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Supply chain issues could mean a bleak winter for UK consumers
There is growing concern among hauliers, freight forwarders and their customers that even with a last-minute Brexit deal the UK’s ‘just in time’ supply chain could face unprecedented disruption from January.
According to the Office for National Statistics (ONS), the UK imported £374 billion of goods from the EU last year, or more than half of total imports, making the bloc our biggest trading partner and generating a £97 billion deficit in traded goods.
However, construction firms are now warning about a lack of supplies of everything from screws to timber and power tools as delays at UK ports hold up deliveries from the continent.
John Newcomb, head of the Builders Merchants Federation, said some products were taking up to four weeks to unload instead of one week. Meanwhile, soaring shipping costs are leading to price rises for many goods.
Shortages are likely to spread to more sectors from 1 January. Leaked Government documents describe the potential for ‘border delays, tariffs and new regulatory barriers/costs (which) may result in disruption to the supply of critical chemicals used in the UK, leading to the disruption of essential services such as food, energy, water and medicine’.
Government rules for EU firms operating in the UK from 1 January are still subject to negotiations but each movement of goods from the EU to the UK is ‘both an export movement for EU authorities and an import movement for UK authorities’, meaning more red tape.
According to the Government’s ‘reasonable worst-case scenario’, the flow of medicines and medical products into the UK could fall between 20% and 40% with ‘potential detrimental impacts’ for human health, food safety, animal welfare and disease control.
Meanwhile, with nearly a third of Britain’s food coming from the EU, supply is likely to see ‘reduced availability, especially of certain fresh products’, while ‘supply of some critical dependencies for the food supply chain could be reduced’. The UK’s Food & Drink Federation recently echoed those fears.
Aside from port congestion, concerns are now growing that EU suppliers may divert their exports to other countries, creating a lack of supply, and EU hauliers could cease to carry out ‘cabotage’ (delivering UK goods from one UK site to another and exporting UK goods to Europe as part of their return journey).
Without a steady supply of goods coming into the country, and without foreign trucks moving essential goods on UK roads, the supply chain from distributors to warehouses to retailers could come under immense strain, leading to shortages, spiraling costs, lower margins, and most likely higher prices to consumers in the long run.