BREXIT ONE YEAR ON

Brexit one year on – what impact has it had?

It is now more than a year since the UK formally left the European Union, bringing with it a raft of new rules and regulations. But what effect has Brexit had on dealers? Has it led to increased costs and more red tape, or were these teething troubles that have been largely ironed out?

David Martin, sales director at One Office

Northern Ireland has certainly had its own unique difficulties since ‘the big leave’; all of a sudden there was an Irish sea border between Northern

Ireland and the rest of the UK and a

business protocol that hadn’t been there before. The result was that no-one really understood what paperwork needed to be filled in or what procedures to follow.

The different tax and paperwork implications meant that some suppliers showed a reluctance, at the start, to trade with NI - certainly from the point of view of suppliers within the UK who had, up to then, found it fairly seamless. The goods outside of the normal wholesale channel, which we had come to expect within a two- to-three day delivery time, were suddenly not arriving, or taking a lot longer to arrive.

We had done some preparation beforehand by collecting our customers’ EORI numbers, which we apparently had to use for any orders. This was indeed the case for a while, but I think some of the suppliers overreacted at the time, pushing up carriage costs and insisting on things like those numbers, even though we still don’t really know if we need them or not.

There were a lot of delays at the start, especially with furniture; the wholesalers had already sorted themselves out, thankfully, but we had stories of furniture being stuck in containers alongside other orders that hadn’t produced the right paperwork, and there were a lot of delays to anything which wasn’t coming through the normal wholesale channel.

It coincided with COVID, which didn’t help matters, but, in some ways, the fact that there were so few people in offices made things a little easier to deal with. Obviously, the last thing we wanted was for customers not to be ordering the same amount, but at least we could deal with the changes.

It all seems to have settled a bit since then. We don’t

enjoy quite the same level of service from some UK suppliers as we did before, but it’s something we and our customers have got used to.

Mark Wilkinson, ACCO

How office supplies businesses are faring outside the EU is a difficult topic to pin down with any certainty, as so many other variables have changed in the past 12 months. We’ve had the global pandemic, unprecedented supply chain disruption, economies rebounding at different speeds after their pandemic-induced corrections and, of course, many offices being closed for long periods. The closure of offices led to huge changes in demand, product, customer and channel mix, which impacted supply chains too.

In my view, it’s clear that Brexit has added to our costs; however, extrapolating that from the far more serious impacts of the post-pandemic rebound, wider inflationary pressures and the tragic geopolitical events that we now see unfolding in Eastern Europe is hard to do. Brexit has led to higher costs and longer lead times, but this is outweighed by other global inflationary drivers.

In terms of Brexit specifically, ACCO was well-prepared, and we had long experience in our UK business of both importing and exporting and, as I said 12 months ago, we adjusted for the fact that the post-Brexit world would mean more importing and exporting, rather than the crossbordering of goods in one customs jurisdiction.

I think, initially, some manufacturers - particularly smaller ones, or those not based in the UK directly - really struggled to import into the UK, post-Brexit. Exporting out of the UK, and into the EU is clearly more difficult than before, but far from uneconomic, depending on the sector you are in. The increased regulations do consume time and effort, which does add to costs, but I think most businesses have learned to adapt, or have re-focused their efforts elsewhere. I did see some well-known manufacturers posting apologies to their customers on LinkedIn - which surprised me - but, overall, I think the industry coped well.

Brexit has led to higher costs and longer lead times

The much greater concern for all involved in the manufacture, supply and distribution of workplace solutions is that of inflation. I have been in this industry for 24 years and have never seen inflationary pressures like we are seeing right now. These challenges far outweigh any current impact of Brexit and, as an industry, we will have to learn to be much more dynamic with our pricing, more creative in managing costs, and more realistic in our conversations on this topic.

Reliability of supply chain, and working with solid partners, are also key factors for the industry to consider in these turbulent times; we certainly see ourselves at ACCO as a very stable and reliable key partner.

Phil Jones, managing director, Brother UK

At Brother UK we have specialists in logistics and supply chain to deal with the complexities of trading with the EU, but the practical reality is this; goods clearances since Brexit have taken two weeks longer than previously. This is regardless of the delays the ships have had on the high seas; when the products have got here, it has taken two weeks longer to get the goods out of the port. This could be for several reasons, including the ports being clogged, containers being in the wrong place, or COVID isolations, to name but three, so you can’t say Brexit exclusively was the cause as there are multiple issues happening concurrently. That said, there is a huge amount more admin and paperwork needed than previously to bring in goods or export to the EU, which adds to costs and timeframes.

Also, post-Brexit the drivers that are often needed to move goods around the UK are not here as some who were from Europe had repatriated during COVID and not come back.

The driver shortages meant getting goods out of ports was difficult, and that you could end up incurring more demurrage charges. If your goods are stuck at the side of the port, and your freight handler says there are demurrage charges, then your cost of goods goes up - and that is before you get them into your warehouse, offloaded and off to your customers.

Overall, Brexit has added about three weeks to our overall, end-to-end supply chain from when goods hit a UK port to arriving at our DHL warehouse for processing. Our group companies in Europe aren’t experiencing the same impact as we are in the UK, but that’s just how it is now and what we are faced with.

I think things will improve; it’s just a matter of time for things to settle down, for the systems to be found, for people to become fully familiar with the processes and for the pandemic to end - all these sorts of things, and then we can fully discover the new normal.

I don’t think we will ever get back to the slick and predictable supply chains as we had pre-Brexit; there will still be an extended amount of time for goods to not only arrive but clear the ports. Inevitably there is more cost, more administration and less stability which is never a good thing, but this is now the trading environment that we must all continue to adjust to up and down the channel.

Peter Cowan, procurement director, Data Direct

It is clear Brexit was not ‘What it said

on the tin’. Having been announced and positioned as the easiest deal in history by Dr Liam Fox, it was anything but. Making such an announcement probably hampered the negotiation from the off, and markets have not been the same since.

However, as with any short- or long-term barrier being imposed, it has changed market dynamics and this in itself has led to many new opportunities. More marginal business, that used to have competition from Europe, now gives advantage to whoever has the ‘home’ stock.

One of the really difficult regions is Northern Ireland, where new legislation means that there are administration charges to ship to a part of the UK, due to being treated differently and carries the same documentation charges and checks as shipping to the EU. There is still no answer to this difficulty right now but, hopefully, it will be found.

At Data Direct we have tackled Brexit, and its complexities, as an opportunity. We now fulfil deliveries in the UK for companies/brands that did not want to hold their own stock over here, but still had a user-base to satisfy; we can fill that logistics gap, and all parties have benefited in doing so. Without doubt, our volumes to the EU are lower, but our gains on the domestic market have by far outweighed any loss.

Besides Brexit, there are greater challenges – many still because of COVID. Supply chain logistics’ costs are still much higher than pre-COVID, and now oil prices are putting further pressure on costs. Continuing disruption at manufacturing centres are also causing delays and disruption. There is talk of the ‘new normal’, but we are still some way off seeing that crystallised.

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