CIPS survey revealed that one in five EU companies will demand a discount from suppliers if goods are delayed at the border for more than 24 hours. © AFP/Getty Images
CIPS survey revealed that one in five EU companies will demand a discount from suppliers if goods are delayed at the border for more than 24 hours. © AFP/Getty Images

Border delays could cost companies dearly, warns CIPS

11 March 2019

British exporters face being penalised by their European customers if there are delays in getting goods out of the country after Brexit, according to a CIPS survey of supply chain managers released today.

A delay of just one day at Britain’s ports and airports could see prove costly for British exporters in late delivery discounts and lost contracts,

Some 1,749 supply chain managers from the UK and EU took part in the poll, conducted last month.

It revealed that one in five EU companies will demand a discount from suppliers if goods are  delayed at the border for more than 24 hours, and one in ten British exporters fear they would lose business in the event of delays.

A quarter of European businesses would withhold payment until after goods arrive, which could cause cash flow challenges.

And in the case of a delay of between two and three weeks, 60% of EU businesses would place their business with other suppliers.

Uncertainty has already caused 38% of the UK’s European business partners to switch suppliers as a result of Brexit, up from 18% in October 2018, according to CIPS.

In a no-deal scenario thousands of British exporters would face being turned away at the border between the UK and EU.

This is because just 40% of UK supply chain managers believe they would be able to comply with the key EU customs requirements that would be required.

John Glen, CIPS economist, said: “Britain’s supply chains are so finely balanced, that even a temporary delay at the border after March 29th will see UK businesses paid later and paid less for their goods.”

He believes these costs and a lack of investment will probably reduce the number of exports coming out of the UK and lower the UK’s competitiveness on the international stage.

“If the UK does stumble out of the EU without a deal next month, the majority of British businesses would not even be able to file the right paperwork to get goods across the border.”

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