Irish exporters preparing for no-deal Brexit scenario
Future of Manufacturing Irish companies and exports continue to be highly sought after around the world. 2017 marked yet another record year for the Irish exporting industry with Irish goods exports exceeding €122 billion.
While the Irish exporting industry continues to be experiencing strong growth, concern over an increasingly uncertain global trading environment, higher operating costs and the perpetually impending impact of digitalisation, pose a number of challenges for exporters and their supply chains.
Irish exporters are building a no-deal Brexit contingency
The underlying challenge for this, of course, is the United Kingdom’s expected withdrawal from the European Union on 29 March 2019. We cautiously welcome the recent draft agreement by UK and EU negotiators on the Withdrawal Agreement and its proposals for a Single Customs Area and close alignment of legal and regulatory standards. In light of the UK’s internal political challenges, Irish exporters, however continue to step up their no-deal contingency planning.
In particular, contingency planning revolves around critical access to warehousing space and alternative transport and shipping routes to the European continent. Moreover, with customs declarations for UK-Ireland trade expected to increase ten-fold and have serious implications on just-in-time supply chains, a no-deal scenario is expected to be extremely detrimental to Irish manufactures and supply chains.
Storage space is crucial to the post-Brexit supply chain
Availability and access to sufficient warehousing and storage space is critical to the successful operations of many businesses in the exporting supply chain. Although, there is a move towards building new warehousing space, current and post-Brexit mitigating demand already greatly exceeds the supply available. For those considering increasing their capacity, knowing whether or not to press the investment button (in the light of increased uncertainty) is a very unenviable choice to make. This is especially true for cooled and controlled handling facilities at Irish sea and airports.
Barring any significant developments in the Brexit process, the UK will become a third country to Ireland and the EU for any and all aspects of trade and customs procedures at the end of the transition period.
It is clear that the Irish business community is taking note, as we have seen unprecedented interest in customs-training, AEO trusted trader status and alternative goods routing to the European continent.
Germany, France and Spain are most sought-after European export markets
In addition, IEA members are already strongly looking to access new exports markets. Germany is often cited as the top destination for diversification with other EU markets featuring prominently. France being third with 23%, Spain fourth at 19% and the Netherlands, Belgium, Italy and Sweden all appearing in the top-10. We are also seeing growing interest in English-speaking markets with the USA (27%), Australia (17%) and Canada (16%) all gaining popularity as well as high growth markets like China (10%), Japan (8%) and ASEAN nations (8%).
At the Irish Exporters Association, we offer a high-quality, two day course on efficient warehousing strategy and design to prepare exporters for all Brexit-related warehousing needs.