The U.K. faces a logistics nightmare that could bring delays and shortages in essential goods after the country completes its exit from the European Union, reports The Wall Street Journal (Nov. 30, 2020). On Jan. 1, the free movement of goods across the English Channel is due to end for the first time in half a century. The change has sparked fears of severe bottlenecks at British ports and highways, where customs officers will inspect trucks amid an acute lack of staff that could rattle supply chains.
Some 10,000 trucks cross the channel on ferries each day, moving about half of all goods between the U.K. and the continent while dozens of daily sailings move freight mainly between Dover on the British side and the French ports of Calais and Dunkirk. The Port of Dover estimates that for every 2 minutes of delay each truck has to spend at the crossing, a 17-mile traffic jam will be created on the M20 highway heading to the port.
British supermarket chains that built distribution schemes on the assumption that products would go straight from trucks to store shelves are short of refrigerated warehousing, prompting fears that much of the cargo could spoil.
Bottlenecks could affect more than 30 car makers, including Honda, Toyota and Jaguar—companies that produce around 1.8 million cars every year in the U.K. The manufacturers depend heavily on JIT parts from the EU that go straight to assembly lines to produce many vehicles exported to the continent. Some manufacturers are looking at airfreight to replace trucks, a solution that would bring big new logistics costs on top of EU tariffs that could substantially raise the price of British-made vehicles sold in Europe.
Classroom discussion questions:
- Which of the 10 OM decisions described in your Heizer/Render/Munson text are affected by capacity issues like this one?
- There are 6 tactics for matching capacity to demand listed on page 312 in Supp. 7. Will all, or some of them, apply here?