Andrew Wright, Managing Director at James Latham, shares his observations of what impact Brexit has been having on the industry.
There has been a great deal of commentary around issues related to Brexit, with uncertainty on customs entry procedures, additional administration, duty, shipping and transportation costs and the inevitable delays all being well publicised.
Research from The Chartered Institute of Procurement and Supply found that 45% of companies had experienced longer lead times for products. This is against a backdrop of falling imports more generally - ONS figures at the beginning of the year showed a drop of nearly 30%, although this did start to improve in February.
The signs are that importers and manufacturers are still trying to adapt to new customs requirements.
There is the added difficulty of the global pandemic, during which time the sector has seen a dramatic swing in demand for materials. Subsequently construction and therefore demand has been steadily recovering as lockdown restrictions have loosened, combine this with a backlog from the earlier slowdown in production volumes, and global supply lines for some commodity products are being thoroughly tested.
As you would expect, James Latham planned ahead, taking measures to prepare for the UK leaving the EU as soon as the result of the vote was announced. While this involved significant investment and planning before we knew the shape of any deal, we did not want to get to the end of the Brexit process and find ourselves unable to continue to source stock from our key suppliers in Europe.
A major part of this was setting up a specific team focused on our supply chain management. This included a new position on the Lathams Limited board for Steve Frommont as Supply Chain Director.
The team audited our existing relationships, import processes and our customer’s expected future requirements. From there, we developed a response based on risk assessment and focused on maintaining the uninterrupted flow of goods to our depots and customers leading up to and throughout the Brexit transition.
Our supply chain team is now eleven people strong and has worked extremely hard to secure a set of accreditations demonstrating our compliance across a range of factors.
One of the most important aspects was obtaining Authorised Economic Operator (AEO) status. A mark of quality, it is awarded by HM Revenue & Customs to recognise businesses with a strong track record of high standards when it comes to imports and exports. The benefit is a faster customs authorisation process with simplified paperwork, meaning our stock is not held up at borders. As well as being recognised by the EU, this status is also part of agreements with China, Japan and the USA.
The supply chain team have worked particularly hard throughout the period, successfully navigating the business through new documentation procedures whilst maintaining the flow of product from our key suppliers into the business and avoiding significant disruption at the ports.
During this unprecedented period we have continued to work very closely with our key suppliers, building on the excellent relationships with our supply chain partners to help ensure that we can maintain a seamless supply of product to our regular customers.
Flexibility remains our priority in the months ahead as we emerge from the pandemic and things become clearer. However, we believe that we have the right strategy and experienced teams in place to continue serving the market.