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AIRSOFT, BREXIT AND THE ELUSIVE CONTAINER...

WHEN YOU START A PIECE BY RESEARCHING SUPPLY CHAIN LOGISTICS, VALUE ADDED TAX AND THE EFFECT OF COVID WORLDWIDE, YOU JUST KNOW YOU’RE IN FOR AN ABSOLUTE ROLLERCOASTER OF A RIDE AS FRENCHIE DISCOVERED...

Okay, sort of, but I had reason recently to spend some time chatting with the manager of one of the UK’s major airsoft retailers and it was something of a tale of woe. That got me thinking, and thinking got me reading and that all got me writing, so here we are.

I doubt that any of you haven’t remarked on empty supermarket shelves or rising prices. To understand why this is the case involves both Brexit and Covid, a perfect storm for the UK, and not a whole lot of fun for anyone else frankly. The upshot is, as it was told to me, anyone who is waiting for a ‘reset’, when all will be as it was before this all kicked off, is probably on a hiding to nothing. The world has changed, certainly for the foreseeable future and choices within airsoft are likely to shrink, while prices creep upwards.

According to the conversation I had, there are two causes of this; firstly the massively increased cost of shipping freight around the world, and secondly changes to customs regulations in the UK as a result of Brexit and our withdrawal from the EU.

Shipping first. I doubt anyone hasn’t heard either first hand or via the media that the cost and availability of shipping has increased massively. This increased cost has to some extent been swallowed by importers but that isn’t a state of affairs that can persist and we should expect to see it reflected in the prices we pay sooner rather than later. The worldwide pandemic has been responsible for this; as the production of goods was affected by lockdowns so was the process of shipping those goods. When shipping was possible, the goods themselves were delayed, or ships weren’t available to transport them. Possibly they left as scheduled, but found themselves unable to dock at their intended destination because of Covid measures there, requiring rerouting, rescheduling, delays and the additional costs involved in getting them to their ultimate destination. This also

“I DOUBT ANYONE HASN’T HEARD EITHER FIRST HAND OR VIA THE MEDIA THAT THE COST AND AVAILABILITY OF SHIPPING HAS INCREASED MASSIVELY. THIS INCREASED COST HAS TO SOME EXTENT BEEN SWALLOWED BY IMPORTERS BUT THAT ISN’T A STATE OF AFFAIRS THAT CAN PERSIST AND WE SHOULD EXPECT TO SEE IT REFLECTED IN THE PRICES WE PAY SOONER RATHER THAN LATER”

meant that ships, having finally discharged their cargo, were in the wrong port and empty, leading to further delays, rescheduling etc. It was, and is, an absolute nightmare. If you run just-in-time supply chains I wonder how on earth you have managed to sleep for the past eighteen months; hitting yourself with a mallet would probably have been so much more fun.

The effect on airsoft retailers has been profound. Pretty much everything they sell comes from abroad, mostly from the Far East. That means everything has to be shipped to the UK and costs have skyrocketed. Even obtaining goods from European suppliers costs far more than it did a year or so back. I heard of one instance where a shipment that would usually be palletised was sent as a consignment of individual cases. Given that it must have cost an arm and a leg to do that, you get an idea of how difficult and costly moving pallets currently is.

To my knowledge, no UK retailers made substantial profits from exporting goods, but all those who I have dealt with over the years did steady business beyond the UK. I was told that a major shipping company was now charging a flat rate of £95.00 GBP to ship anything overseas, regardless of size or weight. That is prohibitively expensive and accordingly companies will simply stop offering the service. No one is going to pay that, and any attempt by the seller to absorb some of that cost will destroy their already slender profits on these sales.

For the same reason some have withdrawn entirely from Amazon as a sales platform as it has become impossible to meet the service standards, particularly for international sales, dictated by them. While not a place for selling airsoft guns, there was always a market for accessories and tactical kit. No longer. Although unlikely to be a deal-breaker for established retailers, all of this reduces their potential market and makes them even more reliant upon the UK alone.

The pandemic has impacted retailers ability to both import in a timely manner and to economically export, how has Brexit affected them? In a word, Customs.

When the UK quit the EU, it became necessary to pay UK VAT on goods entering the UK. If you are a small European company the chances are that you’ll simply say the German equivalent of “**** that for a game of soldiers” and concentrate on your existing tarifffree trade with the rest of Europe. And so it has proved. Even much bigger companies with experience of shipping their goods around the world stuttered a bit at first although I’m told that their systems soon got to grips with the new world order. For importers, the easiest way to deal with this is to use the services of a freight forwarding company who will handle the administration and send you a nice invoice for the VAT due to the exchequer. This way the supplier or importer doesn’t need to find several thousand pounds up front, but as a solution there are probably limits on just how many suppliers airsoft companies can or will support this way. If you’d like to know more about the changes affecting VAT, you can have a read here (hint-spare yourself!).

On top of that there seems to be greater attention being paid to what is crossing British borders. This should be a good thing, but that assumes that the Borders Agency staff are all up to date with what is and isn’t permissible. Sadly, they aren’t and I have heard tales of shipments which have yoyo’d back and forwards between the UK and the supplier. At best this causes delays and costs to the importer as goods are normally paid for up front so being able to sell them and recoup those costs is slightly important, at worst the goods never arrive leaving suppliers short of stock and having to work to recover the payment they made in the first place.

The cumulative effect of all this is greater costs, more bureaucracy and increased uncertainty when ordering from overseas, not something that airsoft retailers have a choice about given that there is no manufacturing based here in the UK. Players should expect prices to rise, and while there is an expectation that freight costs will probably slide back, the estimates as to when this might happen I found when researching this piece suggest it will be years rather than months.

Airsoft is hardly unique in all of this unfortunately, as mentioned above, the media has been full of “empty shelves are here to stay” stories. In a spirit of optimism I’ll posit that things will settle eventually and improve across the board, but we could be in for some years of increased costs and reduced choice. AA

“THE CUMULATIVE EFFECT OF ALL THIS IS GREATER COSTS, MORE BUREAUCRACY AND INCREASED UNCERTAINTY WHEN ORDERING FROM OVERSEAS, NOT SOMETHING THAT AIRSOFT RETAILERS HAVE A CHOICE ABOUT GIVEN THAT THERE IS NO MANUFACTURING BASED HERE IN THE UK.”