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Firms reshore as supply chain problems multiply

[ April 5, 2022   //   ]

A Government Office for National Statistics report has admitted that supply chains are breaking down and stock levels are plummeting in the wake of Brexit and Covid and the Suez canal blockage, says ParcelHero.  

However, it adds that the problems could result in ‘reshoring’ and bringing manufacturing back to the UK to prevent stretched global supply chains finally snapping.

The broker says that Stock and Supply Chain issues in the UK reveals the full extent of manufacturing and retail problems and argues that manufacturers, retailers and their delivery and logistics partners will need to plan for a growth in reshoring.

ParcelHero’s head of consumer research, David Jinks says: “‘The report admits that: “Over recent years, the EU exit, coronavirus (COVID-19) pandemic, higher energy and commodity prices, and events such as the blockage of the Suez Canal have presented businesses with significant challenges when acquiring and maintaining their stock. As a result of these challenges, the UK has experienced increased business uncertainty, supply chain issues across a variety of materials and products arising from worldwide shortages, and rising inflation.”

He adds: “The report surely undermines the extraordinary claim by Jacob Rees-Mogg, Brexit Opportunities Minister, that Brexit is “already a success”, has been “extremely beneficial for the country” and that “the evidence that Brexit has caused trade drops is few and far between”.

However, he continued, companies interviewed for the report complained that they had had to build up stocks for the first Brexit and:  “The uptick in comments mentioning supply chain issues over the last three quarters indicates that businesses are continuing to struggle. The comments also show that this is a result of the current economic conditions, the UK’s exit from the EU customs union and single market, and other issues such as the coronavirus pandemic and general supply chain issues.”

Jinks added: “Now, however, UK manufacturing might be on the verge of a renaissance in response to these challenges. The manufacturing company Albert Jagger Engineering has begun reshoring its Antiluce fastener range back to the UK from China. It will see the business returning to its facility in Bloxwich for the first time since the early 2000s. The company says it is returning its manufacturing process back into the UK in order to improve control over every stage of the production line.”

‘“Fast fashion” has also responded swiftly. Ted Baker has introduced its Made in Britain range and, this year, Boohoo has learned from its previous supply chain woes and opened its own 23,000 sq ft factory in Leicester.

Returning manufacturing to the UK can reduce carbon footprint, cut lead times and delivery costs and ensure quality through continued monitoring rather than relying on samples, Jinks said.

He concluded: “The trade body Made UK says manufacturing is returning to Britain from across the world; 40% of reshoring is returning from China, over 30% from Eastern Europe and almost 20% is returning from India. It believes we are on the cusp of a fourth industrial revolution that could result in reduced labour content. This would mean the reshoring of low value items to the UK.”

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