Brexit is a subject of a heated debate both in the UK and the EU. Business owners who want to sell and buy products need to plan ahead and find solutions that work regardless of what the outcome of the new deal will be. Wincanton, a transport and warehousing business operating in the UK and Ireland, in cooperation with PwC’s Supply Chain, analyzed three post-Brexit scenarios and now offers to clients the opportunity to model what their supply chains could look like when the UK leaves the EU next year.
The planning includes gathering information that would help plan budgets for post-Brexit operations as well as assess the impact of potential supply models and how they could affect future relationships with suppliers.
PwC believes that there are three outline scenarios:
– a ‘high alignment’ deal building on the proposal in the White Paper,
– a ‘low alignment’ deal, building on the EU-Canada CETA agreement,
– and ‘no deal’ which means a comprehensive agreement is not reached and the UK moves to a default WTO trading relationship.
PwC’s analytical tools allow modeling of the cost impacts of different scenarios in complex supply chains – both from a trade and customs point of view and in terms of operational costs, allowing clients to understand the full cost impact of different supply chain structures for different Brexit scenarios.” – comments Johnathon Marshall, Partner, Supply Chain and Brexit, PwC, for Trans.INFO.
The models are based on legal documents as well as a thorough analysis of the possible consequences of the three scenarios based on PwC’s intimate understanding of Brexit.
At Wincanton, we are working with PwC’s Supply Chain practices to model a number of scenarios including “no deal”. It’s based on a mixture of what we know and what we expect to happen, from published documents and logical extrapolations of their consequences,” comments Marcos Hart, Group Transformation & Risk Director at Wincanton for Trans.INFO.
The operators should prepare for additional costs
Across Europe, freight rates have increased over the last few years. Strict regulations, lack of drivers and wage increases introduced by some operators to attract qualified employees, are some of the factors that impact the developments on the market. Now, carriers on both sides of the English Channel will have to plan for new expenses linked to longer waiting times at border controls.
“At Wincanton, we believe [higher costs] are certainly possible, given the expected queues at border controls, for example. If a truck and a driver are not moving, not delivering against a paid-for schedule, then they are not making profitable revenue, they’re just burning costs.” – says Marcos Hart.
“Politicians need to strike a deal”
Richard Burnett, Chief Executive of the Road Haulage Association(RHA) warns on the organization’s Tweeter account, that Britain is facing a “no deal” scenario in which it has no terms of access into Europe. In addition, Eastern European workers, who have been “underpinning the haulage industry” in the UK, might leave due to the potential need for work permits and the weakening pound.
E. European workers have been underpinning this industry. With potential for the need for work permits and the weakening pound mean that it is not such an attractive proposition to work here, warns @MJRReid on consequences of #NoDealBrexit @scotonsunday @TheScotsman #Scotland pic.twitter.com/baf0yjhItG
— RHA News (@RHANews) August 13, 2018
Supermarket executives estimate that food bills might go up by as much as 12 percent if the there is no agreement between the EU and the UK, reports the British daily, The Time. Marcos Hart, Group Transformation & Risk Director at Wincanton, also stresses the need to work out a deal and points out to the difficulties that carriers who supply to supermarkets might face in the future.
At Wincanton, we believe that both the EU and British Government need to work out the impact on the transport industry, which in turn impacts the whole supply chain, where both food and medicines are concerned. It is said that there are only six days of food in the UK supply chain, and even less for some medication which makes this a very serious issue,” – says Hart for Trans.INFO.