Crypto News: Supply Lines: Brexit blues

Six years on from the UK's decision to leave the European Union, Brexit is still proving the biggest headache for British businesses, ranking even higher than Russia's war in Ukraine, Covid or rising energy costs.

Four in five UK businesses felt that Brexit had proved the biggest supply chain disruptor over the past 12 months, according to an Ivalua survey conducted by Coleman Parkes in August. An even higher proportion — 83% — think the worst is yet to come.

Almost a third of businesses said they had lost revenues as a result of the disruptions, estimating an average drop of around 18%, and around two thirds said they had either been fined or suffered reputational damage as a result of goods arriving late. The poll, released Monday, canvased 303 UK procurement managers at companies with 1,000 or more employees and revenue of more than £50 million ($60 million).

"These findings lay bare the significant toll of supply chain disruption on UK businesses," said Alex Saric, smart procurement expert at Ivalua, a cloud-based spend management company. "Supply continuity has been left on life support after repeated blockages and restarts, resulting in supplier failure and organizations struggling to on-board new suppliers to kick-start supply."

Delays and increased red tape have been a common complaint among businesses since the end of the Brexit transition period in December 2020, with businesses grappling with the costs attached to new supply chain friction.

Smaller businesses, though not surveyed, have generally fared worse, with thinner margins to absorb shocks and fewer resources to cope with the uptick in administration or a need to up-skill.

The mood among British businesses is of gloomy resignation: The survey found that more than half now believe supply chain disruption has become normal, expecting so-called 'black swan' events more frequently in the future.

The consequences of this are proving far-reaching, raising concerns of insolvencies across both businesses and their suppliers, as well as having an impact on innovation and product development, which businesses reported as lagging due to the disruptions.

For More on Brexit and the UK Economy:

—Liza Tetley in London

Low Battery Power | The UK is on course to botch the shift away from the combustion engine and end up a car-making minnow. Last week, mostly UK-based electric-van startup Arrival announced its CEO and president were stepping down. The previous week, the CEO of Britain's biggest auto manufacturer, Jaguar Land Rover, resigned after making little headway on an all-electric shift announced almost two years ago. And Britishvolt, the company thought to be the country's best hope for a homegrown EV battery maker, is struggling to stay afloat. It's a bleak picture in stark contrast with the US, where car and battery producers are being wooed with billions of dollars as President Joe Biden challenges China's dominance of the global EV supply chain. (Read the full story here.)

Worker protects | Turmoil at Apple's key manufacturing hub of Zhengzhou is likely to result in a production shortfall of close to 6 million iPhone Pro units this year. Separately, BMW sees further Covid-related lockdowns in China as a risk for next year.
Trucker strike | The South Korean government is considering issuing an order to disband a strike by truck drivers that has blocked ports and industrial complexes. The sides will continue discussions on Nov. 30 after their first negotiation on Monday didn't reach any agreement.
Clouding the outlook | Shipping giant CMA CGM said weakening demand for freight transport, elevated energy costs and gloomier economic prospects are hurting profitability this quarter.
Holiday sales | US retailers eked out modest growth over Black Friday weekend with deep discounts that lured shoppers seeking a reprieve from stubborn inflation.
Shifting ties | Canada is boosting military spending and expanding trade ties in the Indo-Pacific region as part of a "generational" shift in foreign policy aimed at building stronger ties with Asian allies and countering China's influence.
Countering subsidies | Time is running out for the European Union to resolve a dispute with the US over its massive subsidy program set to come into force in January, as the bloc weighs a series of measures to ensure European companies remain competitive.
Plowing ahead | For the top maker of farming machinery, demand to replace aging tractors and harvesters will continue outpacing the industry's ability to deliver because of fragile supply chains.

Room to fall further | Container shipping headwinds are building as China's October export figures tracked weakening global economic indicators. Coupled with record new capacity coming online in 2023, that suggests room for further rate softening before a turning point, Bloomberg Intelligence writes.
Japan's outlook | Japan's growth outlook for 2023 has weakened, a higher cost of living will push down household spending in the first half and a looming US recession will weigh on exports later in the year, according to Bloomberg Economics.
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