Steve Holmes, UK director of ShippeoSteve Holmes, UK director of European supply-chain provider Shippeo, warns that the transport distribution industry in the UK and the EU will be hit hard in the event of a no-deal Brexit
This article is the view of the author and not necessarily of Ready for Brexit
For months, years even, Brexit has been the topic of choice in newspapers, pubs and the halls of power, but as time has passed more questions than answers have arisen. The chances of leaving the EU without a deal is becoming increasingly likely and businesses across Europe are fearing the worst.
So what will a no-deal Brexit mean? The most obvious effect would be the huge loss of talent and in no industry is this more apparent than in the supply chain and logistics sector. The entire industry relies heavily on workers from across the European Union, with at least 25% of drivers, warehouse employees, and management coming from outside of the UK.
For an industry that is on the verge of a job crisis, due to the rapidly ageing workforce and the lack of local workers, the further loss of resources due to Brexit could prove crippling. Fewer warehouse workers to prepare shipments, fewer drivers on the roads to move the goods, more delays to deliveries, more unhappy customers. At a time when customers are expecting more speed, more efficiency, and better service while keeping costs to a minimum, a no-deal Brexit could result in the exact opposite.
A hard Brexit will see a hard border put up between the UK and the rest of Europe and without a trade deal in place or agreement on staying within the Customs Union, trade between the UK and its biggest trading partners could slow to a halt.
A hard border will result in companies facing increased checks at the border, increasing delivery times. Currently, goods exchanged between the UK and the EU do not require manifests, resulting in the relatively smooth transition of goods between markets – as one industry veteran Tony Smith from the International Border Management and Technology Association noted, currently the highly-developed UK borders are efficient at managing the flow of vast quantities of goods and people – a hard border will change this.
In the event of no deal in March, a new system for movement of goods would be required. A report from The National Audit Office, released last month, detailed how the border might work in the event of no deal and, in particular, what is not in place for such circumstances. The two greatest risks identified were security and the movement of goods. The report further noted the greatest challenge to implementing a new solution would be the lack of integrated customs and border systems. The sorts of systems required would need to include the ability to track goods and ensure provenance and destination for taxation and quality control, two processes that would require significantly more time at borders unless processes are put in place.
Should a hard border rise between the UK and EU, ports that are already at capacity handling the current, vast volume of cargo flowing through each day, would see significant tailbacks causing huge delays to shipments as customs officials struggle to monitor the movement of goods across the border.
While this is what happens in the UK, what happens at the borders in France and Belgium, is a process we have no control over. Delays and backlogs to movements could just as easily occur on the continent, as new processes and policies are put in place to govern the movement of goods to a market that has no official trade deal with the bloc. These concerns are obviously recognised by the UK’s key trading partners on the continent, as several EU countries have started to recruit additional border staff to handle the potential increases in administrative requirements.
Many within the industry believe that any deal, even a bad deal, would be better than no deal at all. Some sort of arrangement on how the UK trades with the EU would ensure the free flow of goods and services, keeping business running and customers supplied. The next few months will be critical in shaping the future of the UK. Deal or no deal, businesses must prepare for every eventuality and making smart investments now will pay dividends in the long run.
As organisations generate more data and increase their visibility across their entire business, by investing in technology, they will harness this data to drive efficiencies, decrease idle time, cut costs and improve customer service, helping to offset some of the impacts Brexit will bring. With only months to go until the UK leaves the European Union, despite the increasing uncertainty, the time to prepare is now.
