How will Brexit choke our supply chain?
From the see-saw of pricing strategy and service management to managing delays and customs clearance, there are a truckload of potential roadblocks between logistics companies and consistently efficient deliveries.
With Brexit looming, that truckload could be about to turn into a boatload. Day in, day out, parcels turn up on doorsteps and food appears on supermarket shelves, and it doesn’t happen by magic. It happens because of a logistics industry managing the intricacies of the supply chain; the scale and intricacies of which are about to be multiplied.
It’s easy to feel like Brexit talks are in a state of permanent stasis, which may have lulled logistics companies into a false sense of security. But there can be no complacency. There will be movement (or, in the case of supply chains, paralysis) sooner rather than later.
“The trading relationship between the UK and EU is hanging on by its fingernails”, said James Hookham, Deputy CEO of logistics industry leaders FTA this week, urging all businesses to “recognise the legal landmarks and the real risks to business continuity”.
A logistical nightmare
HMRC Customs Tariffs mean that all UK logistics companies have a responsibility to declare the value, duty liability and licence requirements of all goods they import or export. Of course, this is only the case when goods are entering the customs union — which has typically been only a marginal issue for UK businesses, since most goods are imported from within the EU.
Post-Brexit, British companies can no longer depend on low tariff requirements or rely on trusted emergency techniques that have so far served them so well within a united Europe.
Preparing for major disruption to post-Brexit supply chain and logistics strategies is therefore paramount.
AI-powered automation to steady the waters
With such a high volume of customs cases about to get a lot higher, manual processing will be like trying to drain a flood with a bucket. Most logistics companies are lucky to process even half of these HMRC cases quickly enough to satisfy their clients. The customs expertise required, meanwhile, is a sparse resource.
Automation that can scale such expertise and handle these cases at high volume could be the lighthouse to guide shipments through stormy waters. Achieving consistent decisioning across a number of stages — including (but not limited to) determining preferential trade agreements, identifying license requirements, interpreting tariffs, and finally issuing reports to HMRC — will overwhelm small teams of experts when cases increase. Of this we can be sure: the prospect of Brexit, in whatever form it comes, promises upcoming changes in legislation and increase in volumes of customs declarations to be filled.
With standardised automated decision-making across the HMRC Customs process, businesses can ensure they swerve disaster by applying best-practice expertise to each import or export declaration. When Brexit hits the fan, this automation of high volume cases will alleviate the pressure on customs experts by giving them more time to focus on the most complex cases — thus reducing the chance of blunders. Without the right technology in place, the process could very quickly become messy and unmanageable.
Lest we forget that this isn’t just a call to businesses. Efficient logistics are an essential pillar of British society. Without it, things could get ugly, and fast.
Whatever happens in the coming weeks — deal or no deal, extension or not — logistics companies are better off safe than sorry when Brexit comes knocking; not to mention the rest of us depending on them to deliver our basic goods.