If you are wondering “how will Brexit affect the paper and cartonboard industry?” then join the queue. We all are! Naturally, Chapelton have been answering that question and preparing for the various scenarios over the past 12 months.
BREXIT CHECKLIST DOWNLOAD: to help you plan for your paper and cartonboard requirements please download our “10 things to consider pre Brexit” and request a free ‘Brexit Planning’ call.
Despite the government changing their plans and minds on a daily basis some things are clear. A lot of changes will come with the final decision, it will impact many of our lives in one way of another. When it comes to the paper and cartonboard industry nothing is yet clear, however as many of the suppliers to the UK are based in Europe it is certain there will be some period of adjustment needed.
So what could Brexit mean for you?
Below are a set of key subjects that you should be considering. If you have any questions, please of course just ask us here at Chapelton.
Deliveries/Imports
It is widely speculated that the biggest impact will be on shipments from Europe to the UK. Getting the goods into the UK will potentially take much longer than it currently does, with customs clearance, taxes and duties the processing time of arrivals may increase dramatically. This in turn will impact delivery slots and material arriving at its destination on time. It could cause delays across many business sectors who are relying on their deliveries.
ACTION: Plan ahead where possible, be prepared for delays and arrange print job and production plans with some leniency.
Logistics
Logistics have in the last 18 month had problems due to changing legislation leading to an increase in basic costs and shortages of drivers. It can be assumed that Brexit will put more pressure on the already troubled logistic sector. With the change in duty and customs processes, as well as potential import charges and extra waiting times, getting deliveries on time and without extra charges may not be possible in the months following our exit from the European Union.
ACTION: Speak with your suppliers and logistics providers to find out their view on the situation and how they plan to minimise any issues.
You can also download our Brexit Checklist, “10 things to consider pre Brexit” PDF for a quick guide on things to think about.
Taxes & Duty
Taxes and duty charges could potentially, if no deal is reached, be applicable to all imports from the EU following our split from them. This could cause issues with releasing goods as cash flow may not permit immediate payments of duty. Setting up a duty deferment account may be the best option to ensure all is done to keep deliveries moving through customs without delays.
ACTION: Take a look at potentials costs of your deliveries if they were all subject to taxes and duty charges. If this value is not achievable right away look at setting up a duty deferment account. It will allow your goods to get through customs and give you more time to pay the charges.
Material price increases
It seems highly likely that post Brexit the price of material will rise. The way we do business with Europe will change whether it be as dramatically as expected or not, there will be different ways of working. The relationship as it stands means free access to the countries in the EU and trading between different countries is easy. As of March this could change, charges for importing goods are likely to increase as is the cost of importing and exporting. Logistics companies may have to pay more to enter and exit the UK.
ACTION: Speak with your suppliers ahead of time, they will have been researching and making plans for the period ahead. Ask if they can advise of an estimated price increase if applicable. That way you know what you could be dealing with and can look at alternative supply if need be.
You can also download our Brexit Checklist, “10 things to consider pre Brexit” PDF for a quick guide on things to think about.
Shortage of material
The months following Brexit are a bit up in the air as far as what will happen. Certain suppliers are already making plans for the weeks following March 29th. Some mills are suspending UK deliveries for a period after the UK leaves the EU. The thinking is that a period of a lower activity rate will allow people to implement any new systems required, become used to any new ways of working and that those few weeks of grace will allow the ports and other authorities to get up to speed with a new way of working. This will ensure deliveries are processed correctly with the right documents and commodity codes.
ACTION: Get as much stock over to the UK as possible in the build-up to Brexit, this will ensure your material is at hand and will reduce the chance of material shortages.
Loss of business
In the worst scenario the changes could cause a loss of business, depending on the impacts of any changes made. If the price of material increases dramatically, the logistics of delivery is unworkable or business between the UK and Europe becomes too expensive it may force people to seek out other supply routes. This is, however the very worst case.
ACTION: Look for sources closer to home if possible, or from countries outside the EU that the UK has current agreements with. If supply from the EU becomes too difficult you will have other options to ensure supply.
Although it is best to be as informed as possible, many of the questions raised are still hanging in the air. No one can say 100% what will happen until either it happens or the government set out a final plan.
What can you do ?
You can be as informed as possible, speak to suppliers and see what they have planned. Read up on the possible outcomes and what they may impact. The government website has information on how to prepare as much as you can. https://www.gov.uk/business-uk-leaving-eu.
BREXIT CHECKLIST DOWNLOAD: to help you plan for your paper and cartonboard requirements please download our “10 things to consider pre Brexit” and request a free ‘Brexit Planning’ call.