As we pen this Supply Chain Matters blog posting at the close of the first week in December, negotiators have yet to reach an agreement relative to terms of the United Kingdom’s departure from the European Union trade block.
The latest reports indicate that yesterday, negotiators from both sides had concluded that “significant divergences” remained following a week of intensive talks. Three areas remain as points of contention including fishing rights and how the agreement is enforced
While actual negotiators are in pause, UK Prime Minister Boris Johnson and European Commission President Ursula Von Der Leyen were scheduled speak today and try to break the ongoing post-Brexit trade deal stalemate. Chances for any detailed deal being made are now pegged at 50-50.
This week, officials at the Port of Rotterdam were handing out pamphlets at the ferry terminal to inform truck drivers as to how cargo will transit among both regions on the 1st of January. A published Bloomberg report described a port official as indicating that “It’s (hard Brexit) really going to happen” and that: “We once again are calling on companies to prepare properly.” Ports are already planning for staging areas where trucks lacking proper documents are to be staged, while Rotterdam port officials have indicated that will only allow trucks with inadequate paperwork or customs authorization 24 hours of parking and then they must leave.
In our highlights of November’s published manufacturing and supply chain indices, we noted that the IHS Markit/CPIS UK Manufacturing PMI® reflected a 35-month high value of 55.6 in November after an ebb in momentum reported in October. The authors pointed to rising levels of input purchasing and raw material stockpiling related to end-of-year Brexit stockpiling among customers across Europe as fueling November activity.
Indeed, the political process in determining Brexit trade practices has exceeded the lead times for overall logistical and supply network planning. UK and European supply chain management teams have little choice but to assume worst case scenarios and execute contingency plans, in addition to factoring the added disruptions and worker shortfalls related to increasing COVID-19 infection rates and consequent restrictions among various European regions. This especially concerns aerospace and automotive supply networks.
The start of the year 2021 is not likely going to be lacking significant disruption.