Tuesday 20 October 2020

Logistics sector ‘must step up Brexit preparations’

Hauliers will need to get to grips with at least eight new computer systems in order for Roll-On Roll-Off (RoRo) trade to operate efficiently after the Brexit transition, Logistics UK (formerly FTA) has warned, urging fleets not to leave preparations to the last minute.

Meanwhile, two thirds of large firms in the supply chain are either very or extremely concerned about longer delays impacting their businesses post-transition, according to research commissioned by logistics technology provider Descartes Systems Group, which warns that risk to supply chains is ‘unprecedented’ due to Brexit ill-preparedness.

The figure is among the findings of Descartes’ Brexit Readiness research, which aims to gauge the preparedness of UK businesses trading with the EU for the end of the transition period on 31 December.

The interviews with supply chain managers were undertaken by SAPIO Research during July, and were designed to assess companies’ general expectations around the impact of Brexit, concern surrounding specific changes to trading arrangements, and firms’ individual preparedness.

The research also found that two thirds of businesses have had their Brexit preparations disrupted by Covid-19, and less than a quarter (23 per cent) have high confidence in their ability to cope with the additional administrative burden of Brexit.

In addition, fewer than one in five (18 per cent) of UK businesses said they were prepared for a ‘no deal’ Brexit – a figure which drops to just three per cent among the critical food/drink and healthcare/medical sectors – and two fifths (40 per cent) were concerned about customs declarations impacting their business post-Brexit.

Delays to the supply chain (45 per cent) were the biggest concern regarding the impact of Brexit on cross border trade, Descartes found.

The findings suggest that organisations and supply chain managers with existing experience of customs declarations are far more concerned about the implications of Brexit for their businesses than those who have yet to discover the complexity of these processes, Descartes says.

Pol Sweeney, VP sales and business manager UK, Descartes, commented: “Membership of the EU has masked the complexities of customs for many, many businesses.

“Since the single market came into force there have been no customs formalities between the UK and EU for nearly 28 years, over which time international trade has grown and evolved significantly.

“The fact is that Brexit will have vast implications for any company importing or exporting out of the UK. Our research highlights the need for organisations to act now to ensure the right systems, processes and skills are in place in time.”

Readers can obtain a copy of Descartes’ full research findings here.

Earlier this month, Logistics UK (formerly the FTA) urged organisations in the sector to prepare for the end of the transition period.

“Around 200,000 UK businesses currently trade with Europe, and it is imperative that they protect their supply chains as the UK completes its departure from the EU,” said Logistics UK policy director Elizabeth de Jong.

“While the government continues its negotiations with the EU with the aim of achieving a free trade agreement, there is still much that UK traders can do now to ensure that the goods they depend upon continue to flow across our borders…

“Business must be ready to switch to new systems and new methods of trading from 1 January 2021 if their businesses are to be protected.”

The preparations that could be made by business were not reliant on a trade deal, said de Jong; organisations would need to take many of the same steps regardless of the political outcome.

“Logistics UK has advised its members to start preparing now,” she said.

“For example, all importers and export traders will need to ensure they have import and export paperwork and systems ready, whatever the outcome of the political negotiations.

“These include applying for a GB Economic Operator Registration and Identification (EORI) number which is needed before any goods can be moved, and knowing the Commodity Code and customs value of the goods, which are all needed to make a customs declaration and calculate duties.

“In addition, hauliers will need to understand and be able to use at least eight new IT systems to make RoRo trade move efficiently – there are four separate systems required by the UK government and one for each of Ireland, France, Belgium and the Netherlands.

“All will take time to install and learn and should not be left to the last minute. “

She continued: “Businesses need to ask themselves, have they considered how they will make declarations to HMRC systems, and whether they will employ an agent?

“It is also important to consider whether they can, and would benefit from, using any available simplifications or deferred customs declarations for standard goods.

“All this takes time and needs to be factored into the planning process – leaving it to the last minute could be problematic at best.”

“Help is available, with a wealth of information available at www.gov.uk and via business groups like Logistics UK through our Brexit hub, our free webinars for members and our Member Advice Centre.”

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