The logistics industry undergoing important changes as a result of Brexit, for retailers as well as logistics companies overall. This comes in addition to structural challenges for companies, with mounting pressure to reduce delivery time, shrink the environmental impact, be more flexible and control last-mile supply chain.
Examples of impact by sector
The UK is facing hurdles in several industries. For instance, the pig industry has asked the government for help after Brexit-related border problems and an influx of cheap European meat led to more than 100,000 surplus pigs in farms around the country. That has pushed the UK pork price down 12% in 2020, its biggest weekly drop since 2016.
UK seafood exporters are also suffering serious disruption to shipments to the EU, sending some fish prices plunging and prompting some fishing vessels to stay in port.
As for the car industry, in 2021, over the course of 2 months the Honda plant located in Swindon had to be temporarily closed 3 times due to supply issues.
The European Union, the United Kingdom’s main economic partner
The European Union will remain the UK’s largest trading partner in the foreseeable future, with its 450 million consumers. In 2019 the UK exported £294bn worth of goods and services to the EU, according to official statistics, representing 43% of British trade. Whatever government efforts to diversify export markets will take a lot of time before they materialise, a long transition period during which EU markets will remain crucial for UK companies.
Disruption at the UK’s largest container port, Felixstowe, has spread to other ports, causing holdups to critical goods entering the country.
Distribution to the European market from within the European Union
It is becoming increasingly clear for UK companies that setting up a company in the EU is probably the easiest solution for British companies to allow them to manage their supply chain in a timely and efficient manner. By distributing to customers from within the EU, UK companies’ export to the EU would be treated as a B2B operation, and therefore allow them to avoid additional taxes and tariffs, although they would still have to fulfil customs procedures and submit to controls where relevant.