Why British businesses deserve support for their growth plans

The UK has a long and proud history of exporting goods, services, and ideas, stretching back beyond the industrial revolution. British businesses have always showcased their resilience, innovating to meet new standards and navigating different challenges.

This is especially true in the Midlands, a region known for its manufacturing prowess and historical significance - the UK’s industrial heartland. However, without the right fuel or right conditions, the economic engine cannot function effectively.

Today, key elements of our transport and logistics infrastructure, such as roads and airways, are under increasing strain. If the UK is to provide an environment where businesses can be competitive, a renewed focus on improving efficiency and infrastructure within the logistics sector is required.

The new Labour government has been explicit about its ambitious growth plans, and we fully support this growth mindset. But at Fedex, we have concerns about two potential clouds on the horizon, which could impact the UK’s ability to achieve this goal.

The first cloud: a skewed transport policy

Crucial to the success of the logistics industry - and therefore to the success of businesses wishing to export - is a coherent transport policy that enables cargo to flourish. However, there is a current trend within UK policy that promotes passenger flights as important economic drivers and leaves the crucial role of cargo overlooked.

With confirmation that the government is backing expansion at Heathrow, the aviation industry will feel buoyed about future growth prospects. Particularly as the sector is making great strides towards Jet Zero, addressing environmental concerns. It is crucial, however, that we ensure this expansion doesn’t limit the amount of goods that can come in and out of the country via cargo.

Another policy area that we’re keen to see addressed is the proposed changes to noise and emissions regulations. This will put considerable pressure on cargo aircraft, which are often ex-passenger planes. Newer planes, which are usually reserved for passenger flights, are prioritised by the new regulation, whereas older and less advanced cargo planes are more likely to fall on the wrong side of the proposed regulations.

The second cloud: customs and paperwork

The strategic importance of air cargo and logistics was highlighted during the pandemic when businesses of all sizes, consumers, and even the government, recognised how important the expeditious movement of goods is to the country.

One of the most significant challenges to that expeditious movement is the complexity of customs regulations. With the end of the free circulation of goods within the EU, Brexit introduced more bureaucracy that makes trading with our closest neighbours increasingly time-consuming. Now, the government is clear that a return to a customs union is not on the cards, so progress would be characterised by increasing the efficiency of existing processes.

FedEx has decades of expertise in cross-border shipping, including to markets further afield like the USA and Asia, and we - along with the rest of the industry - have invaluable experience that the government can call upon to help shape the future.

At present, the net result of the extra layers of regulation has left businesses having to invest more time and effort into transporting their goods overseas. A British manufacturer wanting to ship its components to France will have significantly more paperwork and time delays than a German manufacturer of the same parts.

The silver lining: continued demand and resilience

Despite these challenges, there is a glimmer of optimism. Our research with Effigy Consulting revealed that the UK continues to be one of the world’s leading exporters, with goods going to both the EU and further afield.

Both supply and demand for UK goods remain strong, and the adaptability businesses have demonstrated in the post-Brexit landscape is remarkable. While the regulatory burden has undeniably increased, it has not deterred UK companies from pursuing international trade.

In fact, the resilience of British businesses continues to shine through, demonstrating a collective determination to overcome obstacles, and maintain Britain’s status as a global trading powerhouse.

Conclusion: the need for a rethink

However, this resilience must be supported by meaningful reforms. To ensure continued success, it is essential that the government takes action to streamline customs regulations and address the challenges the logistics sector faces.

Nearly nine years after the Brexit referendum, uncertainty surrounding trade agreements and customs procedures remains a concern. As the UK looks towards the future, it is crucial that the policy framework evolves to support both exports and imports - with the same urgency and attention that has been devoted to passenger transport.

The UK remains competitive at its core, but without a concerted effort to enhance the efficiency of its logistics infrastructure and regulatory processes, businesses could find themselves at a disadvantage in an increasingly competitive global market. It is time to remind policymakers of the critical importance of maintaining a healthy logistics ecosystem – one that ensures the heart of British business continues to thrive and grow. Only then can the UK fully unlock its potential as a leading exporter in the global economy.