Covid pandemic — a forerunner for the impact of Brexit on consumers and the supply chain?

Scurri supply chain

Spend Matters is pleased to welcome this guest post from Rory O'Connor, founder and CEO of Scurri, Ireland-based provider of cloud-based software that connects and optimizes consumer online ordering, shipping and supply processes.

The Christmas holidays have always been a time for friends and family to come together, often in larger numbers than usual. But this year, constraints on travel and local health rules will force smaller gatherings in many parts of the world, and that will result in different festive spending patterns compared with years past.

Some apparel, fashion and luxury (AFL) companies may not survive the current pandemic while others will emerge better positioned for the future. Much will depend on their digital and analytics capabilities. And then there is Brexit.

Making each step of the value chain better, faster and cheaper

With the UK leaving the EU customs union and single market, new bureaucracy is on the way, whether there is a deal or not. From the EU point of view, the UK becomes a “third country” – we just don’t know whether it will be one where a trade deal is in place.

Therefore, now more than ever, supply chains need a smart, well-coordinated multi-carrier strategy. Capacity is tight, volumes are high, and peak season surcharges are unprecedented. But to truly optimize multi-carrier parcel shipping, shippers need to go beyond rating, rate shopping and label printing, and analyze their shipping data to answer the question: how can I get the most out of my carrier network?

At Scurri we have seen that digital optimization is not only an increasingly important sales channel but it can also help companies adapt cost structures and make each step of the value chain better, faster and cheaper. For example, digitization can enable new logistics and sales-fulfilment options, fuel innovative ways of customer acquisition, and help predict and manage inventory to create a more resilient supply chain. The fundamental enabler to all this will be data — the transparency, governance and accuracy of which have never been more important.

A deepening digital divide

This all portends a deepening digital divide. Even before the crisis, companies that were digitally and analytically mature outperformed competitors that hadn’t built robust digital and analytics capabilities. The Covid-19 crisis has only widened the gap between industry leaders and laggards. For leaders with the ability and willingness to invest, the pandemic has clearly been an accelerator. Many brands have accomplished six years of digital transformation within a few months' time.

Exponential e-commerce growth as a result of the pandemic has already pushed warehouses to the limits on providing space, but in some ways, this has been a test run for what is to come for Brexit and the new regulations that will be in place come 2021. Retailers don’t want to be caught out again, and have started putting preparations in place for a post-Brexit world to ensure adequate supply, warehouse space and consumer satisfaction.

Companies from EU countries trading with the UK will face a significant challenge in terms of new paperwork for customs procedures. Many have never exported outside the EU before so this is new and potentially expensive in terms of time and resources. Companies in the UK trading with Europe and the rest of the world will now have to make customs declarations for the first time as well. Although the retailer can do this themselves, this can also be handled by the carriers. Britain’s logistics industry estimates that 250 million customs declarations a year will be needed for EU trade.

Licences and certifications will now be needed to export specific products including but not limited to animal, plants, food and agricultural products. Businesses in the EU will now also be required to hold licenses and certifications to import specific products from the UK, so it’s important to check that any businesses in the EU you may be dealing with have these ready.

If businesses on either side of this process are missing customs paperwork or do not have the appropriate licenses and certifications in place ahead of the importation or exportation of products, consumers can be left facing delays on receiving items and also customs duties. For the first few months of 2021, consumers dealing with the UK importing from the EU or vice versa are urged to order early to ensure products arrive in a timely manner.

Is the answer – shop locally?

Throughout the pandemic, there has been an increased awareness around “Shop Local” campaigns. Many people think shop local only applies to the in-person shopping experience, but it also applies to e-commerce, especially as consumers have to be more conscious as both the holiday season and the UK departing the EU are fast approaching. Due to the pandemic, many local businesses have now begun offering online shopping for the first time. As well as this, shopping locally, whether in person or online, helps drive the local economy that the consumer lives in and relies upon. Shopping locally online can also help avoid customs taxes and delays for consumers as the UK withdraws from the EU.

Conscious-thinking consumers will realise the importance of shopping locally both in-person and online, and find ways to not only benefit themselves as consumers, but the economy as a whole.

 

 

Disclaimer: the opinions expressed are those of the author and do not necessarily reflect the official position of Spend Matters.

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