Brexit: further complications and COVID-19
Since we originally posted our previous Brexit statements earlier this year and in 2019, the issue has been eclipsed by the Global Pandemic that’s had a dramatic impact on all aspects of our lives. But ever looming in the background has been the spectre of Brexit and the anticipated effect that that may have on business.
Rest assured that here at PTG we’ve continued to monitor the situation and take every possible precaution to ensure continuity of supply and consistency of pricing and support for our customers, you are our lifeblood.
As I write this update, at the end of November 2020, the UK still has no trade deal with Europe in place, which limits the amount of information available to us to work with. We can however draw some conclusions from what we do already know and formulate plans based on that.
Firstly, most of the major vendors are hinting at price changes. Without a deal they’re not able to advise specifics of what that looks like, but we should be prepared for some movement in the new year. We do know that the majority of IT equipment will continue to be tariff-exempt under WTO rules, so we can expect that price changes may be based on exchange rate fluctuation and the increased costs associated with managing the supply chain after Jan 1st.
As far as stock availability is concerned, the supply of components used in manufacturing IT products has already been severely impacted by COVID-19 and we’re still seeing delays on key lines stretching into the first half of 2021. PTG maintains a robust supply chain utilising all mainline Tier 1 distributors in the UK, along with several direct relationships. They have increased stockholding wherever possible, but the vendor shortages will still make that difficult to maintain across all product lines. That said, our relationships will ensure we get stock allocation on those lines as soon as it becomes available.
Brexit specifically is not expected to add too much delay in terms of vendor lead-times. Vendors have had time to plan accordingly and have developed sophisticated supply chains and routes to minimise impact. Border processes have been improved and, in most cases, we anticipate that this may add only 3-5 days to CTO factory orders. There is the option to air-freight larger consignments if necessary, albeit a costly option.
All of this must be taken in the wider context of vendor component shortages however, which are unprecedented. As such planning is critical to ensure stock availability for IT projects and general project requirements. Organisations UK-wide need to be consider their requirements for Jan/Feb/Mar 2021 now, and we would encourage you to talk to your Account Manager about your requirements.
As always, we’re here to help. If you have any questions, please get in touch and contact me on 0113 387 1070.
Update written by Terrence Kerrigan, Group Procurement Manager, PTG.