Brexit Committee News Update – September 2020 Update
Welcome to the latest update from XMA’s Brexit team. Due to recent focus on Covid-19, XMA have not updated our Brexit page for some time. However, with the deadline for Brexit transition still due for January 2021, XMA’s Brexit Committee met this week and we can issue the current information / guidance below.
Whilst the UK has exited the European Union at the start of 2020, no real changes in trading conditions has been experienced as a result. This will not be true if the UK and the EU cannot agree a trade deal by the end of 2020. Recent reports have shown the Cabinet Office preparing for widespread disruption should such a scenario coincide with a second wave of Coronavirus in the UK.
XMA’s approach is to prepare for the worst and hope that the situation is considerably better.
Delivery Delays from Europe
Recent studies have shown that some delays at ports of exit/entry are likely. Given that the majority of goods supplied by XMA are currently imported into the EU via mainland Europe and shipped across the English Channel, such disruption is bound to have an impact. Hence XMA and our parent company Westcoast have taken or will take the following mitigating actions:
1. New increased storage – XMA’s new 346k sqft facility in Andover has been fully operational since the start of the year and has allowed increased space for XMA and our Customers; increased services (e.g. configuration, PDI, storage, bundling) and will provide reduced cost outsourcing opportunities for our OEM partners and Customers. The appropriate EORI number and TSP status are in place.
2. Short-term deals – Previous ‘false Brexits’ were covered by stocking deals with OEM partners to mitigate the immediate disruption to normal trade. XMA have already started working with Suppliers to ensure inventory planning over the change period.
3. XMA are working with freight forwarders, vendor logistics managers to ensure the smoothest possible importation through UK ports of entry. This includes correct commodity codes, country of origin information and paperwork.
4. Tariffs – Most (but not all!) IT products supplied by XMA in the last 180 days had no tariffs applicable on WTO terms or the UK Global Tariff (applicable from 1st January 2021).An accurate commodity code which allows tariff application to any goods imported is an important part of XMA’s work at present with Suppliers is encouraging them to provide a complete library of codes for every live sku. XMA are currently looking at automating a tariff look-up procedure to apply an appropriate tariff to the cost of the product if applicable. These can clearly change with little notice.
5. Other costs -VAT deferment costs, import management and transportation costs may also increase cost of goods after 1 January 2021 and will be applied systematically.
6. Finally, XMA and Westcoast are working with vendors to arrange direct delivery into the UK from the Far East (i.e. avoiding the EU altogether). Westcoast can act as a master distributor, importer or merely a 3PL provider to a wide range of suppliers.
Westcoast Exports
XMA and Westcoast now have warehousing in the UK and across Europe (inc Ireland). We are investigating the possibility of having a bonded capability in the UK for Irish goods and those for re-export to Europe. All Supplier contracts are being amended to allow for such transactions. We can manage the nuances of exporting to the EU including tariff application and shipping administration. Customers will be asked for standard information in advance of quoting whether the order is received by EDI, web or via Westcoast sales.
Ireland
The new Brexit arrangements for Ireland and Northern Ireland are well understood and we are working with our logistics provider/freight forwarder to ensure we minimise delays when delivering across the Irish Sea. There are no plans to enhance Westcoast’s current cross-stocking facility in Tallaght, Dublin.
Conclusion
Our recent Brexit Committee has reinvigorated our Brexit plans and the committee will meet every month in the run up to 31st December 2020 and will report back via ‘Brexit News’ every month. We will have updates on the progress of plans outlined above.
All questions or feedback are welcome by email: approvals@xma.co.uk
