Over the past few weeks, we’ve looked at some of the most challenging issues facing shippers currently operating in EMEA (Europe, the Middle East, and Africa) or considering expanding into this region. And few issues present as much complexity or uncertainty for shippers right now as the UK’s upcoming withdrawal from the European Union (EU), an event referred to as “Brexit.”
Here’s a quick rundown of what’s happened so far. In 2016, the UK voted to leave the EU, with then-Prime Minister Theresa May triggering Article 50, which marked the start of the withdrawal, the following year. Since then, the planned exit date has been pushed back twice, with Brexit currently scheduled to take place on January 31, 2020.
That may or may not happen—and even if it does, it’s still unclear what Brexit will look like and what the fallout will be. Prime Minister Boris Johnson has managed to negotiate a deal with the EU, but the British Parliament has yet to pass legislation on it. Dependant on the outcome of the snap election on December 12, 2019, the deal may be passed, renegotiated, or rejected by parliament, so it’s difficult to predict whether a hard, soft, or no-deal Brexit is most likely. It’s also entirely possible that the ruling party may revoke Article 50 and cancel Brexit, or call for another referendum.
Whatever happens, shippers must start bracing for Brexit now. With so much uncertainty on the horizon, however, what steps can they take to prepare?
Avoid assumptions about how clients feel
For shippers based outside of the UK, Brexit may seem like a distant concept. In the UK, however, it’s a very real issue that people live with every day. Tensions are still running high, and the country is extremely divided in its outlook on the withdrawal. That means a misjudged comment can quickly sour a relationship with a client, so discussing Brexit is risky business.
To navigate this minefield successfully, shippers can benefit from adopting a neutral stance on the matter. It’s dangerous to assume that a customer feels a certain way about Brexit, even if they’re based in an area that predominantly voted one way. In Scotland, for example, every single council area voted to remain in the EU. Despite this, well over a million Scots still voted to leave, so it’s best to always err on the side of caution.
Prepare to make quick pivots
If a Brexit deal is passed by Parliament, shippers must be prepared to act fast. Customs duties may come into effect for goods moving between the UK and EU countries, and value-added tax legislation may change. Failing to account for this could result in an unforeseen spike in a shipper’s transportation spend.
Using a business intelligence tool like CTSI-Global’s Strategic Data can help shippers forecast the impact that Brexit will have on their spend and identify any challenges that they may run into. As the situation progresses, more information will become available, helping shippers further improve the accuracy of their forecasting. Data is knowledge—and even in the face of uncertainty, it can help shippers gain an advantage over their competition.
Re-evaluate service-level agreements (SLAs)
For shippers that have SLAs built into their contracts, Brexit may prove disastrous if they’re not prepared.
Take temperature-controlled shipments, such as medical stock and blood and tissue samples. Many shippers sign SLAs relating to the time-sensitive delivery of these goods. But since Brexit is expected to cause lengthy shipment delays, this may force shippers to pay higher shipping costs to ensure on-time delivery.
It’s a good idea to take stock of which SLAs are in effect now and evaluate whether they need to be renegotiated immediately. This can help shippers prepare for the worst and avoid nasty surprises later.
Follow the news—and pick a partner that does the same
Brexit might have been delayed, but shippers that drag their feet now will struggle to play catch-up when it matters most. Staying up to date with Brexit developments is the best way to develop an effective plan that can be quickly implemented should any changes come into effect.
At CTSI-Global, we’ve been following Brexit closely since the first murmurings of a referendum began. With a company-owned-and-operated facility based in the Republic of Ireland where Brexit could have an immediate impact on border control, we wouldn’t dare fall out of the loop—and we’re proud to help inform and guide our global partners during this uncertain time.
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