Another Brexit threshold approaches for U.S. retailers to consider
In the event of a “no-deal” Brexit, disruption to freight and aviation is likely to cause significant hurdles,
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As the Retail Industry Leaders Association (RILA) prepares for its annual Retail Supply Chain Conference later this month much talk is expected to be generated by global trade tensions and profound shifts in cross border dynamics.
Top of mind for U.S. shippers doing business in the EU will be the current state of BREXIT. Theresa May will update Members of Parliament on Tuesday about recent Brexit talks as she continues to seek support for her deal.
Absent such an agreement, logistics managers will face a whole host of new challenges, says Graham Parker, CEO of Gravity Supply Chain, a global SaaS company based in Hong Kong.
In the event of a “no-deal” Brexit, disruption to freight and aviation is likely to cause significant hurdles, he adds.
“A ‘no-deal’ outcome will mean no transition period which could result in limited transport permits and no agreement around aviation,” says Parker. “Businesses need to begin evaluating their existing supply chain models to prepare for potential supply chain disruption.”
For retail businesses, in particular, this will undermine the effectiveness of their speed to market, and potentially trigger a negative impact on customer loyalty, Parker maintains.
“Enterprises need to safeguard themselves on two fronts – firstly by ensuring the cost of operation remains manageable and secondly by reducing the likelihood of supply chain disruption affecting the consumer,” he advises.
According to Parker, real time visibility of the supply chain will be essential to achieving these goals. Fact based decision-making, informed by a consistent feed of real time data from crucial touch points across the entire supply chain, will allow businesses to react quickly to supply chain disruption, allowing them to overcome the strategic challenges that may arise.
“Retail organizations are already facing soaring rent, and changing customer expectations in the age of online retail,” he says. “Many retailers have invested in technologies that have enabled them to innovate, but a significant number are yet to undergo digitization in their supply chains.”
The impact of a “no-deal” Brexit outcome, presents a further threat to retailers, Parker concludes:
“Moving quickly from traditional and out dated manual processes, and into digitized management processes that enable essential real time visibility, will be crucial to companies successfully identifying, and subsequently overcoming, the logistical challenges.”
Meanwhile, RILA members have warned of immediate damage to their supply chains, while new trade barriers and higher costs after March 29 could eventually force retailers to rethink their business in the United Kingdom.
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]