What can you do to protect your business from delays at Dover?

25 May, 2018

It is less than a year to go until we exit the EU, and despite the apparent progress made on agreeing some aspects of the transition deal, it is still possible that Britain will exit the EU without an agreement with the EU on customs and borders.  The results of a recent joint survey of businesses between the Port of Dover and the British Chamber of Commerce[1] suggest that a number of businesses haven’t yet formulated plans for dealing with border checks.  This is the case even where  businesses operate on a “just-in-time” distribution model, meaning that goods are delivered as and when there are needed, rather than some time in advance, for which delays could have even more of an impact.

So what, practically, are your options to make sure your operations continue to flourish post Brexit? Your business model will be unique, but there are some areas that are common to most businesses which use the ports.  Use resources available through your particular trade body if you have one, or other local and national trade organisations. Look to have someone in your organisation dedicated to understanding the impact of Brexit on your business and finding ways to minimise this.  Make sure you look at your technology too – are your systems flexible enough to deal with changes to taxes, tariffs and customs requirements if additional records are required for example?

When focussing on your imports, consider what you are importing and how much of it, where it comes from, where it’s going to, how long it currently takes and factor in potential delays at the port. For each component part, look at the potential effect of tariffs under WTO rules (as the worse case scenario) – how much would this add to the cost of your product?  Is it worth looking a non-EU markets which although further away, and subject to their own tariffs and border controls, may now be more cost effective because of lower base costs?  If Dover is going to be the biggest bottleneck for EU trade, can you look at using other UK ports? 

Do the same with your exports – what are you exporting, to where and how long it currently takes to get to its intended destination.  How much does exporting currently cost you and how might this increase because of changes to tariffs and because of a longer time to get your product to its intended market?  Can you look for new markets outside of the EU? Would setting up an operation within the EU benefit you?

Don’t forget to look closer to home too.  Are you able to source products from within the UK? Avoiding costs from tariffs and delays may now make this option more affordable.  Can you in-source production? Consider whether 3D printing or other new technology could mean you are able to make components yourself.

Finally, are there any parts of your business that could benefit from economies of scale/consolidation?  Potential partnerships or mergers may now look more attractive.

Businesses reliant on the ports should be looking closely at their operations to understand the potential effect that the imposition of tariffs and customs could have, and putting together a plan to deal with the worst case scenario.

For advice on all aspects of your trading business, please contact Tom Trowhill.

[1] http://www.britishchambers.org.uk/policy-maker/policy-reports-and-publications/bcc-infrastructure-survey-2018.html