July, along with holding International Fried Chicken day (it’s the 6th in case you were wondering), was the busiest month in UK air traffic history in 2017. This year the unrelenting force of ‘us Brits’ after the summer sun and beaches we so unwaveringly hanker for will also create some tricky conundrums for freight forwarding and logistics providers around the globe. The UK is set for a busy a July and the freight forwarding community can expect the usual summer delays with plenty of people travelling not just by air, but by using ports and other roads to take themselves off on a relaxing around our pleasant isle.
However, busy doesn’t necessarily mean annoying or inconvenient for numerous hard-working practitioners. July, along with the beach goers and traffic, offers up plenty of topical discussion points for freight forwarding and logistics. Our old friend Brexit will, of course, with latest developments, customs deals/clearance regulations and the general round-up of what you need to know about.
These usual Brexit issues are complemented with issues regarding executive search not enticing younger generations, e-commerce’s impact on the 3PL market, how GDPR is going to affect the freight forwarding/logistics community, international volumes of cargo currently being shipped and supply chain visibility and management. These issues are currently shaping the industry in which we work within and the exploration of these may help you in the future.
Firstly, we need to head back to the old topic of Brexit. The countdown clock is ticking and whilst I have said in the past that speculation is a pointless exercise, with the latest developments we can go ahead and take an educated guess at the potential ramifications of leaving the EU. When it comes to customs Britain has a few options. These are a customs partnership and max-fac (maximum facilitation). The second of these arrangements aim to create as frictionless a customs border as possible, rather than to remove it altogether. This seems like a reasonable suggestion to cut down on litigation and build on existing schemes such as authorised economic operators. However, this is still believed to be ambitious due to implementing equivalent arrangements at its borders to make any such scheme a success.
The more judicious appears to be a customs partnership, which would mean is that, in practice, the UK would apply the EU’s own tariffs and rules of origin to all goods arriving in the UK that are intended for the EU. Whilst industry experts are aware this could indeed prove to be a tricky subject, it seems to be the preferred method of customs deal. A middle ground for us to reside within to appease many would be staying in the European Economic Area. EEA membership would require the UK to accept most EU rules as well as freedom of movement and could potentially allow for UK trade, made up largely by European freight and cargo, to continue to pass through almost unshaved.
But enough about the impending departure and on to a more set-in-stone form of freight forwarding topic that affects the way we work. Many freight forwarding practitioners are 40+ years old and the industry has started to cry out for a younger generation to continue to innovate the commerce. The UK and US have, in recent years, seen a recruitment shortage in a plethora of sectors across freight forwarding, and industry experts have pointed to the lack of young talent coming through the commerce as a reason for this. Various governing bodies have realised more youth-friendly apprenticeship schemes and ways for businesses to attract people from university or college at career days and other various events.
This is a positive step in the right direction, but perhaps shaking the unglamorous look that the commerce exudes, along with the expanding skillset requirement from certain sectors and the growing demographical gap within freight forwarding could spell continued trouble for attracting young talent. A lot of freight forwarding companies are starting to rely on family to run the company at board level, and if individuals don’t have the ambition or want to carry this on, then trying to find a replacement may be a hard task.
Lower-level in-house education on the industry, further industry collaboration, packages making the commerce an attractive place to work and a commitment to young talent are just a few of the inventive ways that employers could reshape the landscape of freight forwarding and ensure that the industry continues to grow with our youth.
Another way that could entice younger generations to freight forwarding and logistics could potentially be the incredible impact the e-commerce is having on volumes of cargo being shipped across the globe. It is evident that e-commerce is no longer an emerging technology and it has already conquered a major place in the heart of freight forwarding business. Cargo consolidation and multimodal transport, transhipment, packing, warehousing and distribution, arranging cargo insurance, documentation and customs clearance, payment of freight taxes, saved fax, phone and courier costs are all examples of the effect e-commerce has had on the industry and how this has given a layer of efficiency to many sectors. The scope and range of these benefits make it clear that e-commerce in the form of e-business processes and systems can have an enormous impact in terms of benefits to the entire supply chain.
Whilst e-commerce is established and positively impacting the industry, GDPR is the newest form of conflicting information and confusion hitting freight forwarders. Whilst the latest EU regulation has been talked about for some time now, and the US has had a similar data regulation in place for a while, business owners throughout the UK are starting to panic about what the potential impacts could be.
Establishing, with Brexit, that speculation within industries helps nobody, and it will only be after we see tangible change, either with businesses being fined or setting the bar for how we and our organisations look after the personal data of our customers, our staff and ourselves. This isn’t an issue that will go away due to it being a few months into its implementation. Practitioners throughout the industry need to keep an eye on it and become involved in the developments of it.
Whilst GDPR may be a fresh issue, international trade volumes are something that all freight forwarders need to continually keep an eye on. If you are looking at this in monetary terms then the share of international road freight transport in total was particularly high in Latvia (81.3 %), Slovakia (84.4 %), Luxembourg (87.5 %), Slovenia (88.4 %), and Lithuania (89.0 %). If you are working out of any of these Eastern European countries the next 12 months could be very interesting time, with the plethora of EU regulations, sanctions and any potential trade agreements.
Keeping abreast of the situation is vital to this. However, change isn’t necessarily a bad thing. International trade volumes have led to innovations being consistently being made to visibility and management of the supply chain being made. Numerous industry experts have pointed towards the disruptive nature of some of these developments, however, the application of disruptive technology has encompassed operating resources, and capabilities, developing new ways to satisfy customer needs. This can be seen as disruptive, but I’d rather see it as efficiency personified.