Brexit has consequences for logistics, but offers opportunities for those who are well positioned. Sonja Holz deals with the Brexit every day in her capacity as Director of the Customs & Trade department at Arvato Supply Chain Solutions. We asked her some of the most important questions relating to the UK’s exit from the EU.
1. Sonja, Holz, do you still believe in an orderly Brexit?
No, based on the current status of negotiations, we at Arvato Supply Chain Solutions expect a “no-deal Brexit.” Many of the controversial aspects would still be unresolved even after the UK leaves the EU, and would need to be regulated at a later point in time. We are therefore focusing on ensuring that we can still fulfill our contractual obligations toward our customers in the future – and at the same level of quality and with the same commitment as before. I am confident that we will be largely successful in achieving this. After all, we have used the past months intensively to prepare ourselves well for the big day.
2. More bureaucracy, significant delays and greater expenses – a disorderly Brexit will pose a huge challenge to many companies. Where do you currently see the largest difficulties?
In the very international logistics and transport sector, we already have to deal with extremely complex processes and products that are usually strongly intertwined with other economic sectors. This situation will become more severe after a hard Brexit, because instead of referring to laws and procedures we will be working with emergency plans that are frequently hastily cobbled together by politicians responsible for the situation. The necessary rules must be made on the basis of assumptions – at least at the beginning. This leads to more complexity, and with it, the danger that we will encounter chaotic situations, at least in some areas.
3. How can we minimize the related risk?
By not focusing only on negotiations between the EU and the UK, but rather by looking at the situation in its entirety, that is, both the export and the import side. Whereas many companies are still waiting to see how the situation develops, we are already – for example, in the case of reseller businesses – reviewing the regulations in the third country and are verifying the secondary legislation. Which standards have to be met in Russia? What are the customs regulations in Switzerland? Which agencies or administrative bodies have responsibility in China? In terms of information, this forward-looking strategy gives us an important head-start over the competition, which we can use to our customers’ advantage.
4. Is there any positive aspect at all to a disorderly Brexit?
Brexit will primarily create many losers, but in reality, also a few winners. This will probably include logistics companies that, in addition to their expertise in the core businesses, also have know-how in customs matters. If they can use this combined knowledge to the benefit of their customers, it can provide a major competitive edge. After all, products and merchandise are not transported just to the border, but also beyond. What good is the best logistics service if the shipment gets stopped at the border because customs regulations were not observed? Competence in international transport matters is therefore a good basis, but an international customs network is just as important. We at Arvato Supply Chain Solutions are very well-positioned in both areas. That's why our customers can be sure that they are in good hands with us.