Innovation UK

More than Brexit: UK innovation highlights

Get the latest on Brexit and what businesses can do. And a glance at dark stores and technology advances fuelling logistics trends in the UK.

While I feel a sense of responsibility towards writing my blog posts on the subject of Brexit, I am also keen to remind myself – and all of you – that the UK is much more than just Brexit. And we have some really exciting things going on at the moment – with great relevance for international supply chains. 

So you shall have both today: in addition to my obligatory Brexit update and how you can prepare your business, I will also share some altogether different developments taking place in the UK right now.

Latest from Brexit at a glance

The government speech

Prime Minister (PM) Theresa May held her long-awaited speech confirming further tangible information on Brexit plans, as reported by the BBC on 17th January. It was a simple and clear statement in line with previous announcements. The PM confirmed the following key points:

  1. The final Brexit deal would be put to a vote in Parliament
  2. The UK would not remain in the EU single market
  3. The government will push for the freest possible trade with EU member states
  4. Brexit negotiations are a key priority – this includes maintaining the common travel area between the UK and Irish Republic and “control” of migration between the UK and the EU
  5. It is still planned to serve notice under Article 50 of the Lisbon Treaty by the end of March

An association reaction

The same day, the UK’s Freight Transport Association (FTA) reported that the announcement still leaves freight forwarding executives with many questions:

  1. Will customs authorities reintroduce EU transaction border controls?
  2. Will the planned replacement of the UK customs system CHIEF go ahead as planned and will the new system be able to handle the millions of extra transactions?
  3. How will controls on dual use items be managed in the future?
  4. Final answers to these questions will depend on the next official steps in the process. And it’s crucial for the businesses community and industry associations to come together to engage on the topic.

The Supreme Court ruling

Of course, all of this was quickly overshadowed by the UK’s Supreme Court’s ruling against the government on 24th January, as published by the BBC:

  1. It ruled that Article 50 cannot be triggered without prior consent by both Houses of the UK Parliament. This means that the UK Parliament must vote on whether the government can start the Brexit process.
  2. The case was brought by campaigners against the government last year and argued that triggering Article 50 would overturn existing UK law and that denying the UK Parliament a vote on it was undemocratic and a breach of long-standing constitutional principles.
  3. While campaigners welcomed this ruling, the government commented it is not expected to delay outlined Brexit plans.
  4. We are now awaiting the Parliament’s vote and a new government white paper outlining further details on Brexit plans, processes and options, and timelines.

Brexit: What you can do now

What you’ve already done (right?)

  1. Engaged with your suppliers, partners, local associations, and government representatives
  2. Analysed alternative sourcing options to offset possible tariff and trade deal changes
  3. Assessed impacts on short, mid, or longer term cost across supply chain operations
  4. Analysed current global trade IT systems and applications together with integrated business partners to determine flexibility for managing new customs processes
  5. Included budget provisions for resulting measures starting 2017 financial year

What you can do next

Make your business processes and logistics systems as efficient as possible. It is all well and good to say “let’s wait and see what happens”. But if you are not starting from a strong position, implementing change will be far more painful and costly than necessary.

Take customs management, for example: current priorities should focus on ensuring responsible employees are identified and trained, and flexible software is integrated to manage regulatory changes and cope with volume increases.  If you are working with customs brokers or agents, engage with them to discuss how changes may impact your business, whether new requirements can be fulfilled, and ensure that a continued commitment to service and quality is in place.

These simple actions will support a far more robust approach to any “wait and see” strategy. Global trade is always on the move and it will not stand still waiting for Brexit to happen. Taking measures to prepare for Brexit will actually deliver immediate benefits in terms of efficiency and quality – and put you in the right position to keep your competitive edge if and when bigger change lands.

Beyond Brexit: UK technology trends in logistics

Moving on to less prominent but more exciting news from the UK, I would like to highlight developments in e-commerce logistics today. I find this area of particular interest for our SCMALLWORLD blog readers.

Quite ahead of the crowd, there are very modern concepts at work and in development in the UK at the moment. Online trade in the UK is booming. That’s fantastic as such, but it also brings about challenges to meet growing customer expectations and manage increasing volumes of deliveries efficiently.

Driving innovation, British traders, logistics service providers, and start-ups are coming together developing ideas on how to advance delivery processes. When it comes to drones, robots, and new concepts for same-day deliveries, for example, the UK is clearly among today’s global trendsetters.

The UK government supports innovation through government schemes and legal framework provisions. It grants businesses comparably much freedom for developing and testing prototypes within its regulatory frameworks in the respective areas, which strongly supports new advances.

Drone deliveries this year?

Online retail giant Amazon entered into a partnership with the UK government in July 2016. As part of this, the company received a special authorisation for carrying out drone testing within a defined scope. “The UK is leading the way in making drone innovations possible”, Amazon Manager Paul Misener explained.

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bitte einfügen. Abklären: Das Bild schon bei einem Artikel als Vorschaubild benutzt. Benutzen wir es trotzdem hier noch einmal?

The company promoted its first “Prime Air” drone deliveries in mid-December. The first orders were a TV streaming stick and a bag of popcorn – by two customers living close to an Amazon depot in the area of Cambridge.

Following latest tests, Amazon aims to officially start deploying delivery drones still in 2017.

Groceries online and dark stores

The UK is also leading in trading foodstuff online. Market volume estimates for 2016 amount to about €11 billion and by 2020, this is expected to grow to no less than €17 billion . Almost half of UK consumers purchase foodstuff online – at least some of it.

And according to market research from Mintel, one in ten UK consumers does not leave the house to shop for groceries at all anymore. It’s all done online – 24/7. That’s quite impressive – especially considering that in addition, all major supermarkets are also physically open 7 days a week in the UK.

Costs for delivery services range from free (if you spend a certain amount) to about €6 per delivery. Many providers also promote “green delivery slots” by offering discounted delivery services within certain timeframes based on consolidated deliveries in the area.

Most supermarkets also offer “click and collect” services for customers who prefer to pick-up their shopping themselves. Special refrigerated vehicles are currently used to hold goods for pick-up at designated collection points or to deliver them on the same day, the next, or on a specific date.

At the moment, many providers still manage online order fulfilment from within existing branches, warehouse, and distribution centres. This is expected to fully shift to so-called “dark stores” in line with shifts in consumer purchasing behaviour.

Last-mile delivery robots

Starship Technology, launched by the former co-founders of Skype, announced already back in March 2016 that the UK would be the first major country to host trials of its self-driving delivery robots – starting in Greenwich, London.

Its six wheeled intelligent robot was first launched in November 2015 and is designed for “last mile fulfillment”: local deliveries of goods and groceries directly to consumers. Travelling at slow speeds and with zero emissions, these robots use pavements like pedestrians. Limited to about 1-2 shopping bags, the delivery cost is about €1 per shipment.

The UK’s government clear commitment to development of autonomous and semi-autonomous vehicles not only makes the UK a world leader in new technology advances but also attracts businesses like Starship to launch new business models in the local marketplace. 

I find these are very exciting advances and justify the UK’s third place ranking in the Global Innovation Index 2016. We will certainly follow the developments in all areas and share all relevant trends with you.

I hope you enjoyed today’s insights from the UK beyond Brexit and I look forward to your comments on LinkedIn.

Take action to prepare for Brexit: Customs Management with AEB