Latest UKWA survey chimes with National Audit Office report findings
The report by the National Audit Office, ‘The UK border: preparedness for the end of the transition period’, which was published today, chimes with findings of the latest survey of members conducted by the UK Warehousing Association (UKWA) last week, says UKWA CEO Peter Ward, with 88% of respondents stating that they do not believe their customers are prepared for the impact of UK’s transition from the EU on January 1st 2021.
While 78% of UKWA members said that they were aware of the Border Operating Model, only 40% felt that they were prepared.
“The intermediaries – namely those operating in the logistics industry – have been kept well informed and in many cases have helped shape the Border Operating Model via their Trade Associations,” Peter Ward said. “However, traders themselves have not received clear or detailed communication from the government on what to prepare for or how to prepare for it.”
He added that a combination of factors, including the COVID pandemic, had distracted businesses from focussing on combatting the inevitable supply chain disruption caused by some 200 million additional customs declarations being required after January 1st.
“A degree of apathy has settled in after three Brexit ‘deadlines’ have come and gone, with companies stockpiling each time in preparation for supply chain interruption at some considerable cost,” Peter said. “There is also a widespread sense, fed by the national media, that all will be ‘alright on the night’ if we can just secure a Free Trade Agreement. Our message is – and has been for some time – that deal or no deal, traders in the UK will be in a new operating environment from January 1st regardless. We will be out of the Customs Union and therefore the government’s agreed future Brexit Border Operating Model will be in place, along with new procedures and new IT systems, many of which remain untested. What it will not be, even if we secure a Free Trade Agreement, is ‘business as usual’.”
Warehouse capacity running at sub 3%
The other key finding of UKWA’s member survey is there is less than 3% available warehouse capacity nationwide.
This equates to approximately 360,000 pallets, which is insufficient as this aggregate is composed of small ‘lot’ sizes of 100-200 across some 3000 locations nationwide.
With flows continuing into UK from the Far East and elsewhere, whilst non-essential retail outlets are closed again under the new COVID restrictions, UKWA believes the situation will quickly become critical.
“UKWA warned of an impending crisis of warehousing shortages earlier in the year, but this was mitigated as the economy opened up again,” Peter Ward commented. “However, now we are into peak season and the pressures on space have increased.
As far as Brexit is concerned, we anticipate a small increase in availability of around 1% post peak, with a paltry 120,000 becoming pallets available going into January.”
Peter concludes, “UKWA, along with our peer Trade Associations, have continued to engage with the government, providing feedback from the ‘coal face’ and disseminating vital information to members. We have also been vocal in warning of the unpreparedness of businesses for the transition from the EU. Whilst we welcome the recognition of these challenges, as outlined in the National Audit Office report, awareness of the threat of unpreparedness has come somewhat late in the day.”
The UKWA survey confirmed that 25% of UKWA members consider Brexit (the end of transition period) the biggest risk going into 2021, with concern for customers’ survival beyond the twin threats of COVID and Brexit cited by 34%.