In continuation of my column last week, of this two-part article, I highlight the other issues in addition to border control and deliveries, that pose difficulties for UK business leaders in trading with the European Union, having exited the bloc.
Supply chains: According to recent research from the Small Business Charter, a government body, 43 per cent of SMEs are concerned about supply chain disruption as a result of the new post-Brexit trading conditions.
Business manager at on-site support specialist EDIT, Abdul Sidike, recognises these findings. His firm is experiencing an “indirect effect’’, Sidike said.
“A lot of our suppliers are experiencing delays in taking delivery of equipment. The cost of a lot of base equipment has increased. Basic models of laptops, desktops, and tablets have increased from 10-25 per cent’’, he said.
Even though the delay in collecting tax and the ability to pay it has incrementally helped Sidike’s company’s cashflow, the pandemic does complicate things as suppliers will have to be paid eventually, he stressed.
“With a downturn in business over the last 12 months it will have to be planned carefully. The impact of Covid will be felt for at least two or three years after the government declares that we are OK to return to normal, or a new normal.”
Therefore, Sidike turned to the Small Business Leadership Programme, a government funded programme which provide free training to support small to medium size businesses affected by Covid-19 and post-Brexit trading challenges.
“This programme has allowed me to understand better what I have done and what I am doing to push forward growth’’, Sidike said.
Empty lorries: As deliveries are delayed or cancelled altogether, the ongoing uncertainty has resulted in nearly half of lorries that transport goods into the UK returning to the EU empty, according to the Road Haulage Association (RHA).
Moreover, the lack of demand for freight capacity to the EU makes it also more challenging for importers to book lorries who are prepared to travel to the UK as round trips are no longer as lucrative as they were before Brexit.
“Most of the trucks that bring goods in the UK are not British and we have seen a noticeable reduction in hauliers wanting to make the journey’’, RHA’s chief executive Richard Burnett said.
He added: “They are also worried about being stuck in port if they don’t have the right customs paperwork.”
Additional costs: Caroline French, who runs shoe retailer WJ French, which has been trading since 1803, said there has been a lot of information to plough through and her team has a hard time trying to decipher what is actually relevant to her business.
“A lot of our suppliers are based in the EU and as we are no longer in the customs union, every import from the EU requires [us] to complete a complex and costly import declaration’’, French said.
Many of the retailer’s suppliers have made the business decision to complete that declaration and pay the import VAT due at the port.
“This will understandably mean that some of these costs will be passed onto us and that we will have to buy in bigger one-off orders to reduce costs and work generated by every customs declaration’’, French explained.
Chief commercial officer at Huboo, a Bristol-based tech-driven fulfilment provider, Mark Elward, is convinced that a great many independent businesses will continue to suffer, unless they are able to access more support.
“In the longer-term the upshot will be more British businesses focused on building their business domestically and postponing plans to expand into Europe’’, he concluded.
(The writer is our foreign correspondent based in the UK)
Andy Jalil
andyjalil@aol.com
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