Brexit News – January Update
With much heightened activity around Brexit, this Westcoast update is written following the sizeable defeat of the Withdrawal Agreement Bill in the House of Commons and the recent instruction that the Bill might pass if the EU agreed to significant changes in the backstop arrangements.
Westcoast’s Brexit committee can take no comfort in the UK Parliament’s stated desire to avoid a ‘No-Deal’ scenario on 29 March and continues to follow government advice to make best preparations for such an eventuality.
Much of the sector are highlighting the extreme difficulties that would arise in a ‘no-deal’ scenario including Westcoast’s main courier into Europe – Europa. They state that if either the UK or EU customs were not ready, this could lead to significant delays at channel ports. The majority of Westcoast’s import and and exports come/go through Dover-Calais. At present, the likelihood of such readiness is extremely low and hence customers will experience both shortages and delays in receiving goods. Perishable goods are likely to get priority leading to greater delays for IT and consumables.
Many PCs and Servers are built to order in Eastern Europe and Westcoast are working with manufactures and customers to ensure forecasted products can be held locally in the UK. Westcoast have purchased increased warehousing space to accommodate such requests. Westcoast advise all customers to forecast demand beyond March 29 and engage with your Westcoast account manager to ensure Westcoast can place appropriate forward orders on your behalf. Post 29 March, customers should attempt to order stock available in the channel and reduce their reliance on specific build to order devices.
Westcoast are also stocking increased quantities of a wide range of products from major vendors that are realising that their supply chain is likely to be disrupted. Whilst all vendors have been engaged, all have an array of plans to minimise disruption. However, many will involve Westcoast taking increased inventory which Westcoast are ready for.
Exports to France and Mainland Europe
Westcoast are engaging with a number of customers that purchase from the UK currently and alerting them to potential delays. Significant customers are being advised of possible alternatives including using Westcoast’s extensive network of European warehouses.
Westcoast Ireland deliver next day to the majority of the Irish Republic and Northern Ireland from the stock based in the UK. Whilst Westcoast anticipate increased stockholding in its Irish facility in Tallaght, Dublin – this will be limited and hence we have a strong engagement with our delivery partner Primeline to ensure goods are delivered either through Dublin or Belfast, whichever is speedier. Delays are inevitable in their opinion though.
Much the above delays will lead to increased cost of delivery which Westcoast will incorporate into the cost of the product and pass onto customers.
These are harder to predict but sterling is likely to fall making goods sold to Westcoast in foreign currency more expensive. Westcoast change conversion rates weekly in general. Higher fluctuations may require further and more frequent adjustments.
Westcoast Data Governance Office are working hard with vendors to ensure commodity codes are accurate and stored so that all paperwork contain appropriate identification for customs to clear/obtain excise duty. Whilst there are very few products and regions that are anticipated to bear tariffs and Westcoast have not identified any on WTO terms at present – this may not always be the case. Accurate identification of goods will be critical and forms the basis of much of Westcoast’s work at present.
Westcoast will use outsourced freight forwarders to process paperwork/customs waybills. Most of Westcoast’s key suppliers are readying themselves for the increased workloads.
Westcoast receive most goods Delivery Duty Paid. If Westcoast become responsible for any duty or carriage – these will be included in the cost of the product and passed on to customers. Customers should be aware of any changes of terms from their suppliers and Westcoast will keep customers informed of any agreed changes and their effect.
All key contracts cover the UK and no vendor with an existing all of EU and EEA contract with Westcoast has yet proposed a constriction to the UK only. All have expressed their intention to include the UK as a region on the existing contract. One supplier – Sony – has already changed head office location and contract to The Netherlands, but this has little impact on their staff or Westcoast’s ability to trade.
Whilst there is still much uncertainty, the significant short/medium term issue affecting Westcoast customers is delay at the ports. This will be mitigated with a signing of the Withdrawal Agreement and will allow the UK to build more robust custom procedures where required in collaboration with the EU. Westcoast will continue to lobby parliament.