The impact of a ‘No Deal’ Brexit

With continuing uncertainty about exactly how the UK will leave the European Union, there remains a risk of a disorderly ‘No Deal’ Brexit on 31 December 2020. As the Dover Straits provide the shortest and most frequent crossings between Great Britain and the continental mainland and the ports and terminals on this corridor are space constrained, the introduction of customs and other controls at the borders may lead to delays and the disruption of existing supply chains.

MDST used its GB Freight Model (GBFM) to assess the potential impact of these delays on flows of unitised goods between the continental mainland and Great Britain if the average additional cost to a logistics provider is £20 per HGV on the Dover Straits routes. The £20 fixed additional charge that was assumed in the ‘No Deal’ Brexit scenario is the equivalent to an average one hour of additional delay for an Eastern European haulier operating across the Dover Straits. Trucks registered in these countries account for about 90% of the total movements on the shortest crossings between the continent and Great Britain.

The modelling suggests that, given the additional fixed cost of operation and assuming no capacity constraints and no changes to rail connections at ports, 20% of the existing traffic on the Dover Straits would switch to longer routes on the North Sea (particularly via the Thames) and the Western Channel. This also implies that a proportion of the market would, in the medium term, choose to minimise its costs on a door-to-door basis by switching away from driver accompanied supply chains to alternatives provided mainly by unaccompanied RORO and LOLO services.