What Happens With Global Sourcing After Brexit?

Love it or hate it, Brexit continues to impact businesses in all sectors up and down the country. But how will the UK’s departure from the EU affect your business’s relationship with international suppliers? At this moment, no one can be exactly sure. The truth is that the consequences of Brexit will have a ripple effect long after any agreement is reached. The key is for businesses to be adaptable; to hope for the best but plan for the worst.

At Darian we can help you embrace the challenges ahead so you can work in harmony with your international suppliers despite the uncertainty. To start you off, we’ve put together four ideas for things to consider:

1.Longer lead times

Any additional customs checks could well mean a bottleneck, so your outsourced products could take longer to arrive than you’d hoped. We can help you work with your global supplier to plan ahead and avoid under or over stocking, as well as deal with any issues as they arise.

2. Calculating customs and VAT

No matter which country your supplier is based in, after Brexit it’s likely there will be customs border tax to pay. In the event of a no-deal Brexit, even products passing through the European Union en-route to the UK may also incur customs charges, so don’t assume non-EU suppliers are exempt. These costs are over and above the usual administration costs and declaration charges, as well as new export and import VAT charges if a no-deal scenario becomes a reality. All this means it’s well worth reviewing your supply chain now and anticipating the effects of these costs in good time.

3. Reviewing contracts

As costs and prices are highly likely to fluctuate, existing contracts with suppliers may no longer be tenable. Review your contracts now to see if there’s any flexibility. Is there adequate protection from supply chain risks post-Brexit? If not, now is the time to consider whether the relationship with your international partners needs renegotiating, or whether you need a new supplier altogether.

4. Increased tariffs

Brexit will mean higher tariff costs which will impact on the financial relationship with your supplier. You need to prepare for the fact that suppliers could be unwilling or unable to absorb these higher costs, and how you progress is largely down to your negotiation skills and how much you value the relationship. However, at Darian we have years of experience in this area and can help both sides achieve an acceptable outcome so that you and your supplier can continue to co-exist post-Brexit and move on together.

So, will Brexit damage your relationship with international suppliers?

Only time will tell, but it’s essentially down to your industry type, your products and the strength of your business relationships. And of course, a little bit of luck.

How Darian can help

Since Darian was established in 1986, we have helped many world renowned companies boost their market share and sharpen their competitive edge.

Darian’s expertise lies in ensuring the highest quality products at the most efficient production cost possible, delivering great value to our clients in the engineering and manufacturing sectors. To speak to us about any aspect of global sourcing, call us on +44 (0)1858 433096 or use our contact page and our expert team will be pleased to assist you.