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Alan McKinnon – Professor of Logistics

THE 
LOGISTICS BLOG

Current issues in logistics and transport

A Logistical Perspective on Scottish Independence

A Logistical Perspective on Scottish Independence

The Scottish Government is planning to hold a second independence referendum on October 19 2023.  This depends on the UK government granting approval and/or the Supreme Court judging it legal. In the meantime, we can reflect on the logistical challenges that an independent Scotland would face.

A recent Scottish Parliamentary report acknowledged that ‘Scotland’s supply chains are closely integrated with those of the rest of the UK and globally’. Many companies have optimised their logistics systems across the UK as a whole, exploiting scale economies and the benefits of inventory centralisation. Capacity in warehousing, parcel and pallet hubs, ro-ro terminals and container ports has concentrated south of the Border, making Scotland dependent on England’s logistical infrastructure. 

Many UK businesses, however, distribute their products nationally on a uniform delivered price basis, not charging Scottish customers for the higher freight costs associated with peripherality. The main exceptions are parcel companies and online retailers that often charge higher rates for delivery to more remote Scottish post-codes.

In terms of freight movement Scotland is relatively self-contained.  In 2020, 89% of the country’s road freight was ‘intra-regional’ compared with an average of 63% in the English regions.  It might need to become even more logistically self-sufficient if, post-independence, a trade barrier were erected between Scotland and the rest of the UK (RoUK).

Such a barrier would have been created with the EU Single Market had Scotland become independent after the 2014 referendum and been forced to leave the EU, at least temporarily.  In 2016, Scotland voted overwhelmingly to stay in the EU and resentment over being ‘dragged out’ by Brexit-supporting English voters now fuels much of the support for independence. The ability to rejoin the EU is central to the case for separation.

On regaining EU membership, an independent Scotland would be re-integrated into the Single Market and Customs Union.  The formation of a ‘hard border’ with the RoUK could then require extensive customs and regulatory checks as 67% of Scotland’s ‘imports’ come from the RoUK and 62% of its ‘exports’ travel there.   In trading terms, Scotland is much more tightly coupled to the UK than Northern Ireland and has no equivalent of the ‘Good Friday Agreement’ to block the creation of a hard border.

In June 2022, Scotland’s First Minister, Nicola Sturgeon conceded that ‘there will be customs and regulatory issues on trade if we are in the Single Market’, but insisted that ‘the benefits of Scotland being independent far outweigh any of these challenges’.  This is reminiscent of the assurances made during the Brexit campaign that ways would be found to resolve border issues on the island of Ireland that have since proved vacuous. 

Logistics and trade issues did not feature prominently in Scottish independence debates back in 2014. Brexit has now shown how critical they are to changes in a country’s sovereignty and how intractable they can be.  If IndyRef2 gets the go-head, those campaigning for independence will need to spell out much more clearly how it will impact on supply chains and freight flows.

Logistics Manager  August 2022

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© Professor Alan McKinnon 2024

Kuehne Logistics University
Hamburg
Germany

contactme@alanmckinnon.co.uk

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© Professor Alan McKinnon 2024

 

Kuehne Logistics University
Hamburg
Germany

 

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Contact me

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