MSc International Logistics: Brexit's Impact on Future UK Logistics

This report, prepared for an MSc in International Logistics, analyzes the unforeseen impact of Brexit on the future of logistics in the United Kingdom. It begins with an introduction to Brexit, its background, and its status as a 'wicked problem,' highlighting the aims, objectives, and research questions. The literature review explores EU integration theories, the benefits of EU membership, and the Brexit process, focusing on the UK's logistics sector. The methodology chapter outlines the research design, philosophy, approach, data collection, and analysis techniques. The data analysis and findings chapter examines the implications of Brexit, including its effects on supply chains, the labor market, imports and exports, and the driver shortage. The report also assesses the impact on aviation, shipping, rail, and bus services. The conclusion links findings to the research objectives, offers recommendations, and suggests future research directions, providing a comprehensive overview of Brexit's effects on the UK logistics industry. This assignment is available on Desklib, which offers students access to past papers and solutions.

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