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Businesses must “accept uncertainty” following prime minister Boris Johnson’s warning that the UK must prepare itself for a no-deal Brexit.
Mr Johnson’s comments came a day after his self-imposed deadline for a deal to be reached had passed – although minister Michael Gove, who is leading Brexit preparations, said the “door was still ajar” for a deal to be reached.
The PM said: “We have only 10 weeks until an end to the transition period, I have to make a judgement of the likely outcome and to get us all ready.”
Stefan Tarneberg, director of solution consulting at BluJay Solutions, claimed that “crashing out” of Europe without a deal would have a “monumental effect” on British trade.
“The entire UK economy will feel the repercussions” he said. “Subjected to the same regulations on tariffs and import quotas as all non-EU countries, UK companies will need to complete 400 million customs declarations a year, compared with five million last year – that’s an increase of 8,000%.”
He added that the UK would be required to spend £4bn on customs paperwork alone if it wanted to continue importing 70% of its goods.
Acknowledging that a trade agreement would not mitigate the complexity of new customs’ processes, he said it would, however, “slash the number of hoops companies would be required to jump through” if they wished to continue trading.
“Without a deal, there’s only one solution for a smoother trade situation, companies must take matters into their own hands and automate management of declarations,” he added.
“[Otherwise] in a no-deal scenario, we will all bear the brunt, and companies will need to pour hours of skilled manual labour into completing each declaration – with mistakes costing time and money, on top of the financial cost.”
However, US supply chain software developer LLamasoft director Matthew Woodcock said companies wouldn’t “have to shoot in the dark” to prepare for Brexit, as technology systems allowed for a range of scenarios to be modelled and tested ahead of deployment, and thus provide a dry run for how to overcome potential disruption, demand or port delays.
Policy director for Logistics UK Elizabeth de Jong told The Loadstar she had been “urging” the association’s members to prepare “as much as possible”.
“A new supply chain in border readiness documents will need to work from day one to avoid disruption,” she said. “We have been working with government on joint metrics to assess preparedness.
“Time is of the essence, so we have written to Mr Gove to urge work be accelerated, so that business can be confident trade will remain as frictionless as possible from January.”
Echoing Mr Tarneberg’s assertion that the only reliable way forward may be to take control, Mr Woodcock said the industry needed to “accept uncertainty as the deal,” and invest in AI tech that can identify and fix potential supply chain weaknesses before they are exposed.
“For the prosperity of businesses and the country alike, the time to prepare is right now.”
Richard Burnett, of the UK Road Haulage Association, which was criticised by Mr Gove for not being “constructive”, told Good Morning Britain today: “It’s irrelevant whether we get deal or no deal; business needs to wake up and make sure they prepare.
“For both haulers and traders, the biggest issue is to make sure you’ve got the appropriate paperwork. We’ve a shortage of custom workers. We need 50,000; we don’t have enough to cope with the amount [of paperwork] we’re going to see from January.”
Mr Burnett added that the government was now “listening” to the needs of hauliers, but said there was “an enormous amount of work to do.”