As we move into the penultimate month before the UK officially takes back control of its borders following transition on 1st January, the pressures are mounting.
In many ways, Coronavirus has masked the looming crisis that is now just around the corner, as businesses have struggled through 2020, coping with two national lockdowns and the many challenges of working through a global pandemic. Despite being four and a half long years since the vote for UK to leave the European Union, it seems nobody is properly prepared for the change – least of all the government.
The latest UKWA member survey revealed that while 78% of respondents said that they were aware of the new Border Operating Model, only 40% felt that they were fully prepared, with 88% stating that their customers were nowhere near ready. The report from the National Audit Office last month simply told us what we already knew and confirmed the fears being voiced by the industry over recent months.
While members of UKWA and other trade associations have been kept well informed of the proposed Border Operating Model announced in July, it seems that traders – the customers – are less informed and less prepared.
For those operating in the warehousing and logistics sector, risk also means opportunity. Demand for space and services are likely to soar as traders attempt to mitigate inevitable supply chain disruption, driven by over 200 million additional customs declarations, with additional stockholding held closer to markets.
However, an important exception is fresh produce, where stockholding is not an option. Currently, UK imports 50% of its food with 30% coming from Europe, and the finely honed 72-hour fresh produce supply chain into this country is fraught with risk related to likely delays. Nigel Jenney, CEO of the Fresh Produce Consortium, has suggested there will be an additional two million pieces of paper in the fresh produce supply chain, with the government still making changes to regulations at this late stage.
The other key finding of our survey was reducing availability of warehousing space, partly due to stockpiling activity, but partly related to another COVID lockdown on all but essential supplies. UKWA raised this concern earlier in the year, but now we are in peak season, with higher than ever demand for online order fulfilment and containers continuing to flow into the UK from the Far East and elsewhere.
Extrapolating from the survey results, UKWA believes that there is less than 3% available warehouse capacity nationwide, with an increase of around 1% in availability post peak, heading into January.
Small wonder the UKWA survey confirmed that 25% of members consider Brexit the biggest risk going into 2021, with 34% citing concern for customers’ survival beyond the twin threats of COVID and Brexit.