Friday 20th Sep 2019 - Logistics Manager Magazine

Post-Brexit port delays could bankrupt 10pc of UK businesses

The Chartered Institute of Procurement & Supply has warned that one in ten UK businesses believe they could go bankrupt if goods were delayed by 30 minutes at customs.

In a survey of 1,310 UK and EU-based supply chain managers, respondents said the longer the delay the more likely their business would go bankrupt. Some 14 per cent said this would happen if delays to the customs process reached 1 – 3 hours, and 15 per cent at 12 – 24 hours.

CIPS economist John Glen said: “The UK economy could fall off a cliff on Brexit day if goods are delayed by just minutes at the border. Businesses have become used to operating efficiently with exceptionally lean, frictionless supply chains, where quick customs clearance is a given. Customs delays would not only affect businesses, but would also lead to a shortage of products on shelves and an increase in prices for consumers as well.”

The research also found that UK businesses are taking steps to mitigate the risk of increased delays at the border. Some 28 per cent said they will stockpile goods, with four per cent already starting to do so while 23 per cent are planning to stockpile in the future.

Other steps being taken by businesses to alleviate the potential impact of customs delays include building greater flexibility into contracts (21 per cent) and looking for alternative suppliers outside the EU (21 per cent).

However, half of UK companies said they would struggle to find the suppliers and skills they need in the UK if they were forced to re-shore parts of their supply chain post-Brexit.

Some 38 per cent said they cannot prepare at all as future trade arrangements are still too unclear. As the UK and EU prepare to finalise a deal based on the Chequers plan at the EU Summit on 18th-19th October, some nine per cent of UK supply chain managers said they would prefer a no-deal scenario.