Brexit and supply chain disruption: what you need to know

Brexit and supply chain disruption: what you need to know

As the 29th March draws ever closer, a picture of what Brexit could look like is beginning to draw into view (i.e. unmitigated chaos). While much remains uncertain—particularly in terms of how the UK will exit the European Union—businesses should seek to clarify their own Brexit strategy to mitigate external confusion. Though the full implications of Brexit remain obscured, exiting the European Union may result in significant supply chain disruptions which in turn will affect your business, suppliers and customers. As if that wasn’t enough, these consequences could manifest in additional costs, compliance obligations and possibly delays. As a result, it is important that your business to consider and prepare for the impact of changes to customs and excise procedures, tariffs and rules of origin.

While there remains uncertainty over what any final Brexit deal might look like, if a deal is even reached, it is highly likely that Brexit will result in some supply chain disruption. This issue will primarily affect businesses trading goods with the EU, however, even those who do not should be aware of the potential impact on their suppliers or customers. Although the government will hope to reduce any disruption, businesses should be considering whether to take any steps to manage this risk.

The key risks to supply chain include:

  • changes to customs and excise procedures
  • impact of tariffs
  • rules of origin

In such turbulent times, it is tempting to look to other businesses for advice, or for a template of best practice. However, in the same way that no two businesses are the same, there are also no identical modes of handling Brexit—what works for one company may not work for another. As a result, it is vital to evaluate your own business to pinpoint specific areas of impact and those which require your most urgent attention. In this article, we examine the key risks to supply chain management as a result of Brexit and provide guidance for practitioners who need to re-evaluate their supply

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About the author:
Catherine is one of the Future of Law's digital editors. She graduated from Durham University with a degree in English Literature and worked at a barristers chambers before joining Lexis Nexis.