How will Brexit impact railway supply chains?

How will Brexit impact railway supply chains?

The railway industry in Britain has seen tremendous growth in recent years. In 2014/15, railway operators generated £8.8 billion in passenger revenue from 1.65 billion journeys – twice as many journeys as were recorded two decades previously.
Part of the reason for this spectacular increase has been population growth, including significant immigration from the EU. Last year alone 184,000 of 330,000 immigrants to the UK came from the EU. This population growth led to necessary investment in new commuter rail, metro, and high speed lines, as house prices in the capital drove more and more people to commute from the outskirts of the city and further afield.

Rail investment around London led to the UK coming to be seen globally as a prime location from which to target the EU market. Hitachi, for example, recently moved their global rail headquarters from Japan to London, going on to win several large orders in Europe, to acquire the Italian manufacturer Ansaldo, and to expand their manufacturing facilities to the UK (Newton Aycliffe) and Italy.
It is clear that the UK plays an important part in worldwide railway manufacturing (as well as consuming), with manufacturers such as Brecknell Willis and Mechan, to name a couple, making important contributions on the world stage. It is also clear that Europe, despite the challenges from Japan and China, has never stopped being a leader in railway manufacturing, with the likes of Faively, Knor Bremse, Alstom, and Siemens exporting worldwide. The British exit from the EU therefore represents an issue that supply chain managers cannot ignore.

In this paper we examine five areas that Brexit will impact in relation to railway supply chains: exchange rates, long-term service contracts, localised manufacturing, passenger growth, and workforce.

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