Managing the cross UK and EU supply chain has been relatively straightforward. Many UK and EU based companies have built up complex intra-EU supply chains, accessing innovations for their business whilst benefiting from there being no tariffs, a low costs in moving goods across borders, and limited border delays. These characteristics may apply if the UK is no longer part of the europe union.
If the UK leaves the custom union then by default there have to be border checks -- or do you think that the UK can freely allow goods that don't pass it's standards?
. Businesses have to be ready for potential new duties on imports. How easy will it be to absorb additional costs? Can preferred specialist suppliers be easily replaced? Does this impact decisions on where key activities - like production - are performed? Will UK-EU distribution models exposed to paying duties more than once?
When the UK stops being a member of the EU, sales of goods between the two will become imports and exports for VAT purposes and UK businesses with pan-European supply chains may also miss out on VAT simplification measures that avoid the need for local VAT registrations.
Supply chain hubs and lead times will increase
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Let me explain this simply to you -- No deal Brexit means that the UK is out of the EU customs union, that it no longer follows EU rules and regulations on produce. This means that every item shipped across borders is potentially needed to be inspected.
Let's take a simple example of the automobile manufacturing business. The car industry is the perfect example of a business that has taken full advantage of the Single Market and Customs Union.
They source and manufacture parts and components for use in the manufacture of complete cars from anywhere in the EU without any regulatory hindrance or cost. Almost every part and component fitted to you complete car has made several EU border crossings on the way to becoming a little bit of the entire car.
Following a hard Brexit, crossings either way between the UK and Mainland EU are going to incur an additional cost in Customs charges and a short delay necessitated by checking of the documents and, in a few cases, an inspection of the load carried by the vehicle. The immediate impact will be delays in just-in-time deliveries which could lead to production line stoppages; but the long term affect until a firm agreement can be made between the EU and UK on its long-term trading relationship, is the increase in cost caused both by the Customs charges and the logistical delays.
These will make it more difficult and more expensive to manufacture cars in the UK. Plant stoppages are exactly what Toyota has said will hamper its manufacturing operations in the UK, but Honda has gone a step further in saying that its Swindon plant would be unviable following a hard Brexit. Nissan was the first car company to publicly express concern about Brexit. BMW has also made statements that it could, if necessary, increase production of the Mini in the Netherlands to the detriment of Longbridge; or it could also outsource more work, like the Countryman which is assembled by a partner company in Austria.
there are no British car manufacturers. All high-volume car manufacturers are global companies with headquarters in a particular country. They will all weather the storm, if necessary by relocating activities to other countries.
Japanese plants all over Europe are making cars for the European market. Put a financial and bureaucratic wall between the UK and the rest of the EU will make it more expensive to produce in the UK, so they will shift to an EU country.
you really ought to read :)
Coulda shoulda woulda. You are a GloBULList a$$w!pe.