The impact of Brexit has had far-reaching consequences. The UK manufacturing sector, which relies heavily on imports and exports, has been particularly hard hit by reams of red tape and rising transportation costs.
According to the Office for National Statistics (ONS), in January 2021 alone, goods exports between the UK and the EU fell by a massive 40.7%. Imports also fell by 28.8%. In February 2021, the UK’s manufacturing activity growth plummeted to the lowest it’s been in the previous nine months.
Things haven’t improved much since then, and the UK manufacturing sector continues to take the hit, especially for smaller companies and supply chains.
“How do we move forward?” is the question we all want to answer.
The answer lies in going local.
The end of the Brexit transition period has taken its toll on manufacturers. Companies in both the UK and the EU have been battling customs paperwork since January 2021, and it’s not getting any better.
Despite the government publishing many guides, it’s still a minefield. Local manufacturers often don’t have the time, or the resources, to deal with it.
For example, small manufacturers don’t usually have enough stock to fill a lorry; they just pay for the space they use. This results in hundreds of different items being transported to or from the EU on one lorry. Customs is now a logistical nightmare, and if one supplier filled a form out incorrectly, it causes huge delays.
Freight cost is another big issue. Post-Brexit, freight costs – especially for sea containers – have jumped up due to a shortage of cargo and Covid hold-ups.
While Brexit has brought about plenty of issues for the manufacturing industry, there is a way around this. Buying parts and components from local UK manufacturers eliminates the need for freight and cross-border paperwork.
A local manufacturer with warehousing and storage facilities is ideal, particularly if a company uses just-in-time or Kanban manufacturing processes, as it lowers inventory costs. Many local manufacturers also provide in-house delivery services, which eliminate the need for long-distance transportation and delays.
It’s also worth noting that the UK can now form trade deals with non-EU countries (such as the major trade deal we signed with Australia in June 2021). There is also talk of the government offering financial support to specific industries.
There is light at the end of the Brexit tunnel; we just need to think outside the box – and local.
For further enquiries or more detailed information please call us on 01473 828000 or email us at sales@skar.co.uk