Brexit News – 24th August 2020
Firstly apologies for not updating Westcoast’s Brexit pages for some time – but our focus has understandably been on responding to Covid-19 over the past months. However, Westcoast’s Brexit Committee met earlier this week and we can issue the information/guidance below.
Whilst the UK has exited the European Union at the start of the year, no real changes in trading conditions has been experienced as a result. This will not be true if the UK and the EU cannot agree a trade deal at the end of 2020. Recent reports have shown the Cabinet Office preparing for widespread disruption should such a scenario coincide with a second wave of Coronavirus in the UK.
Westcoast’s approach is to prepare for the worst and hope that the situation is considerably better.
Delivery Delays from Europe
Recent studies have shown that some delays at ports of exit/entry are likely. Given that most (>90%) goods distributed by Westcoast are currently imported into the EU via mainland Europe and shipped across the English Channel either directly to distributor/reseller/end-user or via a vendor-owned/3PL facility – such disruption is bound to have an impact. Hence Westcoast have taken or will take the following mitigating actions:
- New increased storage.Westcoast’s new 346k sqft facility in Andover has been fully operational since the start of the year and has allowed increased space for vendors and customers; increased Westcoast services (eg configuration, PDI, storage, bundling) and will provide reduced cost outsourcing opportunities for any number of vendors and resellers.Westcoast has the appropriate EORI number and TSP status in place.
- Short-term deals.Previous ‘false Brexits’ were covered by stocking deals with Westcoast vendors to mitigate the immediate disruption to normal trade.Westcoast have already started working with vendors to ensure inventory planning over the change period.
- 3.Vendors.Westcoast are working with freight forwarders, vendor logistics managers to ensure the smoothest possible importation through UK ports of entry.This includes correct commodity codes, country of origin information and paperwork.
- 4.Tariffs.Most (but not all!) IT product distributed by Westcoast in the last 180 days has no tariffs applicable on WTO terms or the UK Global Tariff (applicable from 1st January 2021).An accurate commodity code which allows tariff application to any goods imported is an important part of Westcoast’s work at present with vendors encouraged to provide a complete library of codes for every live sku.Westcoast are currently looking at automating a tariff look-up procedure to apply an appropriate tariff to the cost of the product if applicable.These can clearly change with little notice.
- Other costs.VAT deferment costs, import management and transportation costs may also increase cost of goods after 1 January 2021 and will be applied systematically.
- Finally, Westcoast are working with vendors to arrange direct delivery into the UK from the Far East (ie avoiding the EU altogether).Westcoast can act as a master distributor, importer or merely a 3PL provider to a wide range of suppliers.
Westcoast now have warehousing in the UK and across Europe (inc Ireland). We are investigating the possibility of having a bonded capability in the UK for Irish goods and those for re-export to Europe. All vendor contracts are being amended to allow for such transactions. Resellers that need assistance managing International Shipments have a strong team under Sue Keywood in Customer Services here at Westcoast. We can manage the nuances of exporting to the EU including tariff application and shipping administration. Customers will be asked for standard information in advance of quoting whether the order is received by EDI, web or via Westcoast sales.
The new Brexit arrangements for Ireland and Northern Ireland are well understood and we are working with our logistics provider/freight forwarder to ensure we minimise delays when delivering across the Irish Sea. There are no plans to enhance Westcoast’s current cross-stocking facility in Tallaght, Dublin.
Our recent Brexit Committee has reinvigorated our Brexit plans and the committee will meet every month in the run up to 31st December 2020 and will report back via ‘Brexit News’ every month. We will have updates on the progress of plans outlined above as well further opportunities for all vendors and resellers to mitigate their existing costs by outsourcing to the experts.
Any questions or feedback are welcome by e-mailing: email@example.com