Government and businesses start to put in place measures to address customs issues.
Automotive components firm Dana has calculated a hard Brexit would cost the company $2m.
Each year the company, which specialises in axles and drivetrains, brings goods worth $50m into the UK to be used at its three plants.
Craig Price, senior vice president for purchasing and supplier development at Dana, told SM that the company has been planning for Brexit for more than a year and modelled what an unplanned exit would mean. Two risk areas had been identified: financial and border delays. Under WTO rules 4.5% duty would be paid on goods coming into the UK, which it calculated would add $2m to costs.
Dana considers that border delays are most likely in the Dover/Folkstone area and has looked at using different ports. The company has also planned to increase inventories to two weeks’ worth.
“For the suppliers who would be affected by this we have modelled about two weeks worth of inventory that we would put into the system,” said Price. “We work cooperatively with our supply base to put that protection in the system.“From a supply chain perspective, whether it’s Brexit, tariffs or geopolitical things, it’s about having a flexible, agile supply chain that you can move around if necessary… We’ll wait and see what happens and hopefully sense prevails and we go on without serious repercussions.”
Meanwhile, HMRC has announced Transitional Simplified Procedures that would allow lorries to pass through borders without having to make customs declarations in a no-deal Brexit.
Under the plan, firms with an EORI customs tracking number would be able to file a form ahead of a border crossing, at least 2hrs before a ferry crossing and 1hr for Eurotunnel, then pay duty later.
But a test of Operation Brock in January, the government’s contingency plan to cope with lorry congestion at ports in Kent, was derided by the opposition as “beyond parody”.
The test was meant to involve 150 trucks travelling from former airfield Manston Airport, which will be used as a lorry park, to Dover to test the impact on traffic.In the event, just 89 lorries took part.
On a normal day more than 7,000 lorries pass through Dover, and the Road Haulage Association slammed the test as “too little too late”.
Separately, public procurement professionals have been told that in the event of a no-deal Brexit they will need to publish contract information on a new e-notification service instead of Tenders Electronic Daily.
In official guidance, the Cabinet Office said public bodies may no longer have access to the Official Journal of the EU but will still have “a legal obligation to publish public procurement information”.
“The current regulations will be amended to ensure they remain operable and functional on exit,” said the guidance.“The majority of the procurement regulations… in particular the procedures available to contracting authorities and entities, will remain exactly the same.”