Trends in global supply chains

In this episode of DLA Piper's 'Better Contracts' podcast series, Thilo von Bodungen catches up with Lauren Hurcombe and Joe Masson to explore some of the trends that they are seeing in their respective markets – the EU, Asia, and the UK – as well as the market challenges. The podcast considers issues posed by the current economic climate and increased regulation, and it underscores the importance of understanding regional differences in markets and of avoiding a 'one size fits all' approach to contracting internationally.

Diverse routes to market

The discussion kicks off with a look at the different approaches in the EU, Asia, and the UK, touching upon:

• the primary routes to market in the EU and why Germany and Ireland are often the entry point to the EU for businesses
• the complexity of distribution networks in Asia, the rise of social commerce, and how business wanting to successfully enter the market may need to combine e-commerce marketplaces and traditional routes
• the acceleration in e-commerce in the UK and the shift in focus to the flexibility and scalability of supply chains after COVID-19.

Contracting globally

Our panel considers some of the challenges of contracting for global supply chains, including the normalcy of informal distribution arrangements in Asia versus EU and UK legal obligations around supply chain due diligence and the origin of items. The discussion highlights the impracticality of a one-size-fits-all approach to contracting and the need to adopt regional strategies that take account of specific jurisdictional nuances. This includes Europe, where a high level of legal harmonisation in the EU does not avoid the need to take account of local law and local enforcement regimes (see, for example, the position around payment terms: Prompt payment: an overview of the laws relating to mandatory payment terms in Europe).

The panel looks also at the impact of political and economic changes on market strategies and supply chains, including the effects of the UK having left the EU.

Trends

The podcast ends with a look at market trends, noting the trend towards bringing supply chains closer to home in response to global uncertainties and the strong focus on consumer protection in the EU and UK. The panel contrasts this consumer protectionist approach with the less stringent regulations in Asia, picking up on some of the new EU consumer protection legislation that will impact non-EU manufacturers and distributors doing business in the region.

Further reading

• Insights into potential supply chain mitigation strategies for UK and EU businesses facing increased tariffs: Mitigating the impact of tariff disputes.
• A look at how contracts could be used as a tool for risk mitigation in the face of increased tariffs: Navigating the Trump Administration’s latest tariffs on Canada, Mexico, and China.

Note

This podcast was recorded before the recent elections in Germany and before the US announced its latest set of tariffs. The podcast refers to Germany's Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz, LkSG), which the new coalition government has since announced will be repealed. For the latest position on the US tariff regime, please see our tariff tracking webpage. You may also be interested in: Trump Administration tariffs: Responses from the EU, the UK, and APAC.