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A window to the West no more
It has been three months since the UK left the EU, yet the worrying reality is that thousands of firms are still struggling to adapt to the new requirements for importing and exporting.
And while it’s encouraging to see that the government has decided to delay checks on imports from the EU, it’s also further evidence that the impact of Brexit continues to rage on.
There are examples of this disruption on a daily basis. Companies are experiencing long delays at ports while many are seeing perishable goods go to waste. The financial fallout is huge; some businesses face the very real threat of going under. The extra workload and the extra stress caused by the additional requirements is almost certainly harming people’s wellbeing.
Part of the problem here is that those responsible for managing these requirements have largely been left unsupported, on the assumption that eventually ‘they will adjust’ to the extra processes. This couldn’t be further from the truth.
Understanding and actioning customs information alone demands hundreds – if not thousands – of employee-hours which could otherwise be spent on improving customer service, reducing costs or identifying new areas for growth.
In total, it is estimated businesses will need to process an extra 200 million customs declarations every year, compared with roughly 55 million before Brexit. To put this into context, a seafood exporter now has to fill in 71 pages of documents for just one lorry of fish. These outdated and cumbersome processes are plainly causing significant delays and disruption in our supply chains.
Perhaps most worrying is the fact that this isn’t even the full ‘Brexit effect’. Further customs requirements will come into force later in the year, requiring any business importing animal products, live animals or plants to wade through even more documentation.
For stressed and overburdened workers throughout the supply chain, this could be the final straw. They are already faced with rising monotonous tasks on a daily basis, and we have heard of business owners who are on the verge of a breakdown due to the sheer volume of paperwork required.
Without some sort of further, extensive trade agreement, this problem of excessive bureaucracy isn’t going to go away. And while the most sensible approach would be to work towards the introduction of a global standard for all documents, the reality is that, in the current highly fragmented market, no single party holds the power or permission to dictate a new, singular digital standard.
In the interim, many firms will attempt to hire more people to deal with the increase in processes and procedures – easier said than done when the supply chain industry is facing a serious skills shortage. Last year, the government announced its intention to recruit 50,000 customs agents to help process the extra forms. To date, just 10,000 have been recruited.
We’re certainly seeing more of our customers looking to recruit people to take on some of the heavy lifting. One of the freight forwarders we work with has been forced to hire 40% more staff since the start of the year. Even if other firms follow suit, it’s uncertain whether this will be enough to handle the extra restrictions when they come into force.
It is time for a different approach.
We must look to help businesses address the burden of managing customs transactions in a more sustainable, less resource-intensive way. Better technology is needed to handle the processing of paperwork which, quite frankly, remains stuck in the dark ages. The bill of lading, for example, dates as far back as the late 1300s, and yet is still widely used in transporting goods worldwide today. This is in addition to the invoices, air waybills, certificates of origin, packing lists, arrival notices, customs declarations and export health certificates required for processing cross-border transactions.
Businesses can’t be expected to just get on with it alone. It’s time we acknowledged the archaic processes that still exist in the supply chain and seek out new and creative ways to overcome them. Yes, the new customs processes are vital, but they can be made far easier and stress-free – for example, using technology to automate monotonous tasks and, crucially, give organisations powerful intelligence which they can use to improve operations and drive growth.
With the Brexit burden set to increase, and no sign of an extended trade deal on the horizon, this has to be the moment to embrace technology and alleviate the operational burden that sits heavy on the shoulders of our supply chain workers – giving them precious time back to actually enjoy their jobs and, quite frankly, put their skills to better use.
This is guest post by James Coombes, chief executive of vector.ai
Mr Coombes is an entrepreneur and trade and commodities finance professional who founded vector.ai in response to the operational challenges in the supply chain, and is helping firms process the mountain of Brexit paperwork.