How technology can help your business prepare for Brexit uncertainties
‘Soft’, ‘hard’, or somewhere in-between; Brexit will have huge implications for the fresh produce industry. Border disruptions, logistical issues and skill shortages are all potential consequences and create new challenges for fresh produce businesses. While these outcomes are likely to be disruptive, it could be that technological solutions help businesses to mitigate any damaging effect.
As part of the EU, the UK sits within a free trade area, which removes the need for routine interventions such as customs and formalities checks at the UK border. This enables fresh produce businesses to operate ‘just in time’ supply chains, which help ensure their fresh goods get to the retailer on time and in good condition.
In a Brexit scenario, however, both the UK and the EU may have to apply new customs and excise rules to imported and exported goods. These rules are yet to be defined, but they could impose new tariffs, quotas and subsidies for fresh goods.
In the event a trade deal is struck, it is possible that current trade practices may be replicated; but if not, ‘third country’ trade rules would likely be applied which could cause massive disruptions at the UK border.
A government paper entitled ‘The response from business to the Withdrawal Agreement’ speculates that a ‘no deal’ scenario would drastically increase the time associated with importing and exporting goods between the UK and the rest of the EU.
“Lorries arriving at Calais will be subject to third country checks taking between 7 and 15 minutes, compared to less than 30 seconds at present.”
Increased checks could lead to long queues of lorries at the border, which would strangle fresh produce supply lines. For fresh produce businesses, this could mean wasted stock, increased haulage costs and damaged brand loyalty.
It could also dissuade suppliers from distributing their produce across the border and instead diverting goods away from the UK, which would reduce the amount of stock available to businesses thereby limiting sales.
While it is within both the UK's and the EU's interest to maintain frictionless trade and avoid these potential losses, businesses should be preparing for every eventuality.
For many companies, future-proofing means implementing an effective IT infrastructure; this best prepares businesses to ensure fast reaction and flexibility in the face of any potential changes.
With a dedicated ERP system, businesses can flexibly manage consignments by assigning any new tariffs or subsidies at the touch of a button.
Not only will this help ensure consignments of goods are properly spoken for, but it will mean businesses can account for any increased costs and adjust accordingly.
If customs and formality checks are introduced at the border, quick access to the necessary data will be crucial. With an ERP system, businesses can utilise a centralised administration system which integrates vital information such as inspection documents, invoices and transaction history.
It would also give businesses increased visibility over supply chain data; such as geographic information relating to goods as they move along the chain. This might be vital if traceability requirements become more stringent at the border.
Like all things Brexit, haulage arrangements post UK departure are still somewhat of an unknown. What we do know is that the government is working with the EU to ensure international freight flow can continue as normal.
However, considering 80% of haulage between the UK and Europe is undertaken by EU haulers, fresh produce providers should be preparing for logistical uncertainties.
While it is likely that the UK and the EU will negotiate a mutually beneficial agreement that keeps UK operations plausible for international haulers during a transitional period, a slew of red-tape in the future could dissuade EU haulers from making the journey.
Increased admin for haulers, which might be needed to replace mutually recognised EU documents such as operating licences, safety certificates and vehicle authorisations; as well as a lack of available EMCT permits (potentially necessary post-Brexit) could make haulage more difficult and therefore reduce available haulage services.
More-to-the-point, reduced trade between the UK and the EU, which may come as a result of Brexit, might dissuade haulers from transporting fresh goods across the border as they will not be sure of trade both ways.
This, in turn, will have a knock-on effect on fresh produce businesses who rely on road transport for their supply chains. The best cause of action is to implement computer-based systems that give providers greater visibility and control over their transportation practices.
With an ERP solution, businesses can have access to advanced transportation management systems that are able to optimise transport routes as far as possible. By tracking haulage requirements and managing loading slots and appointments, fresh produce businesses can be sure that their routes are adaptable to logistical challenges faced by haulage operators.
In this way, they can incentivise haulers by ensuring journeys are as optimal and profitable as possible; this means businesses can continue transporting their goods, thereby reducing any potential losses that might be incurred without logistical oversight.
Skill shortages caused by Brexit are an issue already being felt by fresh produce businesses. With the uncertainty surrounding Brexit, foreign workers no longer feel safe in the knowledge that they will have access to visa-free work permits.
“We employ around 160 full-time workers of whom 2 are British. I am having to invent work to keep them on over the winter, so as I can be sure I have a workforce for the next season.
-Jimmy Russo, Valley Grown Salads
With less workers to grow, pick, pack and manage production lines; businesses will need to look towards future solutions that help ensure production can continue efficiently.
To fill the labour void already being felt in the fresh produce industry, businesses should invest in technological solutions which automate certain aspects of the production line.
With computer based ERP systems, businesses can utilise modern packhouse and processing machinery. By doing this, businesses are able to read data directly from production equipment removing the need for manual entry, helping to reduce labour demands.
Mobile data capture, made available by an ERP system, gives businesses access to a centralised system of data by relaying details relating to items such as inventory, stock rotation, work pools and forecasting.
With operational oversight - navigable via a mobile phone, iPad or computer - businesses can reduce their reliance on excess labour and decrease admin overheads.
Brexit is looming, but it needn’t be the end of the world for fresh produce. By implementing computer-based solutions, businesses can prepare for potential outcomes while optimising their practices in a way that is robust, secure and future-proofed.