The latest Office for National Statistics (ONS) economy figures show businesses are reporting spiralling Brexit challenges. Doubt has also been cast on the viability of the Northern Ireland protocol, says the international delivery expert ParcelHero. Transport costs, border disruption and customs duties problems soared in the two-week period between 24 January and 7 February.
ParcelHero’s head of consumer research, David Jinks, says the new figures highlight the full impact of Brexit on businesses.
Says Jinks: “The ONS report, UK exporters and importers increasingly likely to face challenges, shows a sharp escalation in Brexit problems. They increased markedly in the two weeks from 25 January to 7 February compared to the preceding fortnight, 11-24 January:
- 35% of businesses experienced importing challenges because of disruption at the UK borders. That’s up dramatically from the 25% of importers reporting challenges in the previous two weeks.
- Similarly, 25% of exporters recorded disruption at borders, compared to just 19% reporting disruption in the preceding fortnight.
- 34% of businesses experienced exporting challenges because of a rise in transportation costs. That’s up significantly from the 25% experiencing transport cost issues in the previous two-week period.
- 30% experienced importing challenges because of a change in transport costs. Again, this is up significantly from the previous two weeks’ figure of 28%.
- 26% of businesses experienced exporting challenges because of customs duties or levies, a big jump from the 16% of exporters reporting issues in the previous two-week period.
- Likewise, 26% experienced importing challenges because of customs fees in the fortnight between 25 January – 7 February, compared to 16% in the preceding two weeks.
“Perhaps even more concerning, in terms of both trade and politics, are the escalating problems experienced by those shipping goods to Northern Ireland. The Northern Ireland Protocol is in danger of unraveling entirely if these trends continue.
“A massive 44% of retailers and wholesalers reported the volume of goods they shipped to Northern Ireland decreased in the latest two-week period, compared to the previous fortnight. 31.5% of manufacturers reported their export volumes to Northern Ireland fell during the latest period. Of all businesses who had sent, or intended to send, goods from Great Britain to Northern Ireland in the last two weeks, 38% reported sending fewer goods.
‘These problems will only escalate as a waiver on customs declarations on parcels sent from the rest of the United Kingdom to Northern Ireland runs out on 31 March, and certification requirements ramp-up on supermarket goods in April. The Government urgently needs to renegotiate these deadlines with the EU.
“It’s not as if these issues were unpredictable. As long ago as 2016, our pre-referendum report, “Delivering Brexit: The true cost of leaving the EU”, predicted SMEs would face Brexit costs of around £163k in the first year and a typical rise of 30% on the price of items purchased in the EU that had components originating outside Europe.To find out what other surprises Brexit could still have in store, read our 2016 report, which is still available at https://www.parcelhero.com/blog/news-updates/revealed-the-true-cost-of-brexit.”