Supply chain issues and Brexit planning statement
Brexit Statement – Updated February 2020
The UK has left the EU as of the 31st January 2020. There is now a transition period until the end of 2020 while the UK and EU negotiate additional arrangements.
The current rules on trade, travel, and business for the UK and EU will continue to apply during the transition period. New rules will take effect on 1 January 2021. The government has confirmed plans to introduce import controls on EU goods at the border after the transition period ends on 31 December 2020. This will mean traders in the EU and GB will have to submit customs declarations and be liable to goods’ checks. The chancellor has also confirmed that the policy easements put in place for a potential no deal exit will not be reintroduced as businesses now have time to prepare.
There are a number of reasons for implementing import controls:
- to keep UK borders safe and secure so the government know who’s coming in and how often, what they are bringing in, and why
- to ensure the UK treats all partners equally as the UK begins to negotiate trading arrangements with countries around the world
- to collect the right customs, VAT and excise duties
- the EU has said it will enforce checks on our goods entering the Eurozone. The UK will likewise enforce it’s own rules for goods entering the UK
Whilst parliament has passed a law to stop a ‘No deal’ situation, it still remains uncertain as to the eventual outcome if there is no EU-UK trade agreement in place at the end of the transition period at the end of 2020. A No Deal outcome would sever all ties with the EU with immediate effect. This could cause potential significant short term disruption to businesses in terms of; customs, taxes, import prices, finance, operations, employees, products, regulations and supply chain. All future trade from the time of leaving would be on World Trade Organisation (WTO) terms and have implications on the existing supply of all imported goods and services.
Camlab have assessed the risk of this No Deal scenario to have decreased somewhat but if it takes place, it is likely it would have an initial adverse supply chain impact that will affect both our customers and suppliers. We have reviewed our stocks and identified a number of critical ‘A line’ consumable products. We have already communicated with our Suppliers and have recommended that they hold additional buffer stocks to cover such an eventuality or utilise space at the Camlab warehouse to increase product availability.
We continue to communicate regularly with our staff regarding any residency issues for them and their families. We will be providing financial or other assistance with citizenship applications and visas to ensure continuity of employment and customer service.
We have put in place Brexit mitigation plans for a ‘No Deal scenario’ to try to minimise the supply chain disruption and negative impact for our customers on critical products pre and post the Brexit deadline. We have reviewed the customs compliance process and whilst this is not necessary, we have registered for the HMRC ‘Transitional Simplified Procedures’ to reduce the amount of information needed for an import declaration when goods are cross the border from the EU. We no longer see a requirement at this time to obtain accreditation as an Authorised Economic Operator (AEO). We are already a long term experienced international importer and exporter of goods to and from the UK, however we will provide additional resources and training for more of our staff to help facilitate this process.
We are anticipating additional delays at the customs border, combined with extended delivery periods on imported goods due to the enhanced regulations and potential lack of availability of transportation from a number of ports. We are regularly reviewing our stockholding, particularly on critical products and spare parts for maintenance and repair to manage these anticipated extended delivery periods. We are expecting potential significant market volatility over the coming months, which could adversely affect the current UK economic and supply chain environment.
Where possible we are identifying alternative manufacturer’s products for our current fast moving critical products and on request will provide samples to customers to pre-approve these alternative items as backup, critical for their work, prior to Brexit. If however any customers who are not currently purchasing these critical items from Camlab and wish to consider Camlab as a secondary or dual-source for these goods we would be happy to also discuss their requirements for inclusion in our stock planning process or to be listed on their system as an alternative source.
We have assessed that there is also likely to be an adverse impact on both currency and costs of imports. Our suppliers may also increase prices on short notice. We wish to minimise the impact of this by increasing our stock holding and are encouraging our customer base to pre-order critical items so this can be included in our planning. This will reduce the cost impact for those customers who can commit to a pre-order.
Price increases from suppliers or from poor Sterling/Euro exchange rates are expected and we will work with our suppliers to try to provide an adequate notice period for all customers. To do this effectively we will work closely with both our suppliers and customers to achieve the correct stock holding balance in the supply chain in a potentially difficult and uncertain volatile trading environment.
We are aware that we may find abnormal quantities are purchased prior to Brexit or ‘panic buying’ may take place causing a run on certain items and a ‘stock out’ situation on critical products such as Personal Protective Equipment (PPE), Laboratory consumables, reagents and kits. We will endeavour to manage our stock accordingly for those customers who have engaged with Camlab; however we may not be able to fulfil all orders in such a situation without prior knowledge of their usage.
To assist this mitigation process we are happy to receive or provide (if needed) individual customers annual usage data to assess their requirements during this period. Whilst we cannot predict the exact reaction of the laboratory market to a ‘No deal Brexit’, we wish to re-assure customers that we are doing what we can to ensure we provide continuity of supply and enter into a constructive dialogue prior to Brexit with both our customers and Suppliers.
We are asking our customers to let us know which products are critical to their business or research process and where possible to plan forward deliveries of these items to help mitigate this potential supply chain risk as a consequence. We are therefore encouraging our customers to place forward orders that allow us to ensure both continuity of supply during the Brexit disruption period.
You can view our Brexit Readiness Questionnaire and our Risk Assessment by clicking on the buttons below