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Brexit: what is at stake for your supply chain?

Whether the UK exits the European Union in a hard or a soft way has an enormous impact on supply chains. René Falch Olesen, Group Chief Commercial Officer of DSV, weighs in on the subject.

What is at stake for your supply chain

Q: What are the likely Brexit scenarios now?

René Falch Olesen: There is too much uncertainty to make an exact prediction, but the possibilities range from a “similar-to-as-is” scenario to the hardest “UK-trades-under-WTO-rules” scenario.

A soft Brexit would mean that the UK continues to have close formal ties with the EU. It could look similar to what Norway has. A hard Brexit would likely see the UK give up full access to both the single market and the customs union with the rest EU.

The costs and consequences for logistics depend on which scenario we end up with.

Q: What will a hard Brexit mean for logistics?

René Falch Olesen: A hard Brexit will likely cause border delays due to duty collection and ensuring that documents are in order. The additional time will be costly, as will the duty itself. Administration costs will also be added to this. If the UK leaves the customs union as well, then import VAT may be payable.

With a hard Brexit, we may see that UK regulations and EU regulations diverge which may cause the need for import/export licenses. In other words, more costs due to administration.

A hard Brexit will likely cause border delays due to duty collection and ensuring that documents are in order. The additional time will be costly, as will the duty itself.

- René Falch Olesen

Q: What is DSV doing to prepare for Brexit?

René Falch Olesen: We are, of course, closely monitoring the situation while preparing to facilitate any changes for our customers. These types of changes will not be new to us, but they will be new to many of our customers.

We have created a Brexit Action Group, and we are liaising with authorities and industrial forums to be as prepared for any eventuality as we can be.

Action to prepare for a Hard Brexit