Brexit impacts on global trade strategies
The results of the EU Referendum in June caused uncertainty and hesitation in the business community. However, moving from reactive paralysis to proactive preparation, the initial shock has passed and companies across industry sectors have started to come together to address their needs, discuss options, and prepare staff and operations for possible scenarios.
Industry events centring on Brexit impacts are currently in high demand, which not only indicates that uncertainty still prevails but also that awareness for the need to act has finally increased. It’s crucial for the business community to get involved and engage now in order to address concerns and prepare for possible impacts in all areas of daily business – now and in the long run.
On 11th October, AEB and the Chartered Institute of Logistics and Transport, CILT(UK), jointly hosted the conference 'Brexit – global trade compliance and export controls in dynamic markets'. Supply chain professionals from various industries took part, including automotive, aerospace and defence, pharmaceutical and medical, high-tech and electronics, machinery and engineering, and logistics. At the event, over 60 delegates discussed possible impacts of Brexit on export control obligations and compliance programmes.
60 UK businesses share concerns
As part of an anonymous survey during the workshop sequence, the conference participants also shared feedback on current risks, challenges, and opportunities for their business in light of Brexit. Interestingly, while Brexit appears to be on the forefront of UK businesses’ minds when it comes to current risk assessment, the challenges participants reported seem independent from it. Challenges cited are those that affect all businesses across the globe equally – regardless of latest local or regional global trade changes.
The greatest risks
As it turns out, delegates are quite concerned about the impacts of leaving the EU. 74% consider possible duties and taxes for goods and services imported from or exported to the EU as the greatest risk to their business at the moment. They are much less concerned about TTIP, for example, with only 7% considering it a high risk to not be part of this agreement following Brexit. Not having access to the EU Single Market ranks second in the list of highest risks, followed by “changes to UK export regulations” in third place at 49%.
The main challenges
When asked what they considered the greatest challenges for their company, half of all delegates responded that it was “Managing increasing complexity under cost and time-to-market pressures”. Evidently, this challenge applies on a global level and is relevant to all businesses struggling to digitise their business while keeping up with customer demands, competition, and innovations. The second greatest challenge was 'Gathering information from government agencies' - 43% of respondents highlighted the ongoing challenges in the constantly changing regulatory environment of global trade and export controls.
Areas of opportunity and investment
Last but not least, delegates were asked what they considered the main areas of opportunity and investment for their company. Changes to UK export regulations ranked highest (43%), while only 23% considered changing sourcing strategies and working with new suppliers. Also, 29% said that implementing appropriate tools that can adapt to global trade changes was an area of investment.
330 international businesses provide insights
AEB also carried out more extensive research as part of the annual research study 'Global Trade Management Agenda' in collaboration with the University DHBW in Stuttgart, Germany. This year, over 330 experts working in the areas of supply chain management, global trade, and logistics across various industry sectors provided feedback on trends and priorities in the upcoming year. And as part of this year’s results, 'Implementing changes to customs laws' was cited as an important or very important challenge for 2017 by 61.6% of respondents.
What’s most interesting here is that the Brexit vote did not produce any change regarding the assessment, nor did it heighten the perceived importance of this issue compared with the previous year’s results. It confirms again, however, that global trade is a highly dynamic area that is subject to constant change and new regulatory frameworks, which never ceases to present businesses with great challenges.
Perhaps one of the main lessons to take away is this: whatever happens, companies that are prepared and have the right tools in place to adapt to changes and to achieve agility in their supply chains will be better able to weather any storm – be it caused by Brexit or any other change in today’s dynamic markets and ever-changing global trade environments – and to keep a competitive edge. Also now is the right time to scrutinise processes, systems, partners and skill-sets to ensure the business can master upcoming changes – and to 'stock up' as needed while there is time to get ready.
