ThE logistics sector, with its daily responsibility for keeping goods, food and medical supplies crisscrossing the UK, was hit by a double whammy in 2020 and the opening two months of 2021. In March 2020 the country went into its first pandemic lockdown and for many companies in the logistics sector, sales fell off a cliff as retail outlets closed their doors.
Then we had a brief spell during which retail outlets and hospitality businesses were again allowed to open, with strict safety protocols in place, only to have to close for a second, even more protracted lockdown.
The signs are that we’ll see an opening up across the UK sometime next month.
That, allied to the fact that the vaccine rollouts are going well, represents good news for the sector. However, the bad news is that confusion over the layers of red tape that came with Brexit continue to gum up the works for hauliers, exporters, customers and importers.
Matters are not helped by the fact that the sheer volumes of paper documentation involved are causing official customs systems in various countries to either run dead slow or to fail spectacularly.
John McKail, the Managing Director of Bullet Express had over 30 years in the logistics sector before joining the company as managing director, just two weeks before the 2020 March lockdown.
“The global pandemic had a huge impact on the industry and on supply chain logistics,” he says.
During that first lockdown Bullet Express and many other logistics companies found their customers closing their doors with no sense of when those doors were likely to open again.
“None of us had ever experienced anything like it. Fortunately, the Government introduced the furlough scheme.
“In my opinion that scheme has been a huge success for employers. The alternative was to make loyal employees redundant, due to prolonged periods of business downturn.”
Thanks to furlough, he says, Bullet Express was able to manage the fluctuations in its business workload whilst retaining valued staff. “This is no mean feat. We came through the whole of that first lockdown with zero redundancies,” he says.
McKail points out that Bullet Express is more fortunate than many companies in their sector because its business is diversified across multiple revenue streams.
The company’s staple business is the delivery of express palletised goods, storage logistics and worldwide freight forwarding.
It also specialises in bespoke special services logistics for health, retail, grocery, aerospace and industrial sectors.
Employing 110 people, the company operates from two locations in
Glasgow, including a 210,000 square foot logistics warehouse, with huge demand for additional capacity.
“We’re looking to meet the growing demand by opening a new storage centre.
“Although a big commitment for our company, the surge in demand for warehousing means space is now at a real premium in Scotland,” he notes.
Right now, it is difficult for anyone in the sector to tell how real or long lasting this demand for warehousing capacity is.
Part of it has been stoked by Brexit, with a whole raft of different organisations in different sectors piling up stock to try to navigate their way through any stock shortages caused by Brexit holdups.
However, McKail points out that in his experience, much of this stock is now running down. This has been partially caused by the additional delays trucks have experienced as a result of Brexit.
“What many people don’t realise is that before Brexit, UK plc processed an estimated three million plus customs entries a year.
“This year it looks like being well over ten times that number and customs systems here and overseas are not geared for it,” he says.
As an example of the kinds of problems that can arise, he points out that when companies who have imported goods want to then export to the EU, they have to produce a commercial invoice, listing each commodity code.
For every shipment Bullet Express loads to the EU, a commercial invoice and customs entry are required, processes that simply did not exist pre-Brexit.
If a truck of exports arrives at a shipping port with a mixed load of pallets and any customs documents are wrong, the entire truck gets quarantined until any errors are rectified and that’s assuming that the customs systems on each side are working.
“We have one customer with 14,500 different commodity codes on their stock system.
“They discovered that they had no way of getting the commodity codes out of their order process system to be able to prepare a commercial invoice for export. They had no need to do this pre-Brexit and have now suspended exporting while they solve their problem,” he points out.
In part McKail blames the UK Government, feeling more could have been done to get firms ready. Moreover, so much of the Brexit agreement left blank ‘to-be-agreed-later’ passages, resulting in confusion, he argues.
“Since entering the EU many businesses and transport companies have never had to think about customs requirements, with the right supporting expertise and systems, to enable service. Without this, service cannot be fulfilled, resulting in supply chain delays,” he says.
On the plus side, as far as his company is concerned, McKail says that they got focused early on the process of getting prepared for Brexit, introducing Bullet Customs Care.
“I’m not saying we’ve cracked it all, because at the end of the day you are in the hands of HMRC and the regulatory requirements of the other countries. Lead times are longer, the costs of supply has increased, and some of the customs legislation, particularly around foodstuffs, is off the charts.”
He concludes: “What we can hope for is that over time the politicians relax current levels of bureaucracy and get focused on enabling trade, by getting the customs legislations straightened out and making things simpler.
“Right now, this is working in no-one’s interest.”
Brought to you in association with Bullet Express
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