It’s two years on from Brexit and so it’s timely to look at the current transit times from our suppliers and cost changes around the EU. As a recap, it used to be door-to-door ten days max for all EU collections. The average single pallet collection cost £180. All fairly standard.
Today, after trying out a few logistics suppliers, we have settled with companies that offer the best out there from what we can see. Our previous pre-Brexit EU logistics suppliers stopped EU-UK altogether six months after Brexit as it wasn’t viable for them.
So today we have three different logistics companies that look after us in different parts of the EU. One does Germany, Austria and France. Another covers Spain and Portugal and the third looks after Italy. We have a fourth for non-EU.
So this is manageable but has added complexity as each company works differently, as you might expect. As for lead times, these vary dramatically.
Without a doubt the fastest is Spain and Portugal. This can be just as quick as pre-Brexit times IF you do your own UK documents. However the cost per pallet with EU documents included is £400 on average. Multiple pallets are, of course, less across the board.
Germany, France and Austria averages out at 3-4 weeks door to door and, again, costs hover around the £400-£450 mark per pallet. Again, zero chargeable cost for UK documents as we do them, but they cost us the time and resources in house.
Finally, Italy, which has taken up to 12 weeks and the fastest has been 7 weeks. Costs again are hovering around the £400 mark.
So two years down the line the timescale for transporting goods has doubled since Brexit kicked in and lead times overall are much worse. My forecast from two years ago was correct that the end user is paying about £1-£1.50 a bottle more to cover Brexit-related cost.
Please note that because lead times are longer that puts additional pressure on businesses to hold additional stock, and that means higher costs in warehousing and physical stock, which in turn reduces cash flow and, as any director knows, cash is king.
You may recall the government said these would be teething issues at the start. Turns out the costs are very much here to stay unless you open a business in the EU. Then it’s possible to mitigate some of the costs.
I moved to France over seven months ago and should be up soon on the business front. Once I am, it’s looking like I will be able to do all the EU paperwork, too, after my long conversation with French customs to get all the relevant approvals including EX1, which is the most tricky one to get.
The UK Government doesn’t want to talk about Brexit anymore because they know it’s costing everyone a fortune for zero benefits. We all know the it’s a pain in the ass now. But it’s important to realise and be honest about the real additional costs.
With all this factual evidence of two years’ worth of trading, I do ask myself why would you want to cripple an entire economy just to suit a small minority?
Brexit could be reversed if the will was there. I personally think that’s a decade away. In the meantime, the UK will lag behind the rest of the European continent as it did in the early 70s and it would seem that suits the current government perfectly.
It’s also worth noting that after speaking to a handful of EU retailers saying we can supply directly from our UK Bonded Warehouse, the conversation ends abruptly. EU SMEs ARE AVOIDING UK COMPANIES DELIBERATELY! You can hardly blame them either! Would you want the hassle?