A DECADE on from the Brexit referendum, and more than four years into the new trading reality, how has Brexit reshaped the way supply chains function? When Britain went to the polls in June 2016, the warnings from economists, industry associations and logistics bodies painted a clear picture of what frictionless trade, once removed, would cost.

Across APAC markets, supply chains are built around complexity from the outset – regulatory divergence is part of the operating environment, and parallel distribution networks are standard practice. In Britain, the post-Brexit adjustment towards this operating environment still feels unfinished. The structures are changing, but many businesses are still calibrating what the new normal, and future, looks like.

The cost of friction

When the UK finally introduced full border controls on EU food imports in early 2024, the disruption was immediate and documented. Manufacturers described a certification system built for slow, long-haul trade being applied to products with days of shelf life – creating immediate pressure on perishable supply chains and the grocery sector. It’s had a significant trickle impact on the UK consumer, with the London School of Economics and Political Science (LSE) estimating in 2023 that British households have paid £7 billion to cover the extra cost of trade barriers on food imports from the EU.

It’s difficult to surmise today’s overall impact of Brexit on UK consumers, retailers and manufacturers, especially given other global political impacts disrupting global food chains. Last year, the Food & Drink Federation reported that UK food and drink exports to the EU had fallen by 34 per cent since Brexit, and in May this year, research from the Energy and Climate Intelligence Unit indicated that by November 2026 retail food prices in the UK will have risen by 50 per cent since 2021. Previously, it had taken around 20 years for the last 50 per cent jump. These figures add up to a substantial repricing of cross-border business – one that flows through the supply chain and reaches consumers in the form of higher prices.

Brexit’s curbs on labour have also shaped the make-up of the UK logistics workforce. According to the University of Oxford’s Migration Observatory, EU nationals in payrolled employment peaked at 2.6 million in November 2019 and had fallen 13 per cent by end of 2024 – a loss of roughly 300,000 EU workers from the employed workforce. EU nationals now make up only 5 per cent of new visas granted since 2021, compared to 58% in the year leading up to March 2019. At the same time, labour costs have risen materially, adding pressure to margins and making automation an increasingly important tactic.

Behind those numbers, operators across the industry have reported that the EU workforce were some of the most reliable and productive labour they had. When those people left, it took years of accumulated skills and institutional knowledge with it, and the cost of rehiring and retraining fell directly on businesses. A new report from Logistics UK says 61 per cent of HGV drivers and almost half the nation’s warehouse managers are aged 45 or over – indicating that the impact is spread across logistics operations more broadly. With the domestic workforce ageing, and the pipeline of EU labour having narrowed, investment in automation has shifted from a cost-reduction exercise to a workforce continuity strategy.

The structural rethink

The deepest change, and the one most relevant to any business with both UK and European operations, has been the forced redesign of distribution networks. What had been a single European supply chain is now, in many cases, two. Retailers and manufacturers that once served the UK from a continental distribution hub – often in the Netherlands, which remains a key node for container inbound freight – are now asking whether they need dedicated UK-based capacity to deliver the lead times British customers expect.

This decision carries real cost. For businesses operating at scale, the question is a network optimisation exercise: how do you balance the cost of parallel infrastructure against border friction, lead time variability and tariff exposure? The Netherlands remains a strong choice for pan-European distribution given its container infrastructure and central geography.

Germany’s appeal as a DC location is more limited than it might appear. Beyond labour costs running roughly double those of Poland, businesses face added complexity through Germany’s Works Council system – elected employee bodies with joint decision-making rights on labour matters, which can drive up costs and cause operational disruption if the relationship with management breaks down.

Poland’s attraction goes beyond the headline labour rate. Distribution hubs are concentrating within 100 kilometres of the German border, and government incentives support new industrial investment. Despite annual minimum wage rises of 10 to 12% in Poland, Germany’s higher wage base means the cost gap between the two countries remains substantial.  

For any business with significant UK demand, a domestic distribution footprint is increasingly a strategic requirement. The days of serving the UK as an extension of a European network are, for many businesses, effectively over.

The race for space

This network redesign has had another unforeseen consequence for UK businesses: a race for logistics real estate. Supply chain restructuring has created urgent demand for UK warehousing at a time when available land is tightly constrained. Businesses that once served the UK from a single European hub now need dedicated UK capacity they didn’t previously require. More warehouses competing for the same finite pool of space has driven up demand in a market that was already under pressure. Across multiple projects, businesses are securing property and working out the operational design afterwards.

As demand continues to grow against a fixed land supply, the economics of multi-storey warehousing – long standard across the dense urban markets of Asia – will take hold in the UK. For businesses not yet thinking about their long-term property strategy, securing the right UK footprint now will be central to building a supply chain that can absorb whatever comes next

Finding a new footing

Viewed from outside the market, the UK is grappling with a supply chain ecosystem that has absorbed a structural shock and is now, gradually, finding new equilibrium. The disruption has been real and the costs substantial, borne by businesses, logistics operators and ultimately consumers. Supply chains, though, always adapt. Those best positioned going forward are treating the post-Brexit environment as a design problem, one that rewards clear thinking about network structure, location strategy and the right balance between cost and resilience.

But Brexit will not be the last disruption businesses have to navigate. The only certainty supply chain leaders can rely on is that the world will keep moving, and supply chains with it, as geopolitical instability, shifting trade policies and new pressures arise. The businesses that fare best are those who have invested in the right network strategy and scenario planning, building dynamic models that can adapt as conditions keep shifting, alongside process automation technology across their workforce and operations – all done ahead of time, before disruption hits. A decade on from the referendum, that is perhaps the most important lesson Brexit has to offer: don’t wait for the next shock to start thinking about how your supply chain would withstand it – start preparing now.

Tom Fitz-Walter, UK and EU managing director, TMX Transform