UK importers are still reeling from increased Brexit costs and delays

New Government figures released yesterday (6 May) revealed many businesses are still overwhelmed by the impact of Brexit. Over 39% of importers reported they are still struggling with new customs duties and 38.6% were battling with increased transport costs.

The international delivery specialist ParcelHero said the latest Office for National Statistics (ONS) Business Insights’ results, covering the period 5-18 April, show that there are still significant difficulties in importing goods from the EU post-Brexit. It warns that, inevitably, the increased costs will have to be passed on to consumers.

ParcelHero’s Head of Consumer Research, David Jinks M.I.L.T., said: ‘April’s figures on the importing and exporting challenges facing British businesses are pretty dire. The Government can no longer hide its head in the sands of Britain’s coastal borders. There was a huge flaw in the Government’s final trade deal struck just before Christmas, and it’s seemingly insoluble.

‘Under the Brexit so-called “free trade” deal, goods arriving in the UK from the EU that are sourced and manufactured in Europe don’t pay tariffs. But how many products are entirely sourced and made in a single area in today’s world of global supply chains? The answer is very few. Electronics incorporate components from across the globe, while clothing can include materials from many continents. That’s why importers are paying more duties, customers are finding unexpected charges on items ordered from EU traders, and transport costs are rising because of mounting delays and returns.

‘This latest ONS Business Insights assessment, in the section entitled “Exporting and Importing Challenges”, reveals that 41% of importers are still struggling with the nightmare of increased paperwork. Changing tax rules and new proof of origin forms have proved difficult for many companies, both large and small.

‘Additionally, a slew of other Brexit difficulties had not been ironed out by April. Nearly 7% of importers said their suppliers were still not Customs ready, while 4.5% of British importers said their regular suppliers had stopped trading with the UK entirely in April, as the full impact of Brexit bureaucracy hit home.

‘Smaller importers have been hit disproportionately by the cost of Brexit. In April, 25.3% of SME importers experienced disruption at UK borders, as opposed to just 14.4% of large companies, and 38% of smaller companies wrestled with transport costs, as opposed to 30.5% of larger importers.

‘The basic problem is that EU manufacturers and sellers are no longer fighting to get their goods into the British market. The UK is no longer seen as an easy and profitable market. European transport companies hate the new duties, delays and the fact that goods are still being turned away at ports because of incomplete paperwork. Those companies that continue to serve the UK are increasing their prices to compensate.

‘Importers are bearing the brunt of these changes for now but, before long, these increased costs will have to be passed on to the beleaguered British shopper. The challenge of Covid may at last be subsiding but, for Britain’s retailers and manufacturers, the impact of Brexit is not going away.

‘Our fear is that there could be even worse to come. Let’s not forget that some of the most complex new EU border regulations have been postponed, unilaterally, by the UK Government. It remains to be seen what their impact might be on these already worrying import figures once they are imposed.