Logistics sector eyes ongoing Brexit boom as border chaos continues

As the Brexit deadline loomed at the end of 2020, a number of London’s listed logistics firms found themselves seeing a boom in business as companies scrambled to shore up their supply chains and stock up on goods in order to cushion themselves from any disruption.

While the chaos of a no-deal Brexit was avoided with a last-minute trade deal, the first weeks of 2021 have seen a steady stream of reports chronicling businesses struggling with a newly imposed customs regime between the UK and the continent that has left hundreds of lorries stranded at ports on both sides of the English Channel.

For example, two weeks ago retailer Marks & Spencer Group PLC () said that complex administrative processes resulting from Brexit, as well as tariffs on some products, were “significantly impacting” its activities in Ireland, France, Czech and supplies of Percy Pig, while angry seafood hauliers have staged protests outside Downing Street after being “tied in knots with paperwork”.

Despite these incidents, the worst appears to have so far been avoided at and the Eurotunnel terminal because of abnormally low traffic, however, the situation looks set to worsen in the coming weeks when freight traffic returns to usual levels and stockpiles begin to run out.

Hauliers are now being warned by the UK Cabinet Office that tailbacks at ports could increase as more and more lorries arrive without adequate paperwork, a Times report on Thursday revealed.

When combined with the new requirement for drivers to provide a negative coronavirus (COVID-19) test, this has the potential to exacerbate the chaos currently unfolding at ports.

“There could be more disruption as trucks come through that aren’t prepared with paperwork or drivers who haven’t been tested for Covid. There will be more issues. Then we could see some of these lorry parks starting to fill up,” Stephen Bartlett, chairman of the Association of Freight Software Suppliers, told the newspaper.

Freight managers could cash in

However, while the avalanche of additional paperwork may be causing a headache for many businesses, those involved in the management of freight could find themselves cashing in on the increased demand for their services.

AIM-listed () recently said its freight forwarding team was continuing to help businesses adapt to the new regulations, having also set up a new customs brokerage team at the tail-end of last year to handle what it said was “a likely increase in declarations whatever the Brexit deal outcome”.

This trend seems to have been reflected in the company’s share price, which has risen 17% to around 38p since early December.

Sector peer () also seems to be befitting, with the company saying in a…