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British Corner Shop opens Dutch distribution centre

Online grocery store British Corner Shop has opened a new warehouse in Wijchen, The Netherlands – the first of its kind for the Bristol-based business as it seeks to offset the impact of Brexit and associated supply chain issues.

The new distribution centre doubles the size of the company’s previous warehouse, allowing them to stock more of their extensive selection of produce. It has also enabled them to hire their own employees, which ensures a higher quality of packing and stocking management, improving communication, and allowing greater oversight over orders.

The export industry has been massively impacted by Brexit, with British Corner Shop seeing a drop of 40% in turnover in the European market. This move to a fully dedicated European warehouse allows them to return to giving their customers service, free of supply chain and cross border compliance delays.

The retailer, which currently has 2,000 products from Britain’s most loved brands available to EU destinations, stocks many items not currently accessible to other supermarkets across Europe. Delays and ambiguities caused by the new Brexit laws saw a decrease in orders, and the company hope their new presence in Europe itself will help them to again meet the demands for British Products in the expat community.

With the new supply chain in place, British Corner Shop will enhance the proposition for their European customers. Plans include expansion of the brands and products on offer, increasing their range to over 5,000 of the best loved British products. This will also involve expanding the Marks & Spencer product range, including chilled, fresh and bakery, and adding new categories including alcohol and organic ranges.

Jon Farrar, Head of Marketing at British Corner Shop, said: “For British Corner Shop our customer base in Europe has, and continues to be, of great importance to us. Brexit changed the way we serve our customers, adding complexity in both the physical movement of goods and compliance in terms of the cross-border trade between the UK and Europe.

“With our new integrated, warehousing and supply chain operations based in the Netherlands, we have welcomed our first cohort of local employees and are dispatching orders for next day delivery across Europe successfully. The initial customer feedback has been extremely positive.

We feel positive that the challenges brought about by Brexit are behind us, and that we are moving forward now in way that is significantly better than before for our European customers.

World Supply Chain Day: Creativity in the electronics industry will counter chip shortages

Thanks to Brexit, the pandemic and now the Russia/Ukraine war, the risks and shortfalls in our global supply chains have become front and centre for most companies over the last two years, especially for the electronics industry.

Supply chains are increasingly recognised as a key component to business survival, success and growth, as ByteSnap found in its survey, Thriving in the Face of Change, which revealed that the electronics industry was one of the worst hit by supplychain disruptions. 82% of the companies surveyed had been adversely affected by supply chain challenges.

To recognise World Supply Chain Day on 21 April, ByteSnap’s team of embedded electronics engineers has put together some tips to help keep design projects on track and minimise the effects of supply chain disruptions:

1) Order quantities as soon as the project schematic is completed – despite the pandemic, 60% of ByteSnap’s survey respondents saw an increase in demand for their products or services, 9% experienced no change and 31% witnessed a decrease.

To accommodate the increasing demand for products and services, smart designers and manufacturers need to stay ahead with supply already in stock or en route, to match demand.

Materials requirements planning (MRP) is a system for calculating the materials and components needed to manufacture a product. It is made up of three steps:

  • taking inventory of the materials and components on hand
  • identifying which additional ones are needed
  • and then scheduling their production or purchase

This is important, particularly with specialised software, to ensure you have exactly what is needed, when you need it and at the lowest possible cost. MRP is key to improving the efficiency, flexibility and profitability of manufacturing operations.

2) Minimise risk exposure – sustainable supply chains are important so reducing the number of different components and reusing parts, when possible, can make your manufacturing process more efficient if there are any parts that become unavailable for some reason.

During the first lockdown, 18% of the electronics sector was concerned about supply chain disruption, according to ByteSnap’s survey. This has translated into 45% of companies holding more stock in-house rather than just in time (JIT) and 26% now auditing their supply chains more closely. While 10% of respondents in 2020 were considering using more domestic suppliers, the survey revealed that less than 11% actually moved part of their supply chain to the UK.

3) Improve scalability and defend against obsolescence – think about system design techniques like microservices or distributed compute across the whole product ecosystem to improve scalability and defend against obsolescence.

Microservices are a way of breaking large software projects into loosely coupled modules, which communicate with each other. This enables changes and redeploying of technology and gives you a more innovative, nimble approach to design, build and manage the project; which, in turn, brings the potential to speed development life cycles.

4) Replace single chips with discrete components – before integrated circuits, all capacitors, inductors, diodes and other input systems were individual and discrete circuits. So, if you can’t use a chip, consider using a few standard discrete components instead, which can be integrated into the same chip to reduce power consumption.

5) Choose devices which have footprint-compatible alternatives – footprint or pin compatible devices allow for the use of the same PCB without any electrical issues or risks. You can reduce risk during the early design stage by considering dual-footprint devices and pin-to-pin alternates that meet your system requirements. Manufacturers often have handy cross-reference tools which makes finding pin compatible alternatives, for parts like ADCs and DACs, much easier.

6) Design firmware to be as hardware abstracted as possible – hardware abstractions are sets of routines in software that provide programs with access to hardware resources through programming interfaces. By designing the firmware with a Hardware Abstraction Layer, you can improve portability and adaptability to different chips as your design allows for a computer operating system to interact with the device at a general, abstract level rather than a specific, detailed hardware level, if needed.

7) Reserve data within communications protocols and storage space in the firmware upgrade processes – this will enable you to account for wider support changes in the future and reduce the risk of requiring a complete new update system design for new generations of your products.

8) Port the application as early as possible – to make your design as painless as possible, port the application using reference hardware with the same chips as you are intending to use in production. By porting early, problems may come to the surface before the target design is finalised and can be easily rectified.

9) Connect with your contract manufacturers early – they may have access to search the semiconductor global supplychain and evaluate parts availability or potential shortages before you design in key components.

10) Engage hardware and software expertise under one roof – this may seem obvious, but having everything you need in one place makes it far easier than going to separate providers. Having to manage different companies can lead to delays whilst determining who is responsible for the resolution and getting this implemented. Delays affect business downtime and/or time to market.

By engaging a company that has both hardware and software design experience, you can ensure the best possible result, in the quickest time.

More people are now realising the consequences of disruptions in supply chains, and how imperative it is that they become more sustainable and have a process in place to avoid downtime.

On this year’s World Supply Chain Day, consider how essential supply chains are to our lives.

Think about how the supply chain industry has evolved and what it now means to businesses globally.

Ask yourself the question, “Is my supply chain is one that could withstand another pandemic, or not…?”

Five ways UK exporters are bucking the trend and thriving in Ireland

In a market boosted by young consumers with a willingness for cross-border spending online the Irish eCommerce market is predicted to grow to be worth a staggering €7bn in 2022.

The latter half of 2021 saw Irish consumers turn in increasing numbers to buying from international retailers.

Yet last year exports from the UK to Ireland dropped by a fifth with nearly one in four British exporters giving up fulfilling online orders citing costly post-Brexit delays. The top exports from the UK to Ireland were medicinal, pharmaceutical and consumer goods.

For the remaining British exporters continuing to meet online customer demand in Ireland there’s a clear distinction between those that are currently surviving and those that are thriving. Irish logistic firm DuTec’s managing director Sean Conway details five areas of adversity for UK exporters and how successful UK exporters have adapted to overcome these issues…

Meeting customer delivery expectations

Before Brexit, Irish online consumers were familiar with a 2–3-day delivery timescale for orders bought and shipped from Britain. Post-Brexit the reality is that it can take up to three or four weeks for a package to arrive. The consequence being that an Irish consumer will choose an alternative supplier if a UK brand cannot meet their delivery expectations.

Successful exporters are reducing the physical distance between product and consumer, bypassing the time-consuming and costly border processes that are now in place. By holding a proportion of stock in Ireland, days of time can be saved, and customer expectations can even be exceeded with expediated delivery now an option.  Beat the competition with speedy delivery.

Avoiding nasty surprises

In addition to delays, there have been many instances of Irish consumers discovering they have extra charges to pay when their goods finally arrive from the UK. These charges include VAT, Customs Charges, Handling/Processing Charges, and can be considerable, Often necessitating a trip to the courier’s depot to pay for and pick up their parcel, these nasty surprises reflect badly on the UK sellers.

Post-Brexit Irish customers are now accustomed to checking out the shipping terms to get an understanding of where an item is coming from, how long it will take to arrive, and shipping costs incurred. British exporters have found a two-fold solution. Firstly, they are mitigating the risk of variable shipping costs by using a fulfilment partner In Ireland and secondly they are reassuring online customers by clearly outlining that there are processes in place to avoid extra shipping costs being incurred by customers.

Higher import costs

Custom delays, inspections and import taxes at the UK/EU border have drastically increased post-Brexit and have been further complicated by supply chain pressure caused by Covid. Consider that a pallet inspection into the EU from the UK consists of checks on every SKU and you get an idea of the magnitude of red tape involved, especially with large volume shipment.

These “steps of pain” are being overcome by successful British exporters, partnering with logistics firms knowledgeable and familiar with UK/EU customs processes who can swiftly clear both non-EU and EU bound products on behalf of the exporters.

Handling EU to UK returns

With up to 20% of online goods returned over the 2021 Xmas period many UK exporters are incurring considerable costs attempting to facilitate returns. In this first full year of Brexit this has been somewhat of a baptism of fire for some, as goods have to leave the EU and re-enter the UK which can incur further taxes.  In addition, if a product is perishable, such as a beauty product, or if the products are seasonal  the window of time open for it to be reprocessed and made ready for re-sale before its best before date or season end  can be adversely affected by a delayed return. A recent report in the Guardian disclosed that the cost of a return in the UK costs up to £20. Factor in the added costs in coming back from Ireland and this figure could be even more for UK retailers.

Successful British exporters to Ireland find that a hassle-free returns policy drastically reduces the cost and pain of returning goods, for both the consumer and the retailer. These exporters often use an Irish logistics partner who can receive and process the returns, repurposing goods that can be swiftly re-sold. By holding returned items in Ireland, within the EU, the threat of further import taxation is negated. Non-EU products can be efficiently returned in bulk, further reducing costs.

Decreasing your carbon footprint

Direct shipping goods destined for Irish consumers from point of manufacture directly to Ireland can dramatically reduce your Carbon footprint.

Sustainability-conscious exporters are realising that the number of miles a parcel has to travel can be reduced by 5x by importing into an Irish hub at the point of supply itself. An experienced import partner can tackle the logistical and administrative tasks which when considering high volume shipping can lead to a massive decrease in carbon emissions.

INDUSTRY SPOTLIGHT: T S Europe helps you manage logistics uncertainty

The lorry driver shortage is making headlines again. Grocery store shelves are empty, the prices of goods are increasing, and businesses are beginning to worry. The logistics world is volatile as industries are faced with the challenge of acclimating to the new, demanding changes.

Amid the chaos, Transport Services Europe has embraced the storm and is actively adapting to the new changes. By continuously analysing the market, keeping up with freight affairs, and speaking to different suppliers, we have formulated a comprehensive approach to tackle the driver shortage.

The business model of T S Europe is structured around providing a service that ensures fluid and transparent communication with an emphasis on reliability, – all while remaining competitive.  As a result, we have established, maintained and developed positive relationships with clients, such as Aldi, and McDonald’s.

The impact of Brexit and Covid has led to companies being faced with late deliveries, customs problems, and a competitive market. When transportation issues arise in the supply chain, businesses and consumers alike face the consequences. As such, T S Europe highlights the importance of establishing mutual trust with your transport partners. The added security of having a transport partner by your side every step of the way is crucial for a business to run smoothly.

In times of need, a helping hand makes all the difference.

tseurope.co.uk

EU VAT changes – is your eCommerce business ready?

Doing business with Europe has become so expensive and onerous since Brexit that a vast number of UK eCommerce businesses have simply turned off all EU activities. Managing the different VAT thresholds and rates across each EU country has certainly added to the admin burden and cost of doing business – so how much difference will the new Import One Stop Shop (IOSS) make? James Hyde, CEO of James and James Fulfilment explains why businesses need to take urgent steps to ensure they can still trade after July 1st...

Harmonising VAT

As the European Union pushes forward with its plan to change the way VAT is accounted for on cross-border B2C supplies, UK eCommerce businesses need to be aware of the sweeping reforms being introduced on 1 July 2021 by the 27 member states. Designed to make it easier to account for local VAT in the consumer’s country, the new rules are also targeted at cutting loop holes and reducing the substantial value of VAT fraud. 

For UK eCommerce businesses that have wrestled with the need for different VAT numbers – as well as VAT thresholds and rates – in different member states, the creation of the Import One Stop Shop (IOSS) single EU VAT return is broadly welcomed. Allowing businesses shipping goods from their home country to customers across the EU to report all pan-EU sales in one place, the IOSS is an extension of the 2015 Mini One-Stop-Shop (MOSS), which successfully trialled a single EU return for B2C sales of digital, telecoms and broadcast services.

The process is relatively simple – a business simply needs to go online and register for an IOSS number. However, to do so requires an existing VAT number – and if a business does not already have that in place, it will require fiscal representation to acquire the number and currently, this process is taking up to eight weeks.

Reducing Thresholds

The other significant change is the withdrawal of the €22 import VAT exemption on small parcels – something that has been used – intentionally or mistakenly – by companies to avoid VAT in the past.  From July 1st VAT must be charged at the point-of-sale for consignments not exceeding €150.  Companies using the IOSS simply need to ensure VAT is calculated at the point of sale and goods will be automatically passed through customs. However, any company that has overlooked this change and continues to send lower value items into Europe will face a nasty surprise because both VAT and an admin fee will be applied, and the cost will be presented to the end customer.

For those that register in time, the use of the IOSS will create a more efficient process for quick and easy customs clearance – which should reduce delays and avoid unexpected admin fees from both customs and carriers. However, to ensure goods pass smoothly through this new ‘green channel’ UK eCommerce businesses must ensure all commercial invoices include the correct IOSS number. 

Furthermore, much of the burden of compliance to the new EU VAT regulation has been passed on to the carriers, who have only just released their technical specifications, which include electronic invoice formats. Therefore, in addition to ensuring the correct IOSS number has been attained, companies will need to determine how to create invoices in the correct format with the right information to avoid expensive customs delays.

Get Ready

Getting this process right will remove a huge component of the additional costs that have made trade with the EU far less profitable since Brexit. It will avoid the customer experience disaster that occurs when €10 admin fees and unexpected VAT liabilities are imposed on each transaction. The onus is therefore on UK eCommerce businesses to get this right – whether that is attempting to determine the technical expectations of carriers and amending IT solutions in time, or finding a fulfilment partner that can automate the process, ensuring all commercial invoices are created in the correct format, with the correct data.

And time is against UK business. With just a matter of weeks before the changes are made – it is those companies ready on July 1st that will be best placed to exploit the lower cost of sale, rapidly reinvigorating EU expansion plans that have been side-lined since January, to steal a march on the competition.

Post Brexit Supply Chain execution – managing disruption, testing resilience

By Elanders

The supply chain operational challenges caused by Brexit, compounded with the COVID-19 pandemic, have really tested the effectiveness and resilience of some current supply chain solutions. Managing the extra customs documentation; working out now what UK operational supply chain solutions are best for an organisation, the cost of getting things wrong – these and more challenges are raising the importance today of effective and agile supply chain operations.

Many market surveys in recent weeks constantly seem to report back that supply chain solutions and effectiveness post Brexit have the strong possibility of impacting overall business performance. For some organisations post Brexit, maintaining the customer market promise and service support when things go wrong for some has been a massive challenge. What was thought to be an effective supply chain solution pre-Brexit (and COVID-19) – for some, has rapidly been exposed. Global economies and extended supply chains are now seriously being challenged and recreated:

  • Brexit itself has been a one-off challenge for organisations to understand, navigate and maintain business continuity in the short term. 
  • Brexit for many has now identified that today’s supply chain solution needs a complete rethink, with a revised strategy now required that has an agile operational solution behind it. 
  • Brexit may be a unique challenge to manage today – but supply chain change and disruption will be a constant part of every business’s focus from now on. 

Elanders UK Supply Chain solutions provide businesses with an alternative. Global coverage but delivered locally to the specific customer needs. Managing the post Brexit challenges on documentation, visibility and movements; working out for your business what the new storage strategy and the associated operational solution should now be all requires a combination of executional capability, practical experience and business partnership. 

Our bonded warehouse solutions in mainland Europe and in the UK with dedicated customs experts; our end-to-end global supply chain execution solutions – these all combine to support many leading global organisations create and maintain their post-Brexit supply chain operational solution for today’s needs – but we are also agile and innovative to meet tomorrow’s challenges. 

To find out more please visit www.elanders.co.uk/brexit-services/ or contact us at addingvalue@elanders.com.

Early preparation ‘remains key’ to avoid Brexit & COVID supply chain disruption

43% of businesses have been impacted negatively by Brexit in 2021 – but 19% of businesses are thriving in a post-Brexit world.

That’s one of the conclusions of Descartes Systems Group’s latest Brexit research report: Beyond Brexit: The Realities of Brexit for UK-EU Cross Border Trade.

Following its 2020 research on Brexit preparedness of UK companies, this latest report analyses how business has been affected by both Brexit and the COVID-19 pandemic and the level of uncertainty around the future.

Undertaken by SAPIO Research during March 2021, the interviews with supply chain managers assessed the specific elements of EU trade that have been affected, the resulting disruption and the expected performance of supply chains in 2021.

Key findings include:

  • Mixed performance: 43% of businesses have been impacted negatively by Brexit in 2021 – but 19% of businesses are thriving in a post-Brexit world.
  • Disruption reality: 90% of businesses have faced disruption since the end of the Brexit transition period.
  • Economic impact of Brexit: 53% expect their 2021 turnover to be lower than if the UK had remained in the EU – and the average reduction is 29%.
  • Pandemic impact: 76% had their Brexit response disrupted by COVID-19.
  • Early preparation has proven key to success, with those businesses that started their customs filing preparations in 2019 (24%) and early 2020 (33%) thriving most.

As predicted in Descartes’ 2020 research, Brexit has had a negative impact on both business and the economy. Of the companies surveyed, 90% have experienced disruption in their ability to trade in and out of the EU in 2021 – with 20% experiencing significant disruption since the transition period ended. Despite the high level of concern revealed in the 2020 survey, 40% of companies have actually experienced worse-than-expected EU supply chain performance, according to Descartes’ latest report. Additional key findings include:  

  • 80% of businesses reported disruption to their cross-border trade with the EU or Northern Ireland (NI), rising to 93% for medium and large enterprises 
  • 40% have experienced delays in their supply chains 
  • 37% have experienced increased cost of imports
  • 36% have had to manage customs declarations 

The combination of COVID-19 on top of Brexit created unprecedented challenges for businesses of every size, in every market. Confidence has been affected. Three quarters (76%) of companies confirm that COVID-19 disrupted their Brexit response. 

However, a significant finding is that almost one fifth (19%) are actually thriving in a post-Brexit economy, with 35% of electronics, computer and telecommunications companies enjoying a positive outcome. Preparing early proved essential, allowing these companies to take a holistic approach by working closely with experts who understand the complexities of global trade and by putting solutions in place for customs declarations.

The research findings underline that with the next phase of Brexit changes – an end to deferred import declarations from July 2021, and safety and security filings required from 1st January 2022 — there are lessons to learn about the value of preparation and acting ahead of deadlines. When it comes to successful global trade, planning is not just essential for compliance – it makes a tangible difference to successful business operations. 

“Brexit has thrown many businesses into a spin, but the companies that prioritised Brexit preparation are thriving and provide a best practice blueprint that the rest of the market can now follow,” said Pol Sweeney, VP Sales and Business Manager UK, Descartes. “Our research highlights that with the changes due from July through to January 2022, early preparation is, once again, crucial to avoiding expensive disruption.”

For the full research findings, see Descartes’ Brexit Realities Report and for additional Brexit resources visit Descartes’ Brexit Resource Centre.

5 Minutes With… Hazel 4D’s LEE ARMSTRONG

In the latest instalment of our supply chain industry executive interview series, we spoke to Hazel 4D Marketing Director Lee Armstrong about the company, it’s products & services, the ongoing challenges of COVID-19 and Brexit, and upcoming opportunities…

Tell us about your company, products and services.

At Hazel 4D, we provide a wide range of innovative products that help you save time, money and the planet, but know from experience that the packaging process isn’t simply about the supply of materials. It also relies on having the right equipment, and on carefully training staff and monitoring performance, to ensure that packaging is always applied as efficiently as possible.

That’s why we offer our unique service, where we partner with you to improve your business performance and profitability – typically you will end up spending significantly less on packaging. 

What have been the biggest challenges the Supply Chain industry has faced over the past 12 months?

Partly due to the time of the year, and partly due to the situation that Covid and Brexit have brought upon us, lead times of packaging products are extending every day at the moment. Here at Hazel 4D we are working hard to ensure that we continue to meet your needs. We have increased stocks substantially to ensure that we can support you with covering your Christmas/seasonal trade, as well as the additional pressures of panic buying and the huge increase in E-commerce.

And what have been the biggest opportunities?

There’s been exponential increase of end users buying online has created huge demand for effective packaging.

Investing in PPE products at the request of customers. The company has helped multiple businesses by supplying these products and has even taken on new customers as a result of this. Successfully pulling through a difficult time.

We took the opportunity to help out the community as much as possible. We donated cardboard boxes and E-tape free of charge to our local Burberry site that was producing PPE for the NHS – Read article here: https://www.hazel4d.com/en/page/550/hazel-4d-news-ppe-for-the-nhs

Hazel 4D donated a number of poly bags to a local seamstress hoping to put a smile on the faces of frontline workers. Read article here: https://www.hazel4d.com/en/page/551/hazel-4d-news-polythene-bag-donation

What is the biggest priority for the Supply Chain industry in 2021?

Ensuring that business can continue without interruption whatever the outcome of Brexit.

What are the main trends you are expecting to see in the market in 2021?

An increase in online shopping and e-commerce – We’re expecting the economy will improve and consumer confidence will rise making B2C suppliers even busier.

What technology is going to have the biggest impact on the market this year?

We expect to see a huge focus around recycled products into plastic products such as stretch film, driven by the Plastic Packaging tax coming in 2022.

In 2022 we’ll all be talking about…?

Looking back on 2020 and how the pandemic has changed the world for forever, with more of a focus on e-commerce and sustainable packaging alternatives.

What’s the most surprising thing you’ve learnt about the Supply Chain sector?

Just how resilient, adaptable and flexible it’s proved itself to be during the turmoil of 2020.

What’s the most exciting thing about your job?

The people that I interact with on a daily basis and the work that we do together to solve challenging packaging requirements. We’ve worked with a multisite printing company this year to significantly improve their pallet wrapping process whilst saving them around 70% on the cost of every pallet they wrap. One happy customer!

And what’s the most challenging?

Taking on a new role of Marketing Director for the company and writing a marketing plan for 2021.

What’s the best piece of advice you’ve ever been given?

You progress faster when you’re working outside your comfort zone.

Retailers to on-shore £4bn of products to the UK as COVID-19 ‘resets’ supply chain strategies

More than £4.2 billion of products will be on-shored to the UK by retailers in the next 12 months in a move that would represent a significant fillip to manufacturing, being equivalent to the country’s entire current clothing manufacturing output.

That’s according to a new report by global professional services firm Alvarez & Marsal, in partnership with Retail Economics, that estimates that COVID-19 has created new pressures on retailers, exposing weaknesses in global supply chains and leading many to rethink strategies for the future to remain resilient.

Nearly three quarters (70%) of Europe’s largest 30 retailers say they have conducted a review of their supply chains as a direct result of the pandemic.

Of the same group of retailers, more than half (55%) have already begun to diversify their suppliers, with 29% planning to do so within the next 12 months. 14% are already sourcing more from domestic economies, with almost half (42%) planning to do so in the next 12 months.

Erin Brookes, Managing Director and Head of Retail and Consumer, Europe, A&M said: “COVID-19 has brought about a fresh set of financial and logistical challenges which retailers must overcome while accommodating permanent shifts in consumer behaviour. Our research shows that despite these new pressure points, most retailers are responding at speed, creating new growth opportunities within their domestic economies and protecting against future risk.

“This Christmas will be a major test for this new operating environment. The structural shift towards online will place extraordinary pressure on distribution and in some cases, we are likely to see supply not meeting demand. Meanwhile, new lockdown measures which prevent most physical retail from opening over key sales moments like Black Friday will only exacerbate these challenges. In the next few weeks, retailers will need to deliver a steady flow of online sales to contain the usual last-minute rush.”

The report says retail businesses are being forced to reassess the future of their supply networks and how they can not only meet COVID-19 related challenges, but simultaneously address underlying structural changes to ensure they are future-proofed.

Now the initial shock of the pandemic has resided, businesses and governments are considering how to build back better, with sustainability playing a major role. As European retailers come under increasing pressure to create visible ESG commitments, 70% of the retailers surveyed have already begun changing the way they source products to help meet their goals – with the remaining 30% planning to do so in the future.

Part of these plans also incorporate on-shoring, with 46% stating they already source more from their domestic economies to help meet ESG targets, while 39% suggest they intend to in the future.

Retailers are also increasing their focus on sustainability in response to growing consumer demand for ethically sourced goods. A third (32%)³ of U.K. consumers say they would be prepared to pay more for products sourced from Britain to help meet carbon emissions targets, while a further 35% would if there was no impact on price.

The COVID-19 crisis has put even greater emphasis on using technology to build more resilient supply chains and accelerated trends towards digital trade and e-commerce. Technological innovation and adoption will shape the future of supply chains, helping to streamline operations and drive efficiencies.

Of the retailers surveyed, the majority recognise the need for continued investment into technology, with 77% who are considering investing in digitalisation, 63% in automation and 23% in artificial intelligence.

Tim Waters, Managing Director and European Supply Chain Practice Lead, A&M said: “The impact of the pandemic has been felt throughout retail supply chains across the world. Despite significant distress and disruption, COVID-19 has also acted as a catalyst for change for retail businesses, with evolving consumer behaviour, ESG commitments and technological potential leading new strategic thinking. 

“Across all sectors, businesses are looking for ways to rebuild for the better, with sustainability swiftly climbing agendas. Our research highlights that on-shoring operations is already underway for many retailers. Not only will this help to create more ethical supply chains, it will help to manage future risk.”

Away from the pandemic, the uncertain outcome of the ongoing Brexit negotiations will have significant repercussions for UK retailers and their supply chains, with no-deal creating costly delays and interruption. According to A&M’s analysis, a no-deal scenario would create new tariffs of £7 billion for UK businesses, with most of the burden placed on food (17.1%) and clothing (10.6%).

As such, A&M’s research suggests that European retailers are reluctant to commit to any permanent changes to their supply chains until a Free Trade Agreement (FTA) is negotiated between the U.K. and the EU.

OPINION: UK Business ill-prepared for post-Brexit Customs Complexity

2020 was meant to be the year of ‘Brexit Preparation’. When the UK left the EU on January 1st2020, firms involved in trade with the EU were set to spend 12 months on robust planning, maximising the 12 month Brexit transition period to understand the new trade and customs requirements. The transition period provided time to put in place the systems and expertise required to manage trade and the customs declarations that will be required with the EU. 

Since March, however, Covid-19 has wrought unprecedented change throughout every supplychain – and many firms felt they had no option but to shelve Brexit planning, and in many cases also use cash and stock initially reserved for Brexit-related disruption, simply to survive. With the deadline fast approaching, however, and the option of a ‘no-deal’ Brexit on the table, the lack of preparedness is beginning to raise concerns. 

As Andrew Tavener, Head of Marketing at  Descartes, argues, UK businesses are largely ill-prepared for the customs complexity post-Brexit. Companies need to take action now, or potentially risk supply chain disruption at a level far greater than that experienced during the onset of Covid-19.

Brexit readiness assessed

During July 2020, Descartes commissioned independent research to ascertain supply chainmanagers’ general expectations around the impact of Brexit. The findings were stark:

  • Two thirds of businesses have had their Brexit preparations disrupted by COVID-19.
  • Less than a quarter (23%) have high confidence in their ability to cope with the extra administrative burden of Brexit.
  • Two thirds (67%) of large firms are very or extremely concerned about longer delays in their supply chain impacting the business post-Brexit.
  • Fewer than one in five (18%) of UK businesses are prepared for a ‘no deal’ Brexit.
  • Almost three quarters (72%) are concerned about the customs brokerage market’s capacity post-Brexit.
  • Two fifths (40%) are concerned about customs declarations impacting their business post-Brexit.

With just a few months until the the end of the Brexit transition period, the lack of certainty surrounding the deal still under discussion between the EU and UK is undermining business certainty. Just over half (52%) think a UK-EU trade deal is unlikely to be achieved in 2020 and only one in ten (10%) supply chain managers claim to have total certainty regarding the impact of Brexit on their business. Furthermore, despite the consensus regarding the likelihood of a ‘no deal’ Brexit, fewer than one in five (18%) are prepared for a ‘no deal’ exit from the EU.

Delays to the supply chain (45%) are the biggest concern regarding the impact of Brexit on cross border trade. However, the larger the organisation, the greater the concern regarding supplychain delays: 56% of supply chain managers in firms with over 1,000 employees are worried about delays to the supply chain. The impact of such delays also raises serious concerns: two thirds (67%) of larger firms are very or extremely concerned about longer delays in their supplychain. Over two thirds (68%) of supply chain managers within healthcare are also concerned about supply chain delays. Tariff payments (40%) and customs declarations (40%) are the next highest concerns. 

These findings underline a key fact: those organisations and supply chain managers with existing experience of customs declarations are far more worried about the implications of Brexit on the business than those who have yet to discover the complexity of customs processes. Significantly, with consumer behaviour having fundamentally changed during COVID-19, this inexperience is likely to catch out many smaller sole traders who have moved to an ecommerce model and rely on trade with the EU during the pandemic.

Understanding Customs Complexity

For any organisation hoping for a last-minute reprieve, customs declarations will be required regardless of whether the UK strikes a free trade deal with the EU. Even companies that opt – and are allowed – to defer import customs declarations for six months must still maintain detailed records of goods brought in. Furthermore, many smaller organisations appear unaware that Brexit affects every import or export with the EU: it will no longer be possible to simply load up and drive to another country to deliver and sell goods without paperwork, or for e-commerce traders to simply post goods to a consumer in Paris or Cologne as if it were Birmingham or Manchester. Customs declarations will be mandatory.

There are essentially two approaches that companies can consider: complete declarations in-house or use an intermediary – a customs broker or freight forwarder – to handle the process.  Relying on the latter option, however, could be difficult given the expected huge increase in demand due to Brexit. Government figures suggest that British companies trading with Europe will have to fill in an extra 215 million customs declarations a year post Brexit – with a potential cost to businesses of around £7bn a year. There are simply not enough third-party providers to support this huge increase in demand – a fact clearly recognised, with our research confirming almost three quarters (72%) are concerned about the customs brokerage market capacity after Brexit.

Yet when less than a quarter (23%) of companies have confidence in their ability to cope with the extra administration associated with Brexit, and 40% are concerned about customs declarations impacting their business post-Brexit, the options if customs brokers are not available are limited.

It is possible to file directly with HMRC – but how confident is the business in its ability to check the classification and valuation of goods to ensure the right commodity codes are used? Determine the need for licences for restricted or hazardous goods? Prepare and submit the correct documents to ensure there are no delays at the border? And what about taking advantage of customs authorisations, including Inward Processing, Customs Warehousing, Transit and Customs Freight Special Procedures that could simplify the paperwork requirements for importers trading heavily with the EU or moving goods through multiple territories? Any firm wanting to use these procedures will need to be authorised by HMRC. What about the option of a six-month deferment for import declarations, which will require the business to open a deferment account with UK customs?

Taking Control

Any company deciding to self-file should consider a software system that can streamline the process, from data consistency to the use of templates to speed up the creation of documents for routine product import. The Government’s Custom Grant Scheme provides support for businesses needing to invest in both technology and training. Combining a Software as a Service (SaaS) customs solution that ensures all regulatory changes are automatically updated and available, with staff training to achieve in-house expertise, provides a strong foundation not only for handling the complexities of post business activity but also future business development.

One of the key aspects of self-filing is the ability to immediately understand and manage landed costs. Import and export duties and tariffs create a new cost model that businesses need to understand rapidly. With different tariffs applied based on a range of factors, from place of origin to method to transport, the ability to monitor landed costs will provide companies with the chance both to manage the new cost models and take strategic sourcing decisions. With over a third of firms confirming they have or will by the end of 2020 looked for new sources of goods (35%) and imported goods early to protect supply chains (34%), factoring in the landed costs will be key to creating the correct customer pricing model and retaining margin where possible.

For ecommerce businesses, immediate insight into landed costs will be essential to provide customers with accurate pricing. No business wants to risk shipping individual items cross border, all the way to the customer’s door, only for the item to be refused when the courier demands the additional £20 customs duty payment, for example. Being able to integrate customs solutions into the ecommerce platform will support accurate real time pricing information.

Software can also support firms that decide to use customs authorisations, including Inward Processing, Customs Warehousing, Transit and Customs Freight Special Procedures; as well as providing the detailed record keeping required for companies that have deferred import customs declarations for up to six months. Essentially, the software will create the declarations without submitting them, providing a detailed declaration report to the business to deliver essential insight and take control over the new import/export cost model post the Brexit transition period.

Conclusion – Preparing for Change

Growing numbers of organisations are beginning to recognise the implications of the Covid-19 pandemic extend far beyond the extraordinary supply chain challenges faced over the past few months: consumer behaviour has changed fundamentally. Retailers estimate the shift from bricks & mortar to ecommerce has massively accelerated, achieving a change within three months that was previously expected to take at least three years. While companies may have recognised the increase in customs declarations that will be required as a result of Brexit, the shift towards ecommerce and direct to consumer delivery will not only increase those numbers, it is also likely to catch a number of the smaller sole traders by surprise.

With 30% of organisations experiencing major uncertainty with regards to the impact of Brexit on the business and its supply chain, and the end of the Brexit transition period fast approaching, the onus is on business to take action today, and make the changes that can enable firms to become 100% confident with regards to customs declarations from January 1st 2021.