How does EU referendum impact logistics businesses?

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There is a lot of concern surrounding the EU referendum (June 23) and many business owners start worrying about how UK potential exist from the EU can affect them. This would be the first time in 40 years that Britons will vote for renewing UK membership in the EU.

With the amount of people from all over Europe living in the UK it will definitely change a lot for both businesses and regular people. Apart from a much harder way of travelling, longer queues in airports and higher travelling costs, UK exit from EU will cause a lot of problems for companies. According to Golden Sachs analysis, UK businesses will experience major loses if UK votes to leave EU.

UK membership in the EU allows British companies to freely employ people from other state countries. Not only this, but over 50% of products manufactured in the UK find themselves on the ground of other state members, which keeps UK economy running. If UK is no longer part of EU importing and exporting products will become much harder, more expensive and the delivery times will increase drastically due to a need to stay in logistics traffic for longer times. This may lead to many customers opting out from ordering UK manufactured products and thus, will lower the volume of work and orders for third-party logistics companies.

Another problem would be employment of people in the distribution centres. There are a lot of workers from Eastern European countries employed in the UK through an agency based in their home county and get paid in that country’s rate (since they are employed by a company based in their home country) and that pay is lower than what local Britons would get. The workers are happy that they get paid more than at home and the companies are happy they pay less than they would normally have to. If UK is no longer part of EU those businesses won’t be allowed to freely employ foreign workers and thus, would have to employ Britons, which in turn will also increase the costs to consumers.

A way to deal with this problem would be to invest in warehousing automated systems. It would be an expensive option to choose at the time but will save companies a fortune in the long-term. Such computerised robotic systems use machines to pick out items for an order and pack it all together. This would keep the long-term costs same to the manufacturer and the customers but would increase spent in the next few years on installation of these machines, which in turn would create jobs in the industry. Such giants as Walmart, Amazon and Coca Cola have automated warehouses to save costs, increase efficiency and eliminate errors.

 

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