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Brexit supply threat ahead of peak trading

As the Brexit deadline looms, retailers and suppliers have expressed concern about distribution disruption ahead of peak trading, as a result of customs checks and new tariffs if a deal with the European Union cannot be struck.

“It’s going to be an absolute disaster,” one menswear supplier told Drapers. “I do not believe that the HMRC or any logistics companies are even in the least bit prepared.

“If Brexit is carried out on 31 October, the impact is going to be felt for the next six to eight weeks. Retailers are already reeling with the lowest footfall on record and this will stifle the retail market further by a lack of supply.”

He added: “Retailers will just cancel the goods and the suppliers will suffer. It puts everyone at risk, but one has to ask how much money to invest in preparing for something that may not even happen?”

Another supplier added: “The problem we have or the position that we’re in is that all of our products are bespoke, so there’s nothing we can do after it has started being produced. Anyone who turns around and says, ‘I wasn’t expecting a tariff,’ should have opened their eyes for the past three years.

“As to whether or not deliveries will be disrupted – we don’t know. We can only hope that the freight companies have put things in place.”

One retail chair agreed disruption is unavoidable: “If there is a no-deal, then we’re facing problems at customs, a shortage of goods and things getting stuck. If we have a deal, depending on the nature of it, there will still be disruption.”

Short-term delays are to be expected warns Pauline Bastidon, head of European global policy at the Freight Transport Association: “We are anticipating serious difficulties for at least a number of weeks or months, but it’s difficult to predict with great certainty.

“The big retailers are all working on a 24/7 basis trying to find solutions, but we still have quite a few gaps in information and things are not yet fully clarified.”

However, other suppliers importing from outside the European Union were less concerned that they would face the impact of a Brexit backlog at the ports.

“There may be a few deals delayed because of things coming in from Europe, but I can’t see that there is really going to be that much of a difference,” said one. “They will have to get on with it.”

To avoid delays on imports from Turkey coming through the Europe, Clyde Buntrock, CEO at logistics company AllPort Cargo Services told Drapers it had been advising fashion retailers to consider containerised sea freight.

“Transits are down to nine days,” he said. “Traditional Turkey shipments would come up via road and roll on/off through European gateways, which may be affected with congestion by Brexit, whereas containerised freight does not.”

Buntrock also said several retail customers planned to move distribution activities from the UK to the EU.

The Brexit deadline falls in the crucial peak trading period for the industry at a time when the market is already “volatile”, making trade more unpredictable, noted one industry director.

“One of the more challenging things is the volatility and unpredictability that then creates. We are seeing more volatile trading: you have really good weekends followed by really slow weeks.”

She added:There is nothing about what is happening in the political environment that will encourage people to buy.”

Another multiple retailer told Drapers: “It’s incredibly hard trading. I don’t know that there’s any sentiment other than ‘batten down the hatches’ and make sure you give the customer every reason to be spending with you. Everyone is having to fight jolly hard to get themselves seen.”

 

 

 

 

 

Readers' comments (1)

  • Absolutely right. A no deal, no transition Brexit will affect retailers of European product and the entire supply chain.
    Manufacturers bringing garments into UK from EU, Turkey, Macedonia, Belarus etc are likely to face long delays at the ports, potential discounts from retailers for late delivery, cashflow issues because of the longer gap between paying factories and being paid by retailers, risk of cancellation as stock misses it's retail phase, currency devaluation and an argument with customers over who is going to pay the import duty.
    Making a profit from European production went out of the window 3 years ago.
    If we have a hard Brexit, I think a lot of suppliers and retailers will throw the towel in.
    Good luck to us.

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