Brexit customs delays of 30 minutes could bankrupt one in 10 UK firms, survey suggests

Two-fifths of businesses say future trade arrangements still too unclear for them to prepare at all for EU departure

Despite the potential chaos, 10 per cent said they would prefer a no-deal Brexit than Theresa May’s Chequers plan
Despite the potential chaos, 10 per cent said they would prefer a no-deal Brexit than Theresa May’s Chequers plan

One in 10 UK businesses say customs delays of just 10 minutes to half an hour are likely to push them into bankruptcy, according to a survey.

The Chartered Institute of Procurement & Supply (Cips) polled 1,310 UK and EU-based supply chain managers – the professionals responsible for navigating customs and negotiating with suppliers.

Respondents reported that the longer the delay, the more likely their business would fail. One to three hours of additional waiting for goods at the border could put 14 per cent of firms out of business, rising to 15 per cent for a 12- to 24-hour delay, the results suggested.

Business groups and leading industry figures from a number of sectors have warned for months of the potentially disastrous impact of customs delays if the UK does not secure a trade deal with the EU before Brexit on 29 March.

Despite the potential chaos of a no-deal Brexit, 10 per cent of supply managers surveyed said they would prefer that outcome than the Chequers deal currently being proposed by Theresa May.

The prime minister’s blueprint is supposed to allow the greatest possible access to the EU while respecting the referendum result and solving the problem of the Irish border.

But it has faced fierce opposition from within the Ms May’s own party and was humiliatingly rejected by EU leaders at a summit in Salzburg last week.

No customs checks are currently required for goods entering the UK from the EU and any additional admin or paperwork threatens business models that rely on frictionless trade.

Nearly a quarter (23 per cent) of UK businesses said they are planning to stockpile goods to mitigate the effects of delays, while 4 per cent have already started doing so.

A fifth of companies said they have looked to make contracts with suppliers more flexible while 21 per cent have sought alternative suppliers outside the EU.

Half of UK companies bringing in goods from the EU said they would struggle to find the suppliers and skills they need if they were forced to bring production parts of their supply chain here post-Brexit.

Almost two-fifths (38 per cent) said future trade arrangements are still too unclear for them to prepare at all for Brexit.

John Glen, an economist at Cips, said the UK economy could “fall off a cliff” as a result of border delays of just 10 minutes.

“Businesses have become used to operating efficiently with exceptionally lean, frictionless supply chains, where quick customs clearance is a given,” he said.

“Customs delays would not only affect businesses but would also lead to a shortage of products on shelves and an increase in prices for consumers as well.”

Stockpiling is not an option for all firms, he said, because many do not have available storage facilities or simply can’t build up supplies because the items they buy and sell are perishable.

“To prevent an economic meltdown, the government must ensure that goods continue to flow seamlessly across the border post-Brexit,” Mr Glen added.

He said a deal is required quickly because the majority of businesses say they need at least a year to prepare for Brexit.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Please enter a valid email
Please enter a valid email
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Must be at least 6 characters, include an upper and lower case character and a number
Please enter your first name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
Please enter your last name
Special characters aren’t allowed
Please enter a name between 1 and 40 characters
You must be over 18 years old to register
You must be over 18 years old to register
Opt-out-policy
You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe.

By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Join our new commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies

Comments

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in