Implications of Brexit to the Logistics Supply Chain in Europe - Research Proposal Example

• • • • DISSERTATION PROPOSAL

1. Your Name:

2. Student Number:

3. Email address:

4.Title

The Effect of Brexit on Logistics Supply Chain Inbound and Outbound

5. Aim

To study the inbound and outbound implications of Brexit to the logistics supply chain in Europe

6. Objectives

1. Study the literature on the significance of EU membership and the implications of such membership on trade. (November)

2. Research on the pros and cons of trading within the EU both as a member state and non-member state by interviewing logistics experts. (December)

3. Conduct a critical analysis of the literature studied and interviews conducted and record the impacts of EU membership on logistics. (February)

4. Draw a conclusion on how Brexit impacts inbound and outbound logistics for both the UK and other EU member states. (April).

• • • • 7. Rationale

In June 2016, British voters voted to cut its ties with the European Union (EU) sparking a lot of debate across the region regarding how such a move can be fulfilled and the likely implications it might have for citizens and member countries of the Union. The likely impacts among all member states are divided as to whether Britain’s decision is wise or it spells disaster across all other member states. Nonetheless, the implication of Brexit on the regions logistics will be immense taking into consideration the amount of goods that are imported into the UK from EU member states as well as exported from the UK into these countries. For instance, 44% of all of the UK’s exports before Brexit were to the EU; however, the figure is set to reduce significantly. For the logistics industry, a direct implication is the reduced demand for logistics services. Another issue is the freedom of movement and customs and border controls. From the trading point of view, benefits of EU membership include removal of trade barriers, higher levels of competition in services, reduction of business costs and elimination of cartels and monopolies. Therefore, for the logistics industry, it is important that research is conducted from a neutral point of view taking into consideration the views of each member state in order to correctly advise on the implications of Brexit on the logistics supply chain of Europe.

• • • • 8. Literature Review

According to Puertas et al (2014, p. 467), one of the underlying rationales of forming the EU was to facilitate free movement of capital, labour and goods/services. Therefore, part of the project aimed at completing the European internal market entailed harmonising trade laws especially by creating the EU company law. As D’Aleo and Sergi (2017, p. 642) explain, harmonising trade laws involved the elimination of administrative and technical barriers, such as unnecessary restrictions in Europe’s transport system that hindered the seamless flow of traffic and trade. Equally importantly, it entailed the streamlining of differences in national transport policies that distorted competition for the member states. In support of the view by Puertas et al (2014, p. 467), Oberhofer and Dieplinger (2014, p. 236) add that the ultimate goal of a single European market was to create a unified European transport infrastructure to help Europe remain competitive. According to Albornoz et al (2012, p. 17), the only way to remain competitive was to optimise the performance of the whole transport industry for the benefit of all traders. It follows, therefore, that the logistics industry and especially freight forwarding companies will be affected the most by the exit of one or more countries from the bloc. For example, Turrisi et al (2013, p. 565) point out that the exit of even a single member will create barriers for the administration of both inbound and outbound logistics, the implication of which is stricter border controls, laws and regulations.

However, Handley and Limao (2015, p. 190) argue that EU membership also has significant downsides. For example, they explain that EU structural funds typically crowd out the private sector and particularly the logistics and transport industries. According to Boulanger and Philippidis (2015, p. 832), private companies that previously conducted business profitably even without government support suddenly found themselves up against competition from new entrants funded by the EU. On one hand, the EU structural funds were initially considered the lifeline for the poorer post-communist economies but, on the other hand, Boltho and Eichengreen (2014, p. 114) argue that it worked to the disadvantage of others. However, a critical analysis of this argument reveals that rather than the entire transport and logistics industries, only a few companies that operated in them were disadvantaged. In fact, as Li et al (2016, p. 399) argue, the two industries (transport and logistics) benefited from the entry of new players as stakeholders had more options to move raw materials, goods and products across the unified market.

However, from another perspective, Scott (2016, p. 69) notes that the EU funds have also bred corruption, waste and cronyism. For example, Slovakia’s Ministry of Social Affairs received €100,000 of an EU grant meant to address unemployment but instead used the money to buy disposable raincoats and pens (Scott 2016, p. 69). While this is a relatively insignificant amount, it could have been more consequential if spent on the original purpose of creating business opportunities for the youth. Ideally, as an EU member, Slovakia could have opened up trade opportunities with other members that would essentially generate business for the logistics industry. Kumar and Ekwall (2016, p. 321), however, disagree with Scott (2016) and argue that established trading processes are not likely to change immediately due to corruption or the exit of any member state. As long as the fundamental trading laws are still in place and the market exists, the need for logistics will always exist.

However, it is worth noting that even in the presence of fundamental trading laws, the logistics service providers will be less efficient when trading with non-member states. As Aalto (2016, p. 53) notes, the key benefit of EU membership is the ability to move goods, labour and capital freely across other member states. However, the exit of any member state will dictate that laws and regulations regarding border controls are re-adjusted, effectively making logistics less efficient.

From this literature review, it is evident that there is need for further research to determine the exact implications of Brexit to the logistics supply chain in Europe.

• • 9. Research Methodology

9.1 Research Strategy

The two major academic disciplines involved in the proposed research are business and social sciences. The branches to be explored under the business discipline include economics, management and marketing while social sciences will mainly be concerned with political science, geography and law. The proposed research will assume a theoretical position based on reality and knowledge and seek the optimal balance between social approaches and fact-based evidence so as to deduce meaning.

The proposed research will use the mixed methods research (MMR) approach. As Leech and Onwuegbuzie (2010, p. 265) explain, the MMR approach involves the collection, collation, analysis and interpretation of both qualitative and quantitative data in a single research. Therefore, the central premise of the MMR approach in the proposed research is that it will use both qualitative and quantitative approaches in combination to provide the researcher with a better insight into the research topic (Descombe 2010, p. 83).

On one hand, the qualitative approach will be instrumental in understanding and interpreting social interactions while, on the other hand, the quantitative approach will be used for testing hypothesis as well as understanding the cause and effect concept. In that context, the quantitative approach will essentially be used to make predictions. The researcher will also use the qualitative approach to identify patterns and themes and the quantitative approach to identify statistical relationships (Bryman & Bell 2011, p. 38).

9.2 Research Design

The proposed research will collect secondary data mainly via literature review. The literature to be reviewed will be collected from academic and professional databases, peer-reviewed journal articles, trade bulletins from relevant agencies and textbooks. The significance of secondary data in the proposed research is that, while no new knowledge will be incorporated, it will present evidence from previously conducted, concluded and peer-reviewed studies (Bryman & Bell 2011, p. 44). Equally importantly, the secondary research will also be instrumental in saving time. Additional secondary data will also be collected via an analysis of financial records and statistical information. On one hand, secondary data will guide the researcher with regards to the research designs used by earlier researchers and the type of content they analysed in a similar field (Leech and Onwuegbuzie 2010, p. 266). On the other hand, an analysis of financial records and statistical information will give an overview of the business volume the logistics service providers handle within the bloc. It is anticipated that the correct use of the results of the analysis of the financial records and statistical information will enable the researcher consolidate the findings of the literature review with regards to the claims of revenue generation from logistics.

While it is evident that secondary research presents realistic advantages, it is also acknowledged that it features several inherent disadvantages. For example, primary research enables a researcher collect data with a concrete idea to meet a certain objective. Hence, that provides the ability to ask specifically customised questions (Descombe 2010, p. 87). However, secondary research may overwhelm the researcher with enormous amounts of data. Further, huge amounts of data do not necessarily translate into appropriate or high-quality data (Descombe 2010, p. 87). However, the researcher will address the disadvantage by using inclusion/exclusion criteria to ensure that on data that is specifically on logistics within the EU is used.

Both ethical and academic requirements will strictly be adhered to. In that sense, no copyrighted material will be used without the express permission of the copyright owner and any literature reviewed in the process will be referenced accordingly.

10. Project Plan

11. References

A full list of all the sources used in the proposal, presented using the Harvard system of referencing.

Albornoz, F., Calvo, H., Corcos, G., and Ornelas, E., 2012. Sequential exporting. Journal of International Economics, 88(1), pp. 17-31.

Aalto, P. ed., 2016. The EU-Russian energy dialogue: Europe's future energy security. Routledge.

Boltho, A., and Eichengreen, B., 2014. The Economic Impact of European Integration.

CEPR Discussion Paper No. 6820.

Boulanger, P., and Philippidis, G., 2015. The End of a Romance? A Note on the

Quantitative Impacts of a ‘Brexit’ from the EU. Journal of Agricultural Economics, 66,

pp. 832-842.

Bryman A. and Bell E. (2011) Business Research Methods, third edn. Oxford: Oxford University Press.

D’Aleo, V. and Sergi, B.S., 2017. Human factor: the competitive advantage driver of the EU’s logistics sector. International Journal of Production Research, 55(3), pp.642-655.

Descombe, M., 2010. The goods research guide: for small-scale social research projects. Open University Press.

Handley, K., and Limao, N., 2015. Trade and Investment under Policy Uncertainty:

Theory and Firm Evidence”, American Economic Journal: Economic Policy, 7(4), pp. 189-222.

Kumar, V. and Ekwall, D., 2016. Macro-Scale Indicators Based Analysis of Textile Product Recalls in the EU. In NOFOMA 2016-PROCEEDINGS OF THE 28TH ANNUAL NORDIC LOGISTICS RESEARCH NETWORK CONFERENCE (p. 321-340).

Leech, N., Onwuegbuzie, A., 2010. A typology of mixed methods research designs. Quality and Quantity, 43(2), pp. 265-275.

Li, F., Haasis, H.D. and Dovbischuk, I., 2016. Challenges and Solutions Toward Green Logistics Under EU-Emission Trading Scheme. In Dynamics in Logistics (pp. 397-405). Springer, Cham.

Oberhofer, P. and Dieplinger, M., 2014. Sustainability in the transport and logistics sector: lacking environmental measures. Business Strategy and the Environment, 23(4), pp.236-253.

Puertas, R., Martí, L. and García, L., 2014. Logistics performance and export competitiveness: European experience. Empirica, 41(3), pp.467-480.

Scott, J.W. ed., 2016. EU enlargement, region building and shifting borders of inclusion and exclusion. Routledge.

Turrisi, M., Bruccoleri, M. and Cannella, S., 2013. Impact of reverse logistics on supply chain performance. International Journal of Physical Distribution & Logistics Management, 43(7), pp.564-585.