have to be taken
extremely quickly. Otherwise the stability and certainty of the two nations such as United
Kingdom and the European Unions will be quite a problem to restore. The relationship between
the two nations will also have to be redefined. It is important for both the nations to consider
these factors at the time of negotiation and the plans should be approached in a measurable and
respectful manner. This will be more effective than approaching towards a battle between the
two important nations of the world. There is a negative impact of this separation on both the
nations and thus the negotiators are also hoped to consider all these impacts and make a decision
that will result in the benefit of both the nations.
4.6 Overall Impact
4.6.1 Impact of Brexit on Aviation
Regarding the impact of the Brexit on the economy, the Brexit is expected to give a
shock to the market of the United Kingdom by the British treasury as the price of the U.K
currency is supposed to fall.
It is not known how the negotiations with the Brexit will proceed, the IATA have
developed a model that predicts the impact the Brexit in three different scenarios of “hard” and
“soft”.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
From the predicted model, it can be seen clearly that the passenger market in the U.K.
will be around 6 percent less in the year of 2035 for hard Brexitthan what the prediction is for the
soft Brexit (Freedman 2017). However, the passenger market for the hard Brexit in U.K. is
predicted to increase by 45.5 percent from 2015 to 2035.
4.6.2 Impact of Brexit on Shipping Companies
It is expected that the container traffic in U.K. will show a significant growth than what
has been a few months before with the implication of Brexit for a short term. The international
monetary fund believes that with the introduction of Brexit the political, economic and
institutional uncertainty will increase as there will be a slowdown in the GDP of the country.
This will increase the bilateral trade between countries such as India, Canada etc. These trades
will be conducted via the sea and hence, the shipping industry will be benefitted with the
introduction of the Brexit (Ford 2016).
4.6.3 Impact of Brexit on Rail and Bus
In the post Brexit period, the capability of the operators of the rail in U.K. in participating
in the processes of tender in E.U. will be determined on the basis of the decisions given by the
negotiators and the relationship that will emerge between the two nations after the decisions. The

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
tenders processed by the rail operators is usually given jointly for U.K and EU. If the relationship
is good enough, the rail tender might not be separated (Kotios and Braithwaite 2017). If the
relationship between the two nations is completely separated, then the rail will have a separate
authority and thus the performance of the rail will be affected.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Chapter 5: Conclusion and Recommendations
5.1 Introduction
This section of the paper addresses the final results that have been obtained from the
earlier section and the measures that have been taken with the help of which effective results
have been collected. The results gathered would be connected with the above constructed
objectives in order to ascertain whether the results obtained is true for this paper or not. The
results are compared with the objectives and accordingly the completion of the paper can be
undertaken. This section would even determine the recommendations and the future scope that is
associated with this paper.
5.2 Linking with objectives
The repercussions of Brexit will not only be seen in the UK but the remainder of EU will
also experience the impacts. Since UK is a major contributor to the EU budget even with the
rebates it negotiated. It has become apparent that the remaining EU members will have to put
more effort in filling the gap left by the EU. The most pragmatic decision here will be to increase
the input of the remaining members. A reduction in the total spending would also be a viable
approach but this will also create deficits in the support given to individual member states. In
matters of trade, EU exports to the UK will reduce significantly whereas the imports will face
higher taxation rates. This is in the event of hard Brexit. A reduction in the EU’s GDP after
withdrawal of Britain will remove EU from its prestigious position as a trade partner.
It can be said that EU may suffer from reduced biomedical research on diseases and their
treatments as British Universities have been the centers of research with funding from EU. Final
Brexit negotiations may see EU spending more in establishing and upgrading research centers in
other EU countries. It can also be concluded that Brexit will shift investments away from Europe
over time as UK position in the EU was the main attractant of other foreign markets. An
alternative to this would be for new locations to strategically place themselves as preferential
investment localities. This can only be achieved if EU pressures national governments to
liberalize their markets and create business environments conducive for investment.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
Brexit will also cause a lag in the adoption of liberalizing policies as it was among the
liberal economies in the EU rallying support for more freedom and opposing policies that are
illiberal. With its exit, the remaining liberal countries such as Germany, Netherlands, and Ireland
will lack the voice, up to 35% of votes to push for the same. Germany will thus particularly be
put in a precarious position as it will be leading the opposition in the European Council when
deliberating against illiberal policies. The nations who are not so vocal on liberalization will be
more powerful.
This is also confirmed that the non-Eurozone member states will be overridden in policies that
Eurozone members might pass to favor them. UK always blocked such moves and in its absence,
the marginalization of the non-Eurozone member states may cause political tension within the
EU as these countries will seek to influence and be heard in other ways. Denmark is especially
feared to be contemplating a ‘Denxit’ just like UK after its withdrawal from the Eurozone. This
could further trigger similar decisions from other countries that are also after liberalization.
When UK effects border controls at the end of negotiations, EU will bear the
consequences as more immigrants will divert to other EU countries. As immigrants tend to bring
in labor and specialized skills, these other countries will benefit from the influx, Germany has
been predicted to experience positive effects on this. On the other hand, countries from which
immigrants are drawn particularly Poland will have a surplus of labor and skills but the country
will not enjoy financial benefits as this is the major reason why its citizens look for better
opportunities elsewhere. Countries like Spain where Briton retirees prefer to settle down will
benefit from the pension remittances UK will extend to these retirees in their preferred country
of stay. Also, successful border control may trigger other countries to push for immigration
policies similar to the UK. France has already shown interest in this however there lies a big
difference in the type of immigrants that these countries seek to restrict. While UK targets
immigrants from EU, France will be closing in on those from outside EU. Thus, it can be easily
comprehended that thoughts correlate with this and also add that the diversion of immigrants into
other member states may cause political mayhem as this has also been contentious for other EU
member states. Poland will also lose out on the money that its nationals working in the UK
usually send home.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
5.3 Recommendations
Though the Eurosceptic and the Pro-European factions of the Brexit referendum were
very vocal on defending the positions and pushing for their side of the vote, what these two
groups did not give was the options to be pursued after the vote outcome.With the ‘leave’ vote
now being a sure thing,Britain must take a path to follow.Research indicates that there are four
models that UK could take up,namely:
 The Norwegian model
 The Switzerland model
 The WTO model
 An FTA model
With hard Brexit looming following insinuations by PM Theresa May, the WTO model
remains as the plausible option. Under the WTO model, the UK will not be subject to any of the
EU legislation and any dealings, particularly in matters of trade, will be done under WTO
agreements.UK could regain its freedom and also impose its control on migration(Besslich 2013,
p. 42; Vasbo 2015, p. 67). Vasbo(2015)says that this approach would automatically eliminate
Britain from the single market which is disadvantageous as it goes against its liberal trading
culture and is likely to put off trade with EU due to increased trading costs. The prospect of UK
trading with other parts of the world on a solo ticket may also prove futile as most trade partners
target the European Single market and hence may look for other partners that will grant them
these privileges. The only trade that Britain will be left with is on goods and services that rely on
UK competence rather than on the influence of the EU (Irwin, 2015, p. 6; Vasbo, 2015, p.
68).Besslich (2013, p. 42) insists once UK takes this route,there is no rejoining EU when things
turn bleak.
The second option would be to opt for a bilateral agreement. Such a deal would enable
the UK access certain benefits offered by the EU while not being burdened by full membership,
Switzerland and Norway enjoy this arrangement.In the Swiss model, the benefits are limited as it
only belongs to the European Free Trade Association(EFTA). Switzerland chooses the areas,
political or economic that it would wish to cooperate in with the EU. If UK chooses this model,it
will be exempted from contributing towards the CFP and CAP;it would also be in a flexible

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
position to pursue its interests in external trade independently or via the EFTAjust like
Switzerland does.UK would further be excluded from the employment and social law which it
sees as unwarranted burden to employers and businesses.It will only be expected to follow
through with the regulations in its bilateral agreements with the EU (Besslich 2013, p. 45).
Despite the attractiveness of this model, UK will have to incur the costs ofa loosened
integration.Like Switzerland, it will only have access to components of the single market that it
has subscribed to hence losing out on the full advantages of the integrated market.UK will no
longer influence EU decisions as it will only be required to comply.The free movement of
services which UK currently enjoys will be lost and movement of its goods will be subject to the
‘origin rule’ and this goes against its liberalization ideals(Dhingra et al., 2016, p. 6). For so long
Switzerland has failed to reach a consensus with the EU on the regulation of financial services
and UK may experience the same difficulties.EU is also unlikely to bow down to the UK
demands in such a partnership and as such,weighing the gains and losses of this model,it does
not reflect as a rational alternative(Besslich 2013, p. 45; Irwin 2015, p. 6; Vasbo 2015, p. 69).
Norway along with Iceland and Liechtenstein belong to the EEA (European Economic
Area).EEA members operate in a free trade area which gives these countries control over their
trade policies(Dhingra et al. 2016, p. 4). Unlike the EU members, Norway determines the tariffs
it imposes on non EEA trade partners and also individually engages those countries outside EU
for convenient agreement without interference from EU. Additionally, they have full access to
the European single market yet they are not bonafide EU members. This necessitates Norway to
adopt EU regulations to standardize operations in the market. The only areas of EU that Norway
is excused from are the CAP, CFP, CFSP, monetary, justice and immigration policies(Besslich,
2013, p. 43; Vasbo, 2015, p. 68). As it does not belong to the EU Customs Union, Norway has to
comply with the non-tariff barriers of antidumping and rule of origin (Van Reenen 2016, p. 370).
If UK negotiates for this model, it will be reprieved of its previous commitments to these
policies. Still, the model comes with its own tradeoffs. Like Norway, it may have some input into
EU decisions as the Commission consults EEA countries but nevertheless, it will lose its voting
rights over any decisions and neither will a friendly stance be found with the European
Parliament meaning that they will have to rely on secondary sources on the debates in EU

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
parliament.UK will also be required to continue under the EU regulations in the single market.
Its contributions towards the administrative functions of the union will remain and in addition, it
will be required to chip in the cohesion fund. Unfortunately,UK will also not be receiving
financial support it was used to and can also not negotiate for a rebate for the contributions
allocated to it. Though appealing from an economic approach, this model will compromise the
sovereignty and political influence of Britain as it will be subjected to rules that it does not
participate in formulating(Besslich 2013, p. 44; Irwin, 2015, p. 6; Vasbo, 2015, p. 68).
A final alternative for Britain would be to seek a unique but comprehensive free trade
agreement (FTA) with EU. It is expected that UK will ask for conditions that will suit it knowing
that its influence in the EU is appreciated by its friends. What is uncertain is the extent to which
EU member states will compromise to grant UK its wishes, putting in mind that the latter
voluntarily walked out on them(Besslich 2013, p. 46).However, it is in the best interests of EU to
find a common ground with UK so that the member states may not suffer as they have
comparatively invested in UK financial markets and trade. The EU is also more attractive as a
trade partner with UK in it as opposed to without it(Irwin 2015, p. 9). UK also would not wish to
lose its largest trade partner as this would lead to a loss in trade volumes that could not be
covered by other markets.UK would have to give up bits of its sovereignty while EU would
allow it liberty in certain areas though not at the expense of the member states. This would be
regarded as an equal exchange though it would take a long time for it to be concluded and a final
agreement drawn(Irwin 2015, p. 6; Vasbo 2015, p. 60).
5.4 Future Scope
There are various aspects in accordance to which future researches can be taken. With the
advent of time, there can be transformations in the policies and the regulations that can have an
impact on the logistics for the unprecedented impacts of Brexit. The changes that would be
taking place would helpful in undertaking new and improved researches on similar topics with
the help of which better and enhanced researches can be taken in accordance to the changes that
have been taking place from time to time.

THE UNFORESEEN IMPACT OF BREXIT ON THE FUTURE OF LOGISTICS IN THE UNITED KINGDOM
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