With an industry focused on imports and exports, Brexit was always going to change the landscape, but how is it developing in real terms?
Marine Industry News explored the issues plaguing today’s market, from the maturation of electric boating to regional booms and obstacles from different geographic marine markets, and the ramifications of Brexit.
When December 24, 2020 finally arrived, the EU-UK Trade and Cooperation Agreement drew a mixed response from the marine industry. While it was widely recognized that any deal was better than none, it was drawn up just a week before Britain’s formal withdrawal from the EU and was seen by many as a last-minute solution. He made an explicit reference to the preservation of ‘free trade’ and yet marked the end of the UK’s membership of the single market and the EU Customs Union. That means it also marked the end of the free movement of boats, marine accessories, raw materials and specialist parts between the UK and Europe.
Given that the European Union was (and still is) the UK’s most important trading partner, the response from some business leaders was critical, and ten months later, it appears that some of the widely anticipated supply chain problems continue to cause problems. for the marine industry.
Delays and interruptions
Whether you want to import products into the UK from European suppliers or export UK products to European buyers, there are now several controls that add time, cost and complication to the process.
More specifically, even if a UK business owner uses a professional freight forwarder and has their VAT and EORI documents fully prepared, that counts for little if the European importer or exporter does not properly attend to their own documentation. While that is unlikely to be new for those used to dealing with imports and exports from outside the EU, it seems that even seasoned traders are now facing uncertainty.
In fact, according to Paul Martin, former owner of BHG Marine and now associate director of First Peninsula Marine, it’s the uncontrollable delays, rather than the inflated costs, that really take a toll.
“If you’re ordering something for the summer, you don’t want an eight-week delay. You want it in three or four days; otherwise you’ll just go and get it locally. But while we used to ship a 30kg box to Germany or the Netherlands in two days for £ 15, now you’re talking about a minimum of £ 70 to £ 80, as well as a ream of paper to fill, and it’s a lottery to know if it arrives. there, ”says Martin.
Ian Stevenson, Northern European representative of Italian marine accessories giant Osculati, fully agrees: “At Osculati, we have 22,000 items, all in stock. But we are losing customers in the UK to the left, right and center. And that’s not so much about the price increase. It is about the complication and fear among small businesses in relation to importing products from Europe. ‘
In the short term at least, it would appear that a number of European companies are equally reluctant, simply stopping supplying to UK small businesses because they believe the pain outweighs the reward. And with easy access to simpler, more reliable and more lucrative destinations for their products, who can blame them?
Navigating the bureaucracy
In light of widespread shipping delays, not just from the EU but from around the world, some companies have given in to pressure to increase their stocks at the beginning of the shipping season and this has had a significant impact in terms of funding. . storage and safe.
Others have taken a different approach, appointing intermediaries (with varying degrees of success) to fix paperwork problems on both sides of the border. Still others have gone even further, bypassing the potential problem caused by a single non-compliant item in a large mixed load, organizing their own small shipments and appointing the freight forwarder to handle the entire process. Of course, that certainly adds an additional expense, but it also helps eradicate doubt in terms of compliance and deadlines.
Investment and reward
However, perhaps the most proactive approach has been to actively invest in the new business landscape by creating branches abroad. This has enabled a number of UK companies to recharge in bulk from their national factories and to quickly distribute products across the continent when required.
Given that this trend has been accompanied by increased European investment in the UK maritime business, it is perfectly possible (even slightly perverse) that the UK’s withdrawal from the EU actually fosters more intimate cross-border trade relationships than ever before.
“I know of two or three companies that have set up shell companies or small warehouses in Ireland or the Netherlands, enough to have an address and business registration abroad,” says Martin. “Then they can use that small warehouse to ship goods within the EU quickly, while replenishing them from their UK warehouses once a month.”
“Similarly, certain European companies that are having trouble getting stuff into the UK will look to do something similar, maybe invest in a UK company that can still generate income and a return on investment, but could also offer something else besides their core businesses.
A brighter future?
Even after the post-covid spike in the UK subsides, supply returns to normal and consumers are no longer expected to compete for minimum stocks, it seems certain that we will continue to pay more for our marine products. Until commercial operators on both sides of the Canal become better acquainted with the new import and export systems, the UK consumer is likely to see a reduced variety of seafood on the shelves as well.
And yet Shaun Parsons, director of PSP Worldwide Logistics, sees the UK’s current difficulties as little more than a period of readjustment: “We have been through a lot of struggles before with legislation both here and in other countries over the last 40 years. But we are all still trading and these little deals that the government is trying to make with Australia, Canada and the Baltic states will also make things better for the future. I certainly see that it will be a very different place ten years from now.
Paul Martin is equally optimistic when he looks to the future of naval companies: “I appreciate that the pain is very real at the moment, particularly for UK small businesses, and that doesn’t help with the fact that there is a bit of animosity. ‘Post-divorce’ is souring the collaborative efforts of some of our European neighbors. But this is a short-term failure. It will take 12 to 18 months to become more agile and efficient, but assuming there are no more curve balls, I have no doubt that our supply chain problems will solve themselves. ”
Source: Marine Industry News