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BIAFD warns on Brexit disruption risks   (30 October, 2018)

The Autumn meeting of the British & Irish Association of Fastener Distributors focused its discussions on the implications of the UK leaving the EU, and the apparently increasing risk of a ‘No Deal’.

The meeting, held the historic Hallmark Welcombe Hotel, Stratford upon Avon, was very well attended despite coinciding with the Torque-Expo, close enough in Coventry for attendees to drop in on the way to BIAFD.

At the BIAFD Spring meeting, KPMG’s Matthew Fleming followed up on a previous presentation to the association and continued to explore how members might prepare for leaving the EU.

With Brexit looming, BIAFD this time drew on the expertise of members, who have established their own Brexit risk management teams, to catalyse discussion. Putting aside longer-term benefits or disadvantages of leaving the EU, this meeting concentrated on the very real potential for short-term supply chain disruption.

Topics considered included UK and EU preparedness for customs inspections and documentation processing, and the risk of border delays, both across the English Channel and with Ireland. Recent disruption at the container port of Felixstowe, which rapidly knocked on to other UK ports, resulted in significant delays in receiving containers. These events, together with the critical state of the UK’s road haulage sector, blighted by driver shortages and ratcheting costs, demonstrate that the inbound flow of fasteners is already on a knife edge.

Other considerations included the increased importance of rules of origin, import VAT and the potential for renewed sharp currency fluctuations. With member companies in both Ireland and Northern Ireland, and many supplying these markets, concerns over the form an Irish border might take were understandably acute.

BIAFD Director, Phil Matten, commented: “UK wholesalers are unquestionably increasing inventory levels in preparation for next March. However, physical space and financial constraints mean this cannot, by any means, be considered a panacea, particularly in the event of a no deal. Fastener suppliers at all levels, and their customers, cannot afford to be complacent. Whether directly importing fasteners or relying on UK wholesalers, distributors need to give serious consideration to how they provide against short term disruption – and, with fastener lead times from Asia now in excess of six months, time for that is running short.”

He went on to note: “It was particularly concerning to hear that members have received questionnaires from end customers requiring them to sign assurances there will be no disruption next March. Many members have declined on the completely understandable basis that they cannot make such commitments in a situation over which they simply do not have reasonable control. Brexit is not a challenge that can be resolved through a tick box exercise, or by trying to shift liability up the supply chain. There are very real risks of disruption that can only be mitigated by an open and cooperative approach throughout the fastener supply chain.”

BIAFD’s primary goal is to ensure its members are better informed. Membership starts at just £400 per annum. For more information visit www.biafd.org or email info@biafd.org.uk

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