Logistics : The direct impact of Brexit on businesses
Exports from the UK to customers in the EU have come under pressure since the UK officially exited the EU’s single market and customs union. This is partly a consequence of new controls and procedures, which lead to transport delays and rising shipping costs. This raises important questions about how companies will adapt to this new situation, and how UK supply chains will restructure.
Nord France Invest helps British companies to set up in the Hauts-de-France region to pursue their business exchanges with the European Union. Nord France Invest’s services are completely confidential and provided to companies by the Hauts-de-France regional authorities. Contact us to learn more.
Saturated Market and logistics opportunities
Companies and traders in the EU and the UK are confronted with an unprecedented increase in red tape and restrictions to this crucial trading relationship. . Although the current disruptions in the flow of goods and services are far from unexpected, companies have no choice but to adapt.
They need to invest in developing their distribution networks within the EU, but it can be a challenging task. The consequence is that European territories are overloaded with British companies’ supply chain demands. UK businesses need long-term solutions to cope with the effects of Brexit, although it can lead to a saturation in property availability and workforce capacity.
But there are still some strategic areas in Europe which offer good business opportunities for British companies. The Hauts-de-France region, for example, has a wide range of latest-generation warehouses, large land reserves and an abundant and specialised workforce for logistics which have been attracting numerous British companies.
Read more: AFTER BREXIT: Adapting your business model
The impact of Brexit on EU supply chains
The logistics industry is likely to undergo 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.
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 the last year, 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, this is the third time in two months that the Honda plant located in Swindon had to be temporarily closed due to supply issues.
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.
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.
Do you face these hurdles? Let us find solutions that will best fit your needs:
Localization strategy amid an expanding warehousing market
Ideally located for logistics flows and every kind of transport management, Hauts-de-France has a number of competitive advantages.
Market access boosted by a strategic location
Setting up in the North of France opens up many opportunities for business development. Thanks to our strategic position, an investment here gives you quick access to your existing and future customers in the region, across France, throughout Europe and worldwide.
Access to a prosperous market within a 300 km radius:
- Locating here, you will be in the heart of a pool of 78 million consumers.
- Investing in the region implies access to customers with €1.5 trillion in annual disposable income.
- A strategic position at the heart of five greatly influential cities: Brussels, Paris, Amsterdam, Köln and Luxembourg within half a day’s truck drive.
- The only region in France that borders Greater Paris and also has sea access and an international border.
Hauts-de-France: a land of supply chain infrastructures expertise
Hauts-de-France is a prominent logistics hub for all of Europe with its strategic location and exceptional transport infrastructures, which allow for efficient circulation of staff and goods while optimising delivery time. Because we’re right on the English Channel, Hauts-de-France is a particularly strategic site for trade with Britain. Supply chain to and from the UK by road, rail or sea are highly likely to go through our region.
Optimise your shipping costs and maintain full control of your supply chain operations with a wide variety of transport modes, including:
- Air (with upcoming drone deliveries, from the E-valley site in particular)
- Inland waterway transport options.
Our major ports – Calais, Boulogne and Dunkirk – constitute a genuinely international infrastructure that can provide you with efficient and timely access to not only Southern European and world markets.
The region accounts for 10% of France’s total rail network. In particular, Dunkirk is France’s no. 1 rail freight hub, handling 13 million tonnes a year, or 11% of the national total.
The Channel Tunnel is the fastest and easiest way to carry goods between Europe and the United Kingdom.
Road transport is still extremely popular with the logistics industry, and our outstanding highway system gives you direct access to major European corridors. 12 highways run through Hauts-de-France, at the centre of a crossroads linking Paris, Brussels and London
Interested in learning more? Read our page on how to enhance your logistic strategy.
Competitive property costs for your storage needs
The Hauts-de-France region represents 23% of French real estate demand with 234,000 sq.m of demand placed in 2020. The most significant in this region is the development potential with 2.6 million sq.m to be built linked to a clearly favourable reception from local authorities who are releasing land. With 639,000 sq.m in 2020, an increase of 48%, the offer available within six months is still as strong as ever. Figures that place Hauts-de-France as the main development potential for the backbone of the region.
The region can count on large warehousing capacities, with both ready-to-use properties and land reserves with carefully controlled costs. For instance, having a 40,000 sq m warehouse in Dunkirk is 1.7 times less expensive than Rotterdam. So why not consider Northern France?
Access the full benchmarking tool here.
Available and competitive workforce specialised in supply chain
Hauts-de-France also has a large pool of available workers—over 70,000 jobseekers in logistics—so you can easily find the people you need to launch your operations. This is in stark contrast to labour shortages in many other European regions, in particular, Central and Eastern Europe, which have led to fierce competition for employees.
Northern France not only has a skilled and available workforce but also competitive salaries. For instance, a supply chain’ order picker in Dunkirk would cost 1.75 times less than in Rotterdam:
Compare up to 5 cities payroll cost per year here.
Ready-to-use implementation solution
A great example of what kind of services Hauts-de-France could offer is ready-to-use logistics hubs. In 2020, there were no less than 15 sites in the region.
The example of E-Valley
The entire site has customs approval which means E-valley enables established logisticians to avoid VAT and customs charges for all stored goods until they are re-shipped.
The purpose of Europe’s largest logistics hub is to help e-commerce companies operate as readily as possible. In addition to this considerable financial benefit, E-Valley offers advantages that are inherent to its geographical location in Hauts-de-France:
- 700,000 sq m of secure, fully equipped warehouse space in Europe’s biggest e-logistics park, with scalable units starting at 6,000 sq m.
- Bonded warehousing with deferred customs duties and VAT payments are deferred, allowing rigorous control of the cash flow.
- Fast access to major European roads: 1h to Lille and 2h to Paris via A1, 1h30 to Brussels and 3h to Köln via A2.
- Close to Europe’s largest ports (1h30 to Calais via A26, 2h to Antwerp via A2).
Ready to talk about your project? Let’s begin a customised analysis: