Photographer: Ben Stansall / AFP / Getty Images
Photographer: Ben Stansall / AFP / Getty Images
Grizzly’s Custom Bikes provides services and upgrades to Harley-Davidson motorcycles, importing seats, exhaust systems and other parts from Germany.
This week, the owner of the company in Folkestone, England, received a two-line e-mail with bad news: his German supplier stops all deliveries to the UK indefinitely due to Brexit.
“I was deflated,” said Paul Hayes-Watkins. His business is now struggling to find alternative sources of parts. “If that is the future,” he said, “I might as well close the doors.”
The Grizzly bear experience is a sign of how Britain’s departure from the European Union’s single market on 31 December is already wreaking havoc on companies’ supply chains. Firms of all sizes are trying to avoid getting caught up in delays, probably at the border, when new controls and documents come into force – even if the UK and the EU manage to reach a trade agreement.
Specac Ltd., a laboratory equipment manufacturer in the London suburb of Orpington, imports metal subassemblies from the Czech Republic and exports about 15% of its products to the EU. The company put a embargo to all imports and exports by 15 January to avoid any early disruption of Brexit.
Wrong papers
“There will be people who will put things on the road that will not have wrong documents,” said David Smith, CEO of Specac. His company placed its orders early to beat the winter crisis. “If we weren’t ours embargo, companies like us might find themselves behind the queue. “
The UK gets an early taste of border congestion due to a storage frenzy. Long queues approaching the busy ports of Dover and Calais this month forced Japanese carmaker Honda Motor Co. to temporarily closed its factory in Swindon, England. As a trade agreement between the UK and the EU is not yet guaranteed, the purchase of goods now means that buyers can avoid paying the tariffs that could be levied from 1 January.
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Pooch & Mutt, a British importer of gourmet pet food from Spain and the Czech Republic, said it had seen a 150% increase in the cost of bringing goods to the UK in recent weeks. He struggled to reserve truck slots.
“The whole logistics is just a nightmare,” said Guy Blaskey, the company’s founder, who expects spending on the new Brexit bureaucracy to add 3% to its cost base. “We have warned our customers that we should look at rising prices.”
In a further sign of increasing pressure on supply chains in the UK, Europe’s largest truck owner said this week that it will be stop deliveries to the UK after Brexit if there are border piles.
The challenge is particularly acute for importers of fresh produce, which cannot store on a large scale because the goods will spoil.
Bini Ludlow, whose company makes luxury Indian food in Somerset, bought additional tomatoes and onions from the mainland before the Brexit deadline, making lots and putting them in the freezer.
“There will be delays for everything,” she said. “It will upset us all.”
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