It was pointed out to me recently, by someone possibly who sees sport in raising my hackles, that this Brexit thing hasn’t been so bad after all, as there has been no sight of the much-feared queues of lorries on our motorways, in temporary truck parks in Kent, or even at the ports. Maybe, they continued, we can admit now that we were just naysayers and doom merchants, intent on only seeing the downsides of this opportunity for change?
The lack of visibility of our engineering sector to the general public has long been a concern for those of us who worry for the impact that low-profile brings. It’s a thought that strikes me almost every time I visit a site in one of our many technology parks or industrial estates up and down the country and leave impressed and educated by the invention and formation of technology that I get to see.
Whether that’s laser optronics or the substantial metal structure for a tidal turbine, I can’t help thinking of the vast majority of people who drive past these estates every day, sadly unaware of the innovation and creativity that the teams of people within are a part of, and maybe if more of them were, our sector would in turn be given the kind of priority in society that makes it such an economic powerhouse for other countries.
On the impact of Brexit on our manufacturers, out of sight, out of mind is definitely the risk we run as a lack of chaos at the ports does not unfortunately translate into smooth sailing, and despite the absence of visible impact unfortunately it’s all there and logistics is the biggest headache.
Companies report a general lack of capacity in both directions, meaning shortage and delay to raw materials and parts needed to build and manufacture, followed by huge problems to get finished goods out and into the hands of customers in a timeframe close to that originally promised. Business has moved supply chains on to airfreight at exorbitant cost to make up lost time, and despite this, workers have still had to be sent home due to lack of parts to build with.
Shortage of capacity brings the inevitable consequence of the supply and demand curve resulting in up to six times normal costs to move outbound goods. Bear in mind that for many exporters to the European Union, this is new territory for them, and despite their efforts to prepare, technical areas like customs documentation, rules of origin, conformity and product-marking changes only add to that burden.
The very real resulting costs of extra administration can be an up-to-tenfold increase in some cases, concluding you might think that the biggest single concern for these companies would be difficulties brought by the impact on profitability. In fact, the biggest concern cited every day is that their EU customers finally run out of patience with the delays they are experiencing in buying from the UK and look around for alternatives without the barriers we have chosen to initiate.
This situation is serious, and it needs urgent help from the Government that took us into it, delivering on their promise of smooth trading with our single largest trading partner. As others have stated, training of customs agents to smooth the flow of goods at borders is needed now, alongside coordination of the activities of logistics supply and exporters, and well meaning as it may be, the online government advice portals are not fit for purpose for the many, many businesses who themselves are on a steep learning curve for these changes.
These are in truth first-aid measures, actions to stem the blood loss before it’s too late. Alongside that we need the UK Government to see the trade agreement agreed in late December, and the end of transition on January 1, as merely the starting point of an improving and deepening trading relationship with the EU.
Against the optimism cited that much of what industry is experiencing is merely teething problems, I would add I hope they are right, and then remind them that hope is not a good plan. Right now, the reason that manufacturers would tell you that there are no lorry queues at the ports, is because the queue is at the back door of their factory.
Paul Sheerin is chief executive of Scottish Engineering