Armageddon it has not been. Neither is it plain sailing. The media has focused a lot on the key hotspots – Dover, travel, VAT and food. For those exporting perishable food products – especially the seafood industry – the expected challenges and issues have been prevalent from minute one. For others, the forecast of thousands of lorries clogging up the roads of Kent has not manifested itself and traffic has been moving relatively easily. So should we be full of optimism that this will work better than many had predicted? In short, not yet.
There are still delays for most European-bound hauliers, whatever their load. Fresh produce has more restrictions and requires more paperwork which is very time consuming. Freight is down c35% in January with 60% of lorries returning empty from Europe as the cost and challenge of securing a load (with the correct documentation) is proving too difficult. Exports to Northern Ireland are suffering as well with concerns over onward haulage to the Republic of Ireland preventing the arrival of key goods.
But is this all Brexit related? What part does Covid play in this? And what of the seasonal fluctuations in movement of fresh produce?
Business leaders must learn from the frustrations to date. A better understanding of the paperwork requirements in advance; agreements with European exporters looking to access UK markets; and continued pressure on Government to clarify the rules.
What about other markets? The financial sector saw billions of Euros moved from London to trading hubs in Europe which will undoubtedly have a knock-on effect on employment in the City. How will travel restrictions affect our ability to develop new business partners? Teams/Zoom/Skype are all very useful, but they do not replace the benefit of spending face to face time with people, understanding their business and character, and establishing the trust and camaraderie that develops strong partnerships.
And for the consumer? Higher prices. Unexpected taxes and hugely inflated delivery costs make purchases unaffordable. There will be many who thought Brexit was a good idea now questioning the benefits when it directly impacts their consumer spending habits. The wider supply chain, especially in retail, must factor this into production and distribution. Products with a significant material component made from outside the EU but finished in the UK will incur tariffs. Bonded warehouses are looking like a sensible option for any products being ‘completed’ in Europe to avoid significant charges.
What does good post-Brexit leadership look like? Key is planning. Nearly every challenge was foreseen so whilst there is frustration they have not been avoided, we should not be surprised they happened. We cannot say with certainty how things will finally end up, but we can make intelligent assumptions. Paperwork is essential and should be a priority.
Developing more domestic production and sales reduces reliance on imports and exports. The EU is as keen to ensure a smooth trading relationship as the UK, so plan for distribution through different hubs to avoid congestion and delays. Businesses should be focussed on investment, if possible, to be ready for a resurgence of activity, and look beyond Europe to new and emerging markets. Financial markets and the investor community will still dominate the London landscape and they will be key to supporting new initiatives and building the right platform for Britain to grow.
It was never going to be easy and, whether you wanted it or not, it is here to stay. Working together, planning meticulously and investing in the future will allow us all to ensure a strong economic future both with Europe and global markets.
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