The ongoing brinkmanship of Brexit took another concerning turn with today’s decision to postpone planned debate of the British Parliament on the Brexit agreement now on the table.
A mere ten days ago we updated our Supply Chain Matters blog readers on the brinkmanship of Brexit providing added near-term supply and demand network decision needs. That same brinkmanship took on added dimensions today with a decision by Prime Minister Theresa May to delay this week’s debate of the British Parliament to adopt the negotiated Brexit agreement with the European Union. The action was taken because of fears of a certain embarrassing defeat for the resolution.
The Prime Minister indicated today that while there was broad support for the deal, the issue of the Northern Irish backstop remained a concern and she would return to renegotiate that provision with EU exit counterparts in an emergency session. Whatever that ultimately means.
She then warned those who wanted to leave Europe with no deal, to be equally honest on its impact upon the poorer areas of Britain. We would have hoped that such honesty would include the now stronger risk of industry supply and demand network disruptions that could wreak havoc for material movements and customer fulfillment.
Last week, The Wall Street Journal reported that global companies are currently stockpiling so many component parts, drugs, food and other goods that available storage space across the UK is literally running out. Available cold storage facilities have fast become extremely limited and total contracted out. Contingency plans noted in the report include supply management contingencies from major European manufacturers and branded companies such as Airbus, Heineken, Imperial Brands, Nestle, Pfizer and others.
The scenario of a “no deal” or hard Brexit, or even the possibility of another exit referendum vote seem ever more plausible at this juncture. This entire affair could extend right-up to the March 2019 trigger date.
Parliament’s rejection of the Brexit plan on the table risks an unprecedented political crisis that could lead to various indeterminate outcomes and implications for trade and commerce. A further possibility would be that the March deadline is blown, and multi-industry supply chain management implications extend later into the coming year. By our view, such implications would cascade to other global regions such as China and the United States seeking to ship product into or out of the UK.
The ongoing brinkmanship of Brexit will indeed be one of the notable supply chain management storylines of 2019, depending upon the Brexit political events over the coming weeks.
All of these last-minute Brexit developments bring to-mind those lyrics to the Don Henley tune: New York Minute: “In a New York minute everything can change.” In the current Brexit scenarios, anything can change with consequent industry supply chain disruptions.
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