Supply chains across the United Kingdom have historically encountered a number of issues trading with their European neighbours.
Back in the 1980s, stringent regulations and controls at the border created barriers for UK importers and exporters – adding a great deal of friction to just about every transaction. It heralded the need for businesses to have several alternative suppliers in place, as well as hold a lot more stock at any given time.
Problems were ironed out over time as the UK’s involvement with the European Union developed, effectively becoming part of much bigger market that enabled efficient and largely pain-free trade.
So when the UK left the European Union in January 2021, suddenly the challenging times of the 1980s came back to bite the nation’s trade. New regulations, enhanced costs and other newfound complexities plagued UK shores and continue to do so even two years after Brexit was made official.
In fact, according to FourKites data, shipments that cross the Schengen border were delayed 38% of the time in the last quarter of 2022. Plus, cross-border shipments averaged just 3.9mph, compared to 4.9mph for goods without crossings.
Add that to ripple effects of pre-Brexit stock building, the Covid-19 pandemic, labour shortages, frequent strike action, soaring inflation and the situation in Ukraine, and the need for a solution that adds resilience, flexibility and – ultimately – control to UK supply chains becomes very apparent.
East Midlands Gateway Campus
Despite the complications of Brexit and more, the UK remains a fundamental part of the European logistics puzzle. According to UK Parliament, the EU is the UK’s largest trading partner – accounting for 42% of exports (£267 billion) and 45% of imports (£297 billion) in 2021.
It’s therefore a key area of focus for logistics service providers in Europe catering to customer needs. With this, integrating supply chain operations and looking to ease the issues associated with UK trade in mind, Maersk has invested in a new centre of excellence: the East Midlands Gateway campus.
Integrating UK supply chains means connecting the dots of logistics for both import and export from one source. And as the campus is home to a 695,000 sq ft warehouse, a rail terminal operated by Maritime and soon a 14-acre container depot – all within the boundaries of a freeport – the infrastructure is in place to do exactly that.
It’s also paramount that an integrated solution is located centrally with good access to the UK’s five major ports (Felixstowe, Liverpool, London, Southampton, Immingham), the rail/road network and key airports – and East Midlands Gateway ticks that box, too.
The East Midlands Gateway campus is very much the perfect blueprint for optimising connectivity and flexibility within supply chains. Not only is it ideally positioned in the UK, but the vast infrastructure and cutting-edge technology across the site means operations on UK shores can be done from one place in the most sustainable way possible. It’s the epitome of two of Maersk’s key visions for the future: integrating logistics and reaching net-zero emissions by 2040.
Maximise revenue with supply chain control
UK supply chains have traditionally been somewhat rigid and one-dimensional in the past, with shipments sent on routes defined a long time in advance without much scope for flexibility in transit.
East Midlands Gateway allows customers to move goods into the UK at speed primarily, with the opportunity to make secondary decisions on future moves as market situations dictate. That means you’re able to avoid any bottlenecks that could slow shipments down at the time and ultimately reach the end consumer faster.
Such flexibility and control is the name of the game for East Midlands Gateway, as being able to speed up and slow down supply chains when needed can bring a clear number of business benefits.
For example, if you have a stockholding in the East Midlands Gateway warehouse, you can use its connectivity to respond to consumer demand quickly and get stock where you need it. Sales could be strong for a particular item in Italy, for instance, so with that information you can take dedicated air freight options from Birmingham, Heathrow, East Midlands or Manchester airports to get inventory on location at speed and maximise revenue.
At the same time, demand may not marry perfectly with supply and companies could be at risk of overstocking in certain areas without slowing down their supply chain. What Maersk is able to do at the East Midlands Gateway is draw out the process and hold containers until they’re required by the market.
Alternatively, given the campus’ connections, companies can once again identify areas of prominent business and divert their slowed down cargo away from the UK and into the hands of more favourable consumers.
Having a more free-flowing and integrated supply chain married with warehouse solutions adds flexibility to where cargo spends its time in storage, which could potentially save money on high Detention and Demurrage costs at ports.
Another key advantage to the East Midlands Gateway campus is the fact that it serves as a freeport zone in the UK.
Most goods imported into UK freeports are exempt from taxes, which means tariffs are only paid to the government if products leave the site to go elsewhere in the UK. If businesses need to re-export goods overseas, then they’re able to do so without UK duties being paid – avoiding the dreaded ‘double duty’ situation.
It also means that when goods arrive into UK airports or ports bound for East Midlands Gateway, they’re expedited immediately via rail directly to the campus without going through lengthy customs clearance processes.
This gives customers more predictability on cargo and gets it into storage as quickly as possible before starting its next leg from within the connected campus.
Doing it all sustainably
As sustainability becomes more of a priority for businesses and indeed end consumers, Maersk has ensured operations at East Midlands Gateway run in the most sustainable way possible.
The 695,000 sq ft warehouse itself was constructed to net-zero specifications and runs in the same manner. The ambition is for the connected container yard to also run with net-zero emissions, with electric reach stackers in the pipeline for the near-future to fully decarbonise operations.
The beauty of East Midlands Gateway integration is having so much infrastructure in one place, but physically connecting cargo across the site brings sustainability challenges of its own.
To combat this, Maersk is looking to utilise a fleet of EV trucks that will manage all internal traffic from the rail terminal, to the container yard, to the warehouse, to the depot and vice versa. Plus, Maersk will use the electric vehicles for final deliveries in close proximity to the campus – ensuring the green credentials and benefits extend beyond just East Midlands Gateway.
All of this adds up to an environmentally friendly set-up that not only supports Maersk’s ambitions to deliver net-zero emissions by 2040, but will also support companies’ individual sustainability goals that can translate into a commercial advantage.
While it’s difficult to predict where bottlenecks and issues will occur, optimising resilience, flexibility and control means you’re in the best place possible to minimise the impact on your supply chain when they do.
With East Midlands Gateway part of customers’ logistics operations, businesses have the flexibility to make decisions as market circumstances dictate and show resilience in the face of adversity from one connected hub - all the while being more cost-efficient and environmentally friendly along the way.
The UK is undoubtedly braced for a challenging year ahead in the logistics world, and Cara Haffey from PwC believes supply chains will be tested in a number of ways: “UK manufacturers are resilient by nature, however we face another 12 months where it’s likely that global supply chains will remain stretched and a string of pressure points will continue to spring up, from sourcing and purchasing to fulfilment and distribution.”
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