The Potential Impact of Brexit on the Electronics Industry

February 19, 2019 | 11:43
The Potential Impact of Brexit on the Electronics Industry
The Potential Impact of Brexit on the Electronics Industry
With the cut-off date of the United Kingdom’s exit from the European Union rapidly approaching, politicians, industry officials and private citizens alike are still trying to assess the potential impact this unprecedented event will have on their respective fields. Due to the truly unique nature of the proceedings, even experts face a degree of uncertainty and confusion.

The electronics industry is an interesting example of the wide-reaching effects that may change the face of manufacturing, commerce and logistics. Uniquely positioned in that both its global production and supply chains are affected by many of the European Union’s laws and standards, the industry provides a good case on which to further assess the changes in store. So, come March 29, what changes can the electronics industry expect and what preparations would companies and customers be wise to make in the lead up?

Restriction in Free Movement of Goods
One of the European Union’s achievements is the single market – a market shared by all member states that seeks to guarantee the free movements of goods, capital, services and labour. Since it was founded in 1993, the electronics industry across Europe has been able to move products across EU borders without the need to consider customs.

In the event of a no-deal Brexit, meaning that no transitional agreement is negotiated between the UK and the EU, the UK will leave the single market and the customs union. There will be increased border checks, affecting both the administrative cost of doing business and the timeframe in which products can be moved.

For the heavily export-oriented electronics industry, this means that logistics for the production and supply chains will be greatly affected when producing or trading across UK borders. Mark Peers, President of SupplyPoint, a manufacturer of intelligent inventory management systems with facilities in the UK, is especially concerned with timings: “With Brexit looming and no concrete statements on what new procedures regarding customs and shipping will look like on both sides of the channel, there could be delays ranging anywhere from 1-2 days to 3-4 weeks. This uncertainty makes it difficult to plan ahead and we have had to consider a large number of scenarios to continue to effectively support our European businesses and customers.”

Manufacturers and suppliers who need to ship parts and products need to consider the shipping routes. If the United Kingdom is involved, prohibitive costs and delays may await. This is especially relevant when it comes to next day delivery, a service favoured by many customers. Electronics distributors with warehouses in the UK shipping to the EU and the other way around may find themselves at a disadvantage against competitors.
Next page 1/3
Loading comments...
related items