UK supply chain price rise double whammy

COVID-19 and Brexit uncertainty are pushing up supply chain costs, with those costs being pushed onto the consumer

Image by Elionas2 from Pixabay

COVID-19 and Brexit are causing headaches for UK supply chains, with costs already rising even before the UK is due to leave on 31st December 2020. Among 557 UK supply chain managers surveyed by CIPS, 16% expect stock to run low this winter due to COVID-19, on top of which will be added delays caused by bottlenecks in supply chains resulting from Brexit.

For those with EU suppliers, 45% expect goods to be delayed by a week or more at the border if there is no deal and 19% expect border delays even if there is a deal.  Previously acquired stockpiles had been used up by 20% of suppliers as a result of Covid-19.

Half of the survey’s respondents admitted to being less prepared for Brexit compared to last year as a result of the COVID-19 pandemic.  A third said they had lost at least one supplier due to COVID and 30% of businesses with an international supply chain said they had moved at least one supplier back to the UK. Seventeen percent said they did not have the resources to prepare for Brexit because of pandemic pressure. Forty-four percent plan to hold extra stock to cope with the transition on 31 December.

Fifty percent of supply chain managers with EU suppliers see further lockdown restrictions as a bigger threat to supply chains than a no-deal Brexit.

The British Poultry Council warned that there would be a shortage of Christmas turkeys and higher prices unless the British government granted quarantine restriction exemptions to seasonal foreign workers. The supply of other Christmas goods could also be disrupted because of the supply chain remapping instigated by the pandemic.

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