UK logistics industry calls for accelerated reduction of Brexit trade frictions: How £12bn cost drags down industrial competitiveness

The UK logistics industry association, Logistics UK, has publicly called on the government to accelerate the removal of trade barriers left over after Brexit, following multiple rounds of talks in Brussels with Caroline Read, Deputy Ambassador of the UK Mission to the European Union, the International Road Transport Union (IRU), BusinessEurope, and representatives of the Northern Ireland Executive Office. Behind this action lies the deep anxiety of the UK's manufacturing and logistics industries over the erosion of industrial competitiveness caused by ongoing trade frictions.

The Real Cost of Trade Friction

According to the latest analysis by transport consultancy MDS Transmodal, trade friction between the UK and its major trading partners—including new non-tariff barriers introduced after Brexit—costs the UK economy approximately £12 billion annually. More concerning for the industry is that in the decade since the 2016 Brexit referendum, UK exports to the EU have fallen by 15.9%, while exports to the rest of the world have plummeted by 37.2%. These figures suggest that the decline in UK export competitiveness is not limited to a single market but is structural in nature.

For manufacturing, logistics efficiency directly determines supply chain costs and delivery lead times. Ben Fletcher, CEO of Logistics UK, emphasized after the meeting: "Logistics is the core infrastructure supporting hundreds of billions of pounds worth of UK-EU trade. Eliminating existing trade friction would allow £12 billion to be reinvested into the economy, driving growth and improving living standards." His remarks highlight the symbiotic relationship between the logistics and manufacturing sectors: port clearance delays, additional inspections, and paperwork all ultimately translate into hidden costs for manufacturers.

The Logistics Bottleneck in UK Industrial Strategy

The UK government has been actively promoting a "Global Britain" strategy in recent years, aiming to boost economic resilience by signing new free trade agreements and strengthening the manufacturing base. However, border friction with its largest trading partner, the EU, following Brexit is becoming a weak link in this strategy. The topics discussed by Logistics UK in Brussels—including sanitary and phytosanitary (SPS) checks, enforcement of the 90/180-day rule for drivers, and the promotion of digital customs and export documentation—are all specific operational obstacles in daily trade.

UK manufacturing depends heavily on efficient cross-border supply chains. For example, industries such as automotive manufacturing, aerospace, and food processing commonly use just-in-time (JIT) production models, where border delays can cause production line stoppages. MDS Transmodal's data shows that the contraction in UK exports over the past decade partly reflects manufacturers shifting some supply chains inside the EU to avoid uncertainty—directly contradicting the government's policy goal of bringing manufacturing back to the UK.

Policy Breakthroughs: Digital Customs and Labor Access

During the talks, Logistics UK particularly emphasized the scope for improvement in digital customs tools and rules on personnel movement.During the talks, Logistics UK particularly highlighted the room for improvement in digital customs tools and personnel mobility rules. Currently, customs declarations between the UK and the EU still rely heavily on paper documents, increasing processing time and error rates. The industry sees the implementation of the Single Trade Window as key to reducing administrative costs. Meanwhile, the EU's 90/180-day rule restricts the working time of UK drivers within the EU, forcing transport companies to rotate drivers and driving up operational costs.

Caroline Read stated after the talks that reducing trade barriers with the EU remains a government priority, and that the government is implementing agreements reached at last year's summit to lower business costs and support employment. However, the industry expects more substantial progress. Logistics UK said it will continue to pressure both the UK government and the EU to reduce non-tariff barriers before the next UK-EU summit.