by Emma Forrester
The impacts of Brexit for UK to EU imports and exports have been rather over-shadowed by the Covid-19 pandemic. We saw extensive press coverage of the huge delays for Road Hauliers before Christmas when the borders were closed but we haven’t seen anywhere this level of press coverage about the impact of Brexit for Road Hauliers.
In early January we checked the mood and impact on the market so far. Here is what we found…
The majority of Road Hauliers and Freight Forwarders that we spoke to had already been providing their customers with customs clearance services prior to Brexit for trade outside of the EU. As a result of Brexit they ramped up this service to cope with the new requirements. 67% said that they received between 20% and 50% more requests for customs clearance services as a result of Brexit with 33% reporting an increase of up to 20%.
There was a 3-way split in terms of the additional admin burden incurred. Some
were struggling with the requirements claiming that it added more than an additional 30 minutes of their time per booking whereas an equal amount quoted 15 to 30 minutes and less than 15 minutes respectively. Those with on-line tools to assist customers to meet the requirements were incurring significantly less administration time, however insufficient customer knowledge in meeting the new requirement for documentation was frequently the reason for the additional burden. Some companies had systems that were directly linked to the government system guaranteeing that paperwork would
be sufficient which is a clear benefit.
In addition to increased admin time we asked if Road Hauliers were experiencing delays to journey times and why. The majority
reported delays of less than 1 hour. Causes for these delays were incorrect paperwork, Covid-19 tests, the need for drivers to call ahead before reaching some ports (taking 20 to 30 minutes) and finally any additional road
congestion.
In terms of pricing there could be little long-term impact for large consignments as the fixed costs for customs declaration services
and additional safety and security declarations are a very small percentage of
the overall cost. It is the directly incurred costs that are the ones to watch. If delays increase or hauliers are less favourable to UK to EU routes then costs for equipment hire or 3rd party haulier services could increase as availability decreases.
In Summary
Those hauliers who are asset heavy with good systems seem to be the least impacted by the new requirements, however this is one to watch
in the coming months. Undoubtedly teething problems should ease as clarity
evolves and experience is gained but the UK has experienced a honeymoon period in January and this is going to change. The volume of shipments were low in January often due to stock piling in December and for
some goods there is going to be a tightening of the regulations from April, so as volume increases and restrictions tighten could we see more of an impact?
So what should companies do?
As the situation remains uncertain and is still evolving it would be prudent to develop your immediate “Plan B” and also your longer-term
strategy so that you can minimise the impact of an issue, should one occur, and in the longer term strengthen your supply chain. Even if you are well prepared, others who are not can still impact your supply chain through delays
at ports and even directly to your shipment where you do not occupy a full load.
In the short term, beware of the inevitable uncertainties of the coming months and plan accordingly. Anticipate the specific ways in which this uncertainty may impact your business and develop appropriate fall-back plans. Ensure you make use of what support is available, including some from government sources at little or no cost. For the longer term, beyond the pressing challenges of 2001, a carefully developed logistics strategy has never been more important.
About the author: Emma is a seasoned chartered procurement professional with 12 years experience in leading major procurement projects, and strategic business projects. At Enabling Procurement, Emma leads Private Equity driven procurement transformations. Enabling Procurement was founded by a team of operational procurement experts. We dedicate our efforts to delivering high value services by negotiating various commodities, products and services with stakeholders and suppliers, as well as by building, often from scratch, successful international procurement structures for companies around the world.
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