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As many as 61% of the freight and logistics businesses described uncertainty as a barrier to international growth

Logistics businesses are struggling to fund their Brexit preparations due to declining profit margins, new research has revealed.

Margins halved from 4% in 2017 to 2% in 2018, findings from the Freight Transport Association showed.

The research, conducted on more than 500 freight and logistics businesses operating in the UK and internationally, suggested that this left them vulnerable to increases in operating, fuel and freight costs, making planning difficult.

As many as 61% described uncertainty as a barrier to the growth of their businesses internationally, the 2019 Logistics Report stated.

“Declining profit margins have left them struggling to fund their Brexit preparations,” said Elizabeth de Jong, director of UK policy at the FTA, which represents the interests of 17,000 logistics businesses.

“Profit margins were only 2% in 2018, making any significant financial investment very difficult to justify for any business, especially when the international trading landscape post-Brexit is still to be determined - logistics companies simply do not know what they should be planning for. It is of no surprise, then, that at the time of the survey, 37% of respondents had not taken any action to prepare for Brexit and only 17% had created a plan for a no-deal Brexit.”

The surveyed companies also expressed concern over how the UK’s departure from the EU would affect their workforce, with 80% claiming the employment status of EU workers was their most pressing Brexit challenge.

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