By Kate Lester, CEO & Founder, diamondlogistics
It’s less than two months until Brexit day – 1st Jan 2021 – and a deal is yet to be struck. The failure to negotiate effectively – on both sides – is causing uncertainty and generating substantial costs to businesses.
We’re seeing international clients delaying plans to settle on the UK as their European distribution hub until the outcome of trade negotiations is known.
It pains me to admit that diamond has lost promising international clients to the continent because of this. The UK has been a preferred partner, particularly for Asian and American companies, until now. I hope for a frictionless trade deal and that they’ll return.
As 2019 came to a close, businesses were as prepared as they could be. At diamond we familiarised ourselves with new requirements, developed and amended IT systems, recruited and trained new team members, prepared paperwork – at the cost of tens of thousands of pounds – based on the worst-case scenario. All this will go to waste, of course, if a frictionless EU deal is announced (which I think likely). However it would have been irresponsible and potentially catastrophic if we hadn’t prepared in this fashion.
Plan for the worst and hope for the best. That’s our 2020 motto! However, positive slogans aside, it’s incredibly difficult for businesses to make provision for a completely unknown outcome. The huge burden of this will rest on the shoulders of the UK logistics industry.
Conservative MP Micheal Gove had the cheek to say the UK logistics industry stepped-up well to cope with COVID-19 and that we’ll do the same again with Brexit. But what he failed to understand is that this is radically more difficult.
Why? The UK logistics industry were able to step-up and manage added pressure on supply chains because we had frictionless trade, therefore no risk of lorries queuing on the M20. There is a fundamental lack of understanding or empathy by parliament of what businesses are going to have to cope with beyond Brexit day.
We’re keeping a close eye on the changing requirements around goods clearance into the EU after the 31 January and building them into our IT system DespatchLab – diamond proprietary software – as they happen. The system can automatically produce the necessary commercial paperwork.
For example, a couple of weeks back they put additional controls in place for goods entering and leaving Northern Ireland. We were able to write this into DespatchLab immediately, which meant our customers were unaffected. They didn’t even have to think about it.
When the trade deals are in place, we can adapt again.
Talks have been going on for months, years. It feels like we’re almost there. But what will a trade deal look like? The BBC reports that recent late-night pizza deliveries suggest we’re close. I hope they’re right, and I hope it’s frictionless.