With the March 2019 deadline fast approaching, at the time of writing, the United Kingdom doesn’t have a deal with the European Union post-Brexit. The country seems to be in turmoil as to the best options available (if any!).
There is a danger that many people are experiencing a ‘Brexit overload’, with the topic regularly high on the daily news running order, but a smooth departure is critical to ensure the country doesn’t come to a halt. Many consumers don’t understand how integrated supply chains are with the European Union.
For many, a Brexit deal that is aligned with the EU for trade is the top priority, particularly due to the free movement of goods the UK currently enjoys with the EU. Others wish to ‘cut the cord’ from the European block and create new relationships around the world. Either way, the consequences of a ‘no-deal’ Brexit on the UK supply chain could cause huge issues in the short term. Trucks cuing to cross the English Channel has been witnessed previously with Operation Stack on the M20 when the port of Calais has closed due to strikes. It is possible that this could be a daily occurrence to clear customs on both sides of the Channel if no deal can be negotiated that mirrors the current customs union arrangement.
It has been published that some large businesses, including Mondelez who own Cadbury’s, are stockpiling to ensure that in the event of a ‘no deal’, they are able to continue supplying customers uninterrupted. Now, we don’t suggest that this is necessary or feasible for most businesses, but it is critical to understand your supply chain fully. You may purchase from UK based merchants, importers or wholesalers, who in turn purchase from the EU, therefore it is essential to know where these products originate from to understand the risk to you. You may think that ‘widget 123’ comes from a UK supplier, but you must ask, what components come from outside the UK?
We understand that your suppliers will not advise exact details of where products come, particularly if you order a large variety of SKU’s, but they will be able to advise if the relevant items come from the EU or not.
Whilst these are challenging times, the government has been warned by many businesses and trade organisations, such as the Charted Institute of Logistics and Transport (CILT) as to the ramifications of a ‘no deal’ Brexit. Indeed, the government have published detailed information what they believe will be the initial impact of ‘no deal’ on the freight and logistics industry. It isn’t pretty reading.
Even if a deal can be reach, there may be a requirement for customs procedures that don’t exist today, which of course adds the potential for additional resource requirements and increased costs.
It is good practice to regularly review your logistics and supply chain arrangements, but at the dawn of the country’s biggest change in decades, don’t leave it too late to ensure your business is Brexit ready, whatever the final deal (or no deal) may be.