+49 (0) 421 9600-10
23 March 2017 - Günther Hörbst

Brexit and its consequences for the transport industry

Maritime economy and logistics
What will Brexit mean for Bremen as a logistics hub?

How will the UK’s impending exit from the EU affect the logistics sector? Günther Hörbst, Managing Director of the Via Bremen Foundation, on the economic links between the United Kingdom and the EU. 

The United Kingdom is one of Bremen's most important export market
The United Kingdom is one of Bremen's most important export market © Bremeninvest/Jens Lehmkühler

After the British voters made their decision on Brexit in June 2016, Google published some notable statistics. The internet company reported the most common search terms entered by British users on the day following the result. First place went to “What does it mean to leave the EU?” In second place was “What is the EU?” That tells us two things about the decision. One is that facts obviously played very little part in the Brexit campaign. The other is that the British seem to have shown a spectacular degree of recklessness when taking their decision. As a recent study by the management consultancy firm Deloitte makes clear, the economic links between Britain and Europe are considerably stronger than previously thought – not to mention the fiscal connections. Major German companies employ around 400,000 people in the UK – about a quarter of these (96,000) work in logistics and transport. In 2016, German companies in the United Kingdom generated over €150 billion in revenue. The German automotive industry accounted for around €40 billion of this. According to the Deloitte figures, the United Kingdom is Germany’s third most important export market, worth €89 billion.

Consequences for the automotive industry?

The United Kingdom is an important trading partner for Bremen as well. The Bremen Statistical Office puts the value of goods exported to the UK or imported from there at €2.6 billion. The largest part of the exports consists of vehicles, at around 60 per cent. That illustrates the significance of Bremen as an automotive hub for trade relations with the UK. This is the area where experts deem a negative impact on the transport sector to be most likely. After all, Bremen is one of the most important global locations for the car industry, with the world’s largest Mercedes production site, associated supplier industries, distribution and customisation centres, and Europe’s largest automotive hub, which handles around 2.5 million vehicles annually.

The largest part of the exports consists of vehicles, at around 60 per cent
The largest part of the exports consists of vehicles, at around 60 per cent © Bremeninvest/Frank Pusch

Christian Kille, Professor of Logistics at Würzburg University of Applied Sciences, expects a further impact on logistics from the merger of PSA and Opel/Vauxhall. In his assessment, Vauxhall sites in the UK could suffer from the effects of synergies, leading to reduced transport volumes. What’s more, the logistics provider DSV currently controls the entire parts supply chain for US car manufacturer GM, Opel/Vauxhall’s present owner, centrally from the GVZ Cargo Distribution Centre in Bremen. However, the acclaimed logistics expert does not believe that Brexit will result in any serious slumps in the overall car business for logistics companies.

Let’s have a closer look at some hard facts. None of these are giving much cause for concern at the moment. The Logistics Indicator from BVL International (the Global Supply Chain Network) for the fourth quarter of 2016 is at its highest point since September 2011. In other words, the mood in the logistics and transport industry is very positive – despite Brexit, Trump and the uncertainties caused by the upcoming elections in France and Germany. Even the container shipping companies are buoyant after many years of gloom. There are currently more consignments than there is space on ships. For exports from northern European ports to Asia, shipping lines are now adding surcharges, and even then it is not unusual for containers to be left behind at the quayside.

Protectionism – a cause for concern

The greatest cause of concern for the logistics sector is the rising tide of protectionism. Brexit, and above all the election of Donald Trump as US president (“America first”) have boosted those factions who feel that globalisation is doing more harm than good. In the medium term, this trend towards nationalism could lead to higher tariffs and import restrictions. On a global scale, that would restrict transport routes – and at worst could lower consumer demand due to price rises. The resulting fall in the demand for goods would have a negative impact on the logistics and transport sector. However, this is just one possible scenario. No one actually knows whether things are going to go that far.

The fact is that even with a ‘hard’ Brexit – i.e. a complete withdrawal of the United Kingdom from its agreements with the EU – there would be a transition phase of two years. This would be followed by at least three more years until the UK has negotiated new bilateral agreements. So we are talking about a period of around five years, for which it is impossible to make specific predictions.

Günther Hörbst, Geschäftsführer von VIA Bremen

About the author

Günther Hörbst has been Managing Director of the Via Bremen Foundation, the location marketing platform of the logistics and port industries in Bremen and Bremerhaven, since 1 July 2016. He has also been Managing Director of the BHV (Bremische Hafenvertretung, or Bremen ports association) since 1 April 2016. Hörbst has a degree in political science, and has held a variety of management roles in regional and national media organisations over 20 years, most recently as editor in chief of transport journal Deutsche Verkehrs-Zeitung DVZ.

More information on the topics of maritime economy and logistics is available here or from Jörg Kautzner, cluster manager for logistics and automotive, tel: +49 (0)421 9600 324, joerg.kautzner@wfb-bremen.de

Life quality
25 April 2017
We love Bremen: seven declarations of affection

Bremen: Down-to-earth, yet always ready to surprise you. An attractive place to live, a city through which we can move easily and without stress – on foot along the river Weser, on two wheels through the many parks, or by tram through the city centre. People from different cities and countries tell us why they fell in love with Bremen and have made their lives here.

Investing in Bremen
20 April 2017
This 3D metal printing plant manufactures titanium and aluminium components in Bremen

Lighter, more bespoke and more intricate: for companies open to new ideas in manufacturing and construction, metal parts produced by 3D printers present an economic alternative to conventional die cutting, rolling and milling. Leading the way is Materialise, a company with its own metal printing plant in Bremen.

Investing in Bremen
18 April 2017
Bremen's twin city: from one port to another

Bremen has been twinned with the city of Dalian in north-eastern China since 1985. Find out more about the similarities and connections that the two port cities share.

Quality of life
13 April 2017
German champions from the city on the Weser

Up to now, cricket has been very much a niche sport in Germany. But that is changing. In Bremen, a woman is calling the shots in this male-dominated sport – with great success. Her men’s team are the 2016 German cricket champions.

Investing in Bremen
5 April 2017
Vision of the future – order picking with smart glasses and wearable computing solutions from Ubimax

Wearables and smart glasses provide hands-free digital information. A visit at the headquarter of the global market leader for Industrial Wearable Computing, Ubimax in Bremen.

Investing in Bremen
4 April 2017
At a glance: direct investments in Bremen in 2016

In 2016, companies invested a combined total of €229 million in the federal state of Bremen. Where do these investors hail from, how many jobs have they created, and what is their line of business? Our infographics provide an overview.

Investing in Bremen
21 March 2017
Forging a link between Bremen and China

The Chinese designer Haoyu Li combines his German design degree with Chinese business acumen. Now he is opening a design office in Bremen, with the aim of making it easier for Chinese products to enter the German market, and to bring German brands to China.

Quality of life
16 March 2017
Bremen – Germany's third-greenest city

The colours of the local football team are not the only thing that's green about Bremen, as you'll see when you take a stroll around its parks and open spaces. A look at the statistics shows that Bremen is not only Germany's tenth-largest city, it is also its third-greenest, offering plenty of space to enjoy nature.

Investing in Bremen
14 March 2017
Last orders before closing time: Start your own business now before Brexit kicks in

Keen to remain in Bremen? Then why not combine residency status with self-employment? Manuel Kühn from Bremeninvest’s welcome service knows all about how a start-up could allow British citizens to beat Brexit and kill two birds with one stone.

9 March 2017
Successes, comebacks and newcomers: Bremen holds the key to the gates of Europe

The high standard of logistical expertise in the state of Bremen functioned as a key to open doors, making this a successful year for Bremen. 2016’s successes were marked by automobiles and steel, welcoming ambitious international companies.

Investing in Bremen
7 March 2017
"We have the right solution for any enquiry" – why it's so easy for international companies to set up business in Bremen

From initial idea to successful move. Andreas Gerber, who heads up the international relocation team at Bremeninvest, knows what international companies need to do to set up a business in Bremen. Here he tells us about the most important steps on the ...

Quality of life
2 March 2017
7 reasons why business people quickly feel at home in Bremen

Hard facts take top priority when it comes to the choice of location for international or domestic businesses. But the faster we feel comfortable outside the workplace in the everyday routines and culture of a foreign country, the sooner we feel at home. In addition to trade, science – and of course its port, Bremen has plenty to offer when it comes to quality of life.

Automotive Industries
28 February 2017
The biggest car park in Europe

BLG LOGISTICS GROUP AG & Co. KG’s AutoTerminal in Bremerhaven is a record-breaking automotive hub. Every year, the terminal handles some 2.3 million vehicles. But that’s not all.

Creative / Media
23 February 2017
Co-working in Bremen - nine places where you can find a new office community

Going it alone is rarely an easy option. Co-working enables entrepreneurs to work in a shared space and experience the benefits and synergies that come with this. There are nine co-working spaces in Bremen – which one is right for you?

Welcome Service
21 February 2017
Cutting through red tape with our welcome service

Permits and authorisations, a mountain of applications and a language barrier too. These are just some of the difficulties you face when starting a business abroad. Luckily, an advice centre opened in Bremen in early 2015 that can help you through the jungle: Bremeninvest’s welcome service.

Investing in Bremen
16 February 2017
World Trade Center Bremen: everything under one roof

Geographical distance and cultural differences make it hard to relocate or start up a company in another country. Luckily, help is at hand from the team at the World Trade Center (WTC) in Bremen. They'll do all they can to make your international business a success.

15 February 2017
"Bremen has everything that a hub for the space industry needs"

In December 2016 ministers from the European Space Agency (ESA) member states met to determine the roadmap for the European space sector for the years ahead. Baden-Württemberg, Bavaria and Bremen submitted joint recommendations. In the following interview Dr Peter Vits, Bremen's State Coordinator for the Space Sector, talks about Bremen's strengths and opportunities.

14 February 2017
Take-off for Bremen: what makes the city a hub for aerospace expertise

The sky is not the limit, at least not in Bremen. All parts of the aerospace sector are represented in the city, from R&D to production. Aeroplane wings, Ariane rockets and Galileo satellites – Bremen is one of the leading locations in the international aerospace industry. Here are five factors behind Bremen’s story of success.

31 January 2017
“50 per cent of the exhibition space has already been reserved”

In 2015 Bremen won the right to host the International Astronautical Congress for the second time, after having successfully held the event in 2003. Its bid was the result of a collaboration between the Bremen regional government and Bremen’s space industry and space research sector. Event partners include the Federal Ministry for Economic Affairs and Energy and the German Aerospace Centre.

Automotive Industries
27 January 2017
E-mobility: why electric vehicles are on the up in Bremen

The Bremen region has long been a pioneer in electric mobility and is now set to enjoy further success after Mercedes-Benz and Borgward announced that they will be making electric vehicles in the city.

Automotive Industries
24 January 2017
Five reasons why Bremen is a leading automotive hub

Bremen knows how to make cars: the Mercedes-Benz plant by the Weser river has been in operation for almost 40 years, is the focal point of the city’s automotive industry and automotive clusters, and is now the company’s biggest global facility in terms of vehicle production numbers. Reason enough for an ever-growing number of suppliers and logistics firms to base themselves in Bremen.

Investing in Bremen
21 December 2016
Sigma Textil GmbH: how Muhammad-Farhan Aslam turned his father's business around

Sometimes you have to learn from other people's mistakes and trust your instincts. That is what Muhammad-Farhan Aslam believed when he took over his father's business. Not only did he change the business model, but he also shelved his own plans to move to England. Instead he stayed in Bremen. And it turned out to be one of many good decisions that he made.

Maritime economy and logistics
14 December 2016
The Cargo Distribution Centre (GVZ) in Bremen: a logistics hub with a bright future

For 30 years, the Cargo Distribution Centre in Bremen has delivered excellence – as an investment location and a logistics hub. Today more than 150 companies employing approximately 8,000 people are based at the site. It offers direct links to the ports, the autobahn and has a close proximity to Bremen City Airport.

Investing in Bremen
7 December 2016
Bremeninvest guidelines for foreign nationals setting up businesses in Bremen

Language barriers, unfamiliar legal and fiscal systems, qualifications that need to be recognised. There are many additional hurdles that entrepreneurs have to overcome when setting up a new branch or a new company in a different country. Bremeninvest is committed to offering you advice and support from the outset.

Investing in Bremen
1 December 2016
Innovative spinal surgery company NuVasive finds success in Bremen

You might expect a Bremen-based company specialising in innovative instruments and implants for spinal surgery to be located at the Technology Park. But you'd be wrong. NuVasive Germany GmbH has its head office at the heart of the city centre next to Wallanlagen Park. Now employing a team of 44 people, the company generates annual revenue of more than €10 million – a figure that looks set to rise.

Investing in Bremen
30 November 2016
Chinese LED business finds success in Bremen

David Zhou came to Bremen three years ago with the aim of conquering the market – and a new continent – with LEDs. He started his business selling LED lighting and electronics at the World Trade Centre at Bremen Airport and has gradually built it up over the past few years.

more articles