And it’s not just British businesses that will be affected. One study revealed that a whopping 63% of EU businesses that work with UK-based suppliers expect to move some part of their supply chains out of the UK. For example, in a 2018 interview with BBC Five Live the European boss of Honda, Ian Howells, gave an example of how Brexit would affect their supply chain:
In essence, a tariff is a border tax charged on foreign imported goods. Currently, British companies can buy and sell products across the EU tariff-free due to the EU’s customs union. However, after Brexit takes place the cost of customs declarations and rules-of-origin checks will rise for UK imports and exports. This will result in significant supply chain cost increases for many businesses.
Congestion caused by a longer customs process are likely to result in massive delays. Experts predict a five-fold rise in customs checks, with customs declarations at Dover and elsewhere estimated to increase from 60m to 300m a year, and it is estimated that some 10,000 lorries may be held on Kent roads alone on a routine basis if there is no deal. According to a CIPS survey, customs delays of just 30 mins could bankrupt one in ten businesses.
Recruitment and Staff
Stricter immigration laws will make it more difficult to hire foreign workers to work within the logistics and supply chain industry in the UK. As Sally Gilson, the Head of Skills at the Freight Transport Association (FTA) succinctly put it:
Currency rate fluctuations and volatility could increase the costs of raw materials and supply chains.
1. Shared Language
Post-Brexit, Ireland will be the largest English-speaking state in the EU.
2. Retain Access To The EU and The Eurozone
As a fully committed member of the EU and the Eurozone, Ireland has access to free trade with 27 EU states and has a further 53 EU free trade agreements across the globe.
3. Side-Step Customs and Excise
By aligning with an Irish partner when distributing past the UK, businesses can avoid the costs and delays caused by added customs and excise demands.
4. Irish Law Is Similar To UK Law
As the Irish legal system originates from the British one, there are major similarities between the two. This facilitates Irish business operating in the UK and vice versa.
5. Lowest European Tax Rate
Ireland has a 12.5% corporate tax rate, which is the lowest in Europe.
- Define your supply chain needs, challenges and risks in relation to Brexit.
- Based on these, outline the criteria you look for in a distribution partner.
- Assess the location and reach of the provider.
- Look at the variety of services offered and assess whether these meet your needs.
- Learn more about the prospective provider’s track record with clients of your size.
- Reflect on whether they have the ability to seamlessly integrate and take over your logistics function.
- Find out if they are committed to continuous improvement and technological advancement.
- Ask about the steps they have taken or are planning to take in preparation of Brexit.
Liked this article? Why not check out our guide, “Brexit’s Impact on Retail”.