UK Tech Supply Chain In Dark Over Brexit Preparations Months Ahead Of Final Heave-ho

Canalys Forum 2020 - updated The IT supply chain remains in the dark over how to plan for Brexit with mere months to go before the UK potentially exits the European Union without a trade agreement, according to one of Britain’s biggest IT distributors.

Negotiations between the EU and UK remain deadlocked, and just yesterday UK Prime Minister Boris Johnson’s self imposed deadline to get the thing done came and went. He admitted earlier this week that "intensive talks" were needed to "bridge significant gaps" that exist between the factions.

The UK left the EU on 31 January 2020 and the transition period runs for another 77 days until the end of this year when rules, regulations and contributions from Britain to the EU come to an end.

Joe Hemani, chairman at Reading-based distributor Westcoast, one of the largest wholesalers in Europe, said any business which claims it is ready for Brexit might not be telling the whole truth.

"Until such time as we know what the arrangement with our European partners is, there is no way we can prepare anything. We talk to our logistics supplier, we talk to pan European suppliers, we talk to hauliers, we talk to route masters – and everybody's in the same boat.

"So we all think we should be OK, but we don't know how, we don't know when and we don't know why. So I think anybody that says they're ready for Brexit, I'm not sure how they can see that, because we do not know what the outcome is going to be," he added.

The logistics industry will not have taken comfort in the systems designed to ensure the smooth crossing of trucks from the south coast of England. The new system is based on software that is currently still being tested.

Logistics UK told us in early September:

"We are concerned that mass user testing of the software will not be possible until October – or maybe even November: this is far too late for the thousands of companies and tens of thousands of people who build our complex supply chains to redesign their own processes and contractual relations before the Transition Period ends."

Westcoast built inventories in its warehouse in the autumn of 2019 to prepare for the December 2019 exit date that sailed by. Keeping hold of that stock "cost us money but nothing came of it," said Hemani.

"If you go on the government website, Get Ready for Brexit, there's nothing there, no information which you can actually use which helps build your business planning to work with our European partners," Hemani added.

He agreed the COVID-19 crisis had taken centre stage, moving the spotlight away from Brexit, adding: "I think that suits the current government."

This time around, with shortages of ICs, CPUs and panels affecting the availability of PCs - particularly Chromebooks and cheaper notebooks - filling those warehouses with computers might not be an option. Both HP and Lenovo have warned in recent months of protracted shortages and Dell said it hasn't been playing in the entry level tier.

Steve Brazier, CEO at Canalys, said on the same webcast broadcast at the analyst's annual (virtual) conference, that it is "absolutely ridiculous" that months out from the UK's exit, there is no clarity on what to expect. He predicted a hard Brexit will be "chaos". ®

Updated at 1342 BST on 16 October to add

Johnson has said it is seems unlikely there will be a trade agreement with the EU: "What we're saying to them is come here, come to us, if there's some fundamental change of approach."

Mike Cherry, national chairman at the Federation of Small Businesses, said in response: "Not only have small firms been hit by the most severe recession on record over the past six months, they’re now ten weeks out from the end of the transition period with no clear sense of what our future relationship with the EU will look like.

“And they don’t even know what they’re preparing for – the Government is essentially saying get ready for a no-deal outcome even though a deal could still happen."

Good luck Britain, we're going to need it.