Brexit raising freight costs as pound weakens

Rob Pike, MD, International Forwarding Ltd

 

Sterling fell to a six-year low against the euro yesterday, as uncertainties about the UK’s Brexit strategy led to renewed downward pressure, leading to a negative impact on freight rates for those paying in GBP.

According to a report in Lloyd’s Loading List, the weakening of sterling since the EU referendum vote has raised export haulage costs by as much as 16% since June. With analysts forecasting further slips before the end of the year, price volatility can be expected to continue for businesses trading with Europe and other overseas territories.

“The weakening pound is putting pressure on the UK freight forwarders who are facing an unavoidable rise in costs,” said Rob Pike (pictured), MD at International Forwarding Ltd (IFL). “Each drop in pound sterling brings a significant price increase on import-export rates across the freight and logistics industry. Unfortunately this means that many UK freight forwarders are being forced to address exchange rate fluctuations over time by adding currency adjustment factors (CAF) into invoicing.

“There is little reassurance for customers at present with the pound trading at around €1.10. It’s going to be a bumpy ride across the transport and logistics industry, at least in the short term.”

IFL advises customers that it always checks for the most competitive rate. For more cost-effective freight forwarding, consider using IFL’s groupage services and asking about volume discounts if you have frequent shipments.