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Ireland—the Answer to your Post-Brexit Supply Chain

Ireland—the Answer to your Post-Brexit Supply Chain

When the United Kingdom voted to part ways with the European Union (EU) two years ago, it opened doors for change, possibility and above all else, uncertainty. Due to ongoing negotiations around what exactly Brexit will entail, the shift has left brands across all industries guessing what the future holds for business — making planning for the next few years nearly impossible. Such unpredictability is impacting the supply chain significantly, which, as a rule, functions best with thorough foresight. While brands and suppliers are doing their best to mitigate the current landscape by shortening contracts — signing for months rather than years — companies will need a longer-term solution if they want to optimize the post-Brexit supply chain.

A significant obstacle driving this uncertainty is the potential installation of a hard border between the United Kingdom and the EU. Not only would this disrupt the fluidity that the EU supply chain benefits from, but it would lead to custom tariffs, added fees, increased shipping costs and extended lead times. Amidst the threat of these new complexities is a potential light at the end of the post-Brexit supply chain tunnel: a possible special exemption made for Ireland. While this has been agreed by all parties in principle, the final structure and process (likely to be complex) has yet to be agreed upon and finalized. If Ireland was able to maintain a soft border with the United Kingdom, it may potentially help the rest of the EU to navigate Brexit-induced complications and position the island of Ireland particularly well while the rest of the world is forced to make a new game plan.

Regardless of the verdict surrounding its borders, as Brexit looms closer, Ireland should be able to uniquely position itself to brands as a gateway to the United Kingdom—and vise versa. This role will be in high demand, especially with 60 percent of domestic volume materials (based on international delivery company DPD’s current volume) coming into Ireland originating from a UK source.

In the case that Ireland is able to maintain a soft border with the United Kingdom, brands currently stationed in the UK may be able to avoid tariffs, taxes, and fees by first shipping products to Ireland and then distributing through the rest of the EU. In turn, brands that conduct much of their business in the United Kingdom and want to reduce added costs can establish a distribution center in Ireland where products can be shipped before going to the United Kingdom. As brands make these changes, partnering with an international supply chain solutions provider like ModusLink can help navigate this transition. By leveraging ModusLink’s bonded warehouses and distribution centers already located in Kildaire, Ireland, as well as existing relationships with DPD and numerous other carriers, brands can more easily lay out a new route for their supply chain that works around roadblocks.

If Brexit negotiations implement a hard border, however, brands currently headquartered in the UK might consider relocating to Ireland in order to fend off collateral costs — an easier move than it may seem, given Ireland shares the same language as, and has a border with, the UK via Northern Ireland. While this would be the more complicated outcome, a global supply chain partner can help simplify the shipping and handling process by consolidating all products into a single shipment. This requires only one customs entry, which allows companies to reduce lead times, fees and individual administrative costs.

While Brexit has left many questions about future business unanswered, brands can rest easy knowing that any interruptions to the supply chain can be navigated with the right partner. To learn how ModusLink empowers brands to take on global complexities, download this brochure. For more information on the capabilities ModusLink has to offer worldwide, please visit our solutions page.

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