Brexit - Possible "No Deal" implications -
We are sure we all hold our own opinions on both "Brexit" and what may happen after 29th March, however, the possibility of a "No Deal" / "Hard Brexit" outcome is looking more likely, as this gets closer we are being advised of the possible impacts on our raw materials.
We are holding more raw material than ever, up by around 25%, as are our suppliers, who are also reviewing their transport options / routes, but they are now stating that "we encourage you to enter your orders before early March", "Delays may occur in Customs clearance procedures resulting in longer supply lead-times.."
With this in mind we will be reviewing further our stock, with the possibility of holding more.
Of more concern, is the cost implication and how this may be passed on. In the event of a "Hard Brexit", trade could continue under World Trade Organisation terms, this may see tariffs, import fees and brokers fees, the exact fees and costs still unclear.
Even more unclear is how these costs would be charged, by their nature, these would/may occur after order/dispatch and it is likely the extra charges "would be charged through a surcharge in a separate monthly invoice".
So, it is possible, that we too would need to be passing on such an invoice once we had had the costs through.
All the more work for us, as one order of raw material may cover several jobs and customers and so we would need to allocate a % of our "surcharge invoice" according!
The latest correspondence ends -
Whilst we have diligently reviewed our processes and the potential impacts of a “No Deal” Brexit, it is not possible for us to anticipate all possible consequences of this scenario or their duration and their potential impacts on supplies to our customers. Please be assured, however, that we are striving to minimise all potential disruptions wherever possible.
We would echo this.
The above is for your information, and we will need to gain further detail from our suppliers, once they are in a position to offer such. So while we cannot state what the costs are likely to be, we can only advise that in the event of a "No Deal" / "Hard Brexit", cost may be affected, and while we do not want to cause any panic, we do need to keep you advised of what may be ahead.
As we do get further details, we will do our best to keep you advised.