feature: brexit
“UK business is ill-prepared for post-Brexit
customs complexity”
2020 was meant to be the year of ‘Brexit Preparation’. When the UK leſt the EU on January 1st 2020, firms involved in trade with the EU were set to spend 12 months on robust planning, maximising the 12 month Brexit transition period to understand the new trade and customs requirements. The transition period provided time to put in place the systems and expertise required to manage trade and the customs declarations that will be required with the EU.
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ince March, however, Covid-19 has wrought unprecedented change
throughout every supply chain – and many firms felt they had no option but to shelve Brexit planning, and in many cases also use cash and stock initially reserved for Brexit- related disruption, simply to survive. With the deadline fast approaching, however, and the option of a ‘no-deal’ Brexit on the table, the lack of preparedness is beginning to raise concerns. As Andrew Tavener, Head of Marketing at
Descartes, argues, UK businesses are largely ill-prepared for the customs complexity post- Brexit. Companies need to take action now, or potentially risk supply chain disruption at a level far greater than that experienced during the onset of Covid-19.
Brexit readiness assessed During July 2020, Descartes commissioned independent research to ascertain supply chain managers’ general expectations around the impact of Brexit. The findings were stark: • Two thirds of businesses have had their Brexit preparations disrupted by COVID-19. • Less than a quarter (23%) have high confidence in their ability to cope with the extra administrative burden of Brexit.
Andrew Tavener, Head of Marketing at Descartes
• Two thirds (67%) of large firms are very or extremely concerned about longer delays in their supply chain impacting the business post- Brexit. • Fewer than one in five (18%) of UK businesses are prepared for a ‘no deal’ Brexit. • Almost three quarters (72%) are concerned
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www.innovativeelectricalretailing.co.uk
about the customs brokerage market’s capacity post-Brexit. • Two fifths (40%) are concerned about customs declarations impacting their business post-Brexit. With just a few months until the the end of
the Brexit transition period, the lack of certainty surrounding the deal still under discussion between the EU and UK is undermining business certainty. Just over half (52%) think a UK-EU trade deal is unlikely to be achieved in 2020 and only one in ten (10%) supply chain managers claim to have total certainty regarding the impact of Brexit on their business. Furthermore, despite the consensus regarding the likelihood of a ‘no deal’ Brexit, fewer than one in five (18%) are prepared for a ‘no deal’ exit from the EU. Delays to the supply chain (45%) are the biggest concern regarding the impact of Brexit on cross border trade. However, the larger the organisation, the greater the concern regarding supply chain delays: 56% of supply chain managers in firms with over 1,000 employees are worried about delays to the supply chain. The impact of such delays also raises serious concerns: two thirds (67%) of larger firms are very or extremely concerned about longer delays in their supply chain. Over two thirds (68%) of supply chain managers within healthcare are also concerned about supply chain delays. Tariff
September 2020
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