Written by: Keith Tully
Published: 24th September 2018
Delays at customs check points lasting anywhere between 10 minutes and half an hour could be enough to make one in 10 British companies bankrupt.
That’s according to a recent survey of over a thousand supply chain bosses within British and European companies carried out by the Chartered Institute of Procurement & Supply (CIPS).
The warning comes as concerns are growing that the UK may be unable to agree any form of transitional deal with the European Union ahead of Brexit, which is scheduled to happen at the end of March 2019.
Among the many uncertainties around what impact a No Deal Brexit might have on businesses are issues surrounding customs checks at major ports.
Companies across the country and across Europe are increasingly fearful that no Brexit deal will result in severe delays in places like Dover and a litany of logistical headaches for supply chains in all manner of different industries.
The CIPS’ research found that a quarter of British companies are planning to stockpile products in an effort to offset potential problems resulting from customs delays next year.
Around 50 per cent of respondents to the institute’s survey said that their company would struggle to find the suppliers and skills they currently rely on in the UK after Brexit.
For many, the prospect of bankruptcy cannot be ruled out, with the general sentiment being that the chances of such a scenario would increase the longer their supplies were delayed.
According to the CIPS survey, if customs delays post-Brexit were to last for between one and three hours on a routine basis then around 14 per cent of UK companies would be in danger of going bust.
“The UK economy could fall off a cliff on Brexit day if goods are delayed by just minutes at the border,” said John Glen, an economist at the CIPS.
“Businesses have become used to operating efficiently with exceptionally lean, frictionless supply chains, where quick customs clearance is a given.
“Customs delays would not only affect businesses, but would also lead to a shortage of products on shelves and an increase in prices for consumers as well.”
28th July 2021
The number of UK companies in positions of ‘significant financial distress’ were up 24 per cent at the end of the June 2021, as compared to the same point of last year.Read More
22nd July 2021
The Confederation of British Industry (CBI) has called for an “immediate rethink on self-isolation rules” to help businesses manage their workforces as the economy reopens and recovers.Read More