Businesses ‘not ready’ for Brexit

• Two thirds of businesses have had their Brexit preparations disrupted by COVID-19.
• Less than a quarter (23%) have high confidence in their ability to cope with the extra administrative burden of Brexit.
• Two thirds (67%) of large firms are very or extremely concerned about longer delays in their supply chain impacting the business post-Brexit.
• Fewer than one in five (18%) of UK businesses are prepared for a ‘no deal’ Brexit.
• Almost three quarters (72%) are concerned about the customs brokerage market’s capacity post-Brexit.
• Two fifths (40%) are concerned about customs declarations impacting their business post-Brexit.

With just a few months until the the end of the Brexit transition period, the lack of certainty surrounding the deal still under discussion between the EU and UK is undermining business certainty. Just over half (52%) think a UK-EU trade deal is unlikely to be achieved in 2020 and only one in ten (10%) supply chain managers claim to have total certainty regarding the impact of Brexit on their business. Furthermore, despite the consensus regarding the likelihood of a ‘no deal’ Brexit, fewer than one in five (18%) are prepared for a ‘no deal’ exit from the EU.

Delays to the supply chain (45%) are the biggest concern regarding the impact of Brexit on cross border trade. However, the larger the organisation, the greater the concern regarding supply chain delays: 56% of supply chain managers in firms with over 1,000 employees are worried about delays to the supply chain. The impact of such delays also raises serious concerns: two thirds (67%) of larger firms are very or extremely concerned about longer delays in their supply chain. Over two thirds (68%) of supply chain managers within healthcare are also concerned about supply chain delays. Tariff payments (40%) and customs declarations (40%) are the next highest concerns. 

Descartes head of marketing Andrew Tavener says: “These findings underline a key fact: those organisations and supply chain managers with existing experience of customs declarations are far more worried about the implications of Brexit on the business than those who have yet to discover the complexity of customs processes. Significantly, with consumer behaviour having fundamentally changed during COVID-19, this inexperience is likely to catch out many smaller sole traders who have moved to an eCommerce model and rely on trade with the EU during the pandemic.”