• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » How the U.K.-EU Trade Deal Impacts Supply Chains

How the U.K.-EU Trade Deal Impacts Supply Chains

May 5, 2021
Carole Welch, SCB Contributor

The United Kingdom completed its withdrawal from the European Union at the close of 2020, with a new free trade agreement passed just in time. The good: the agreement avoided an automatic default to World Trade Organization trading terms and ended a long period of uncertainty. The less positive: The deal comes with economic costs and logistical challenges for trading firms, and leaves some areas unaddressed.

The trade arrangement between the U.K. and EU involves a number of changes to customs practices, leading to additional challenges for exporters and importers across all industries. Atradius analysts predict that the effects of COVID-19, paired with new trade frictions, will cause a sharp rise in insolvencies in the U.K. in 2021, and a less severe rise in business failures across the EU. Industries that rely heavily on exports to the U.K. — automotive, high-tech goods and textiles, for example — likely will be more significantly impacted.

For most sectors, the main challenge is learning to operate within the complex new rules, requiring an additional investment of time and causing delays while businesses ensure that the correct paperwork is in order. This challenge, however, should be short-lived, as firms become more familiar with the forms and the process.

Additional checks on haulage may also cause supply-chain issues in the short term. The initial weeks following the start of the new arrangement saw delays at British ports, which were further exacerbated by travel restrictions due to COVID-19. While these conditions are improving, the impacts coupled with increased demand and escalating prices for shipping saw a materials shortage. Labor availability is also an issue, with fewer overseas workers in the U.K. 

While purchasing planning already factors in delays for non-perishable goods, sectors such as foodstuffs and animal products with new, more stringent import requirements will have a bigger headache working out the kinks. Other sector-specific concerns include:

  • In the chemical sector, business leaders have voiced concerns that the trade agreement will drive businesses away and cause repetitive animal testing. One chemical firm, for instance, has estimated that new U.K. regulations could cost the company £70 million.
  • For the U.K. paper industry, as the world’s largest net importer of paper, safeguarding the EU trade and supply chain is the critical issue.
  • Both the U.K. and EU had to make concessions on fishing rights, one of the keystone issues in the campaign for the U.K. to leave the EU. The outcome leaves areas of concern for the fishing industry, but allows the UK to increasingly regain control of its waters over the next few years.

Firms will no doubt adapt over time, but trade is not frictionless. Some businesses are walking away from Europe altogether due to the extra costs associated. Others, mostly larger firms, are moving EU trade to an EU-based subsidiary to circumvent these costs.

For the most part, the main upside to the trade agreement is that it maintains continuity of supply with the main supply routes and prevents the greater challenges that industries might have faced without it. Meanwhile, bilateral discussions continue to finesse aspects of the trade agreement.

The issues around new customs regimes should improve over time. Trade growth remains a possibility, especially when firms arm themselves with a strong risk-management strategy.  

Uncertainty still lingers, however. The longer-term impact of new complex rules for certain goods and quota issues remains at the center of ongoing discussions between the U.K. and EU. Until those discussions progress, it’s difficult to predict the long-term picture.

Carole Welch is corporate communications manager at Atradius.

RELATED CONTENT

RELATED VIDEOS

Global Trade Management Global Trade & Economics Regulation & Compliance
  • Related Articles

    The Path to an EU-U.K. Trade Deal After Brexit in 2020: A Timeline

    U.K. Proposes Broad Customs Deal With EU After Brexit

    Here’s How a No-Deal Brexit Would Shock Virus-Hit U.K. Companies

Carole Welch, SCB Contributor

More from this author

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • DOCUMENTS BEARING THE INSIGNIA OF US CUSTOMS AND BORDER PROTECTION LIE ON A TABLE

    New CBP Regs Call for Greater Diligence by Brokers in Reporting Security Breaches

    Freight Forwarding/Customs Brokerage
  • A WORKER IN A WAREHOUSE, SUPERIMPOSED WITH GRAPHICS SHOWING SUPPLY NETWORK

    Enabling Intelligent Visibility With Supply Chain Analytics

    Data Management (Big Data/IoT/Blockchain)
  • A HAND TURNS A LARGE, LIGHTED DIAL WITH THE WORD RISK ON IT iStock-NicoElNino-1364371014.jpg

    Measuring KPIs and KRIs for Comprehensive Supplier Performance Management

    Technology
  • GSCMS-Promo.png

    Watch: Introducing the Global Supply Chain Marketing Summit

    Education & Professional Development
  • A COMPLEX SERIES OF ROADWAYS AND RAMPS, SEEN FROM HIGH ABOVE, IS PARTLY SHROUDED BY CLOUD

    Supply Chain Visibility Isn’t Just a Catchphrase; It’s an Imperative

    Logistics

Digital Edition

Scb nov 2022 sm

2022 Supply Chain Innovator of the Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing