For corporations with international supply chains, 2018 provided many familiar challenges—from managing the impacts of fires and natural disasters on suppliers and logistics vendors to analyzing the risks that a merger and acquisitions (M&A) could lead a supplier to stop producing certain parts or components. But Resilinc’s 2018 EventWatch data and our qualitative analysis of supply chain issues affecting our customers reveal that highly fluid geopolitical issues— especially the U.S.-China trade conflicts and Brexit—posed some of the most potentially costly and disruptive supply chain impacts in 2018. And early indications are these will continue through 2019 at the least.
As this report was being finalized a few weeks before the March 29 Brexit deadline, Great Britain and the European Union had not reached a trade agreement. This meant that every company importing or exporting across UK/EU borders was facing possible new tariffs as high as 4.5%—multiplied by two or three for products that cross borders multiple times. And delays at new customs checkpoints threatened to derail finely tuned inventory management practices.