With the continued focus on recovery from COVID lockdown, you could be forgiven for not noticing the relentless advance of the country’s exit from the EU, but there is no doubt that on 1st January 2021 the UK will face the impact of potentially the hardest of Brexits.
While the scale of the challenge facing the warehousing and logistics community post-pandemic is not to be under-estimated and there will certainly be pain as our departure from the EU brings with it 200 million additional customs declarations- and for some, interruption to the previously ‘frictionless’ supply chains with customs checks and other inspections necessary under WTO rules, nonetheless there are some clear opportunities ahead.
For some time, UKWA has been highlighting this huge additional burden on ports and calling for government to legislate for inland inspection facilities. Clearly, it is encouraging to see that call with government committing to the development before July 2021 of ‘multi-purpose inland customs facilities’. However, we believe completely new infrastructure at the taxpayer’s expense is not necessary, as there is significant existing capacity that can be provided by UKWA members, so we will continue to raise this issue.
The government has also acknowledged, at last, the enormity of the task to grow the customs intermediary sector to help meet the increased demand expected at the end of the transition period, and has announced a further £50 million grant scheme, in addition to the £34 million already made available to the sector in the planning for the UK’s exit from the EU.
This grant scheme will offer financial support for training costs to upskill staff and for IT that supports greater efficiency. This will be of significant interest to UKWA members and others in the sector, who should be planning to develop existing or new Customs Warehousing services. We expect considerable demand for such services as the transition period expires and many importers seek solutions to defer and/or minimise exposure to import duties in the new post-Brexit world.
Despite the doom-mongers, we need to find the positives in Brexit and recognise new opportunity for growth. Put simply, interruption in flows after January 2021 will be mitigated by increased inventory in the supply chain and this will lead to demand for more warehousing.
The pandemic too has driven opportunity for our sector, as online shopping and demand for home delivery soars. With grocery retailers in particular re-evaluating their warehouse and logistics strategy, take up of warehousing space for the first half of this year is already 20% higher than in 2019 and set to grow.
The message from UKWA is that now is the time to stiffen resolve, look for the positives that flow from the tough times we face and seize the undoubted opportunities ahead!