Can you describe actual stories of how you have been affected as a business by Brexit?
I was about to sit down with my family on Christmas Eve when I received a call from a colleague asking me if I had popped the Champagne cork to celebrate a trade deal. Far from it I said, as I did not see that the trade deal was going to help us from 1st January, especially this close to the deadline and knowing a lot of clients and suppliers’ key personnel were on holiday for the festive period. I put the phone down with a degree of uncertainty trying to picture day 1 back in the office outside of the single market. On reflection to seeing our Prime Minister pat himself on the back in front of the nation, I did not know what to expect but I had a sense of confidence knowing that whatever the industry had thrown at us in previous years, ILG had always come through it relatively unscathed. Coming back to work in January I had an element of excitement going into an unknown situation but that soon vanished with what I can only describe as the worst time in logistics I have known in my 10 years. The Brexit fallout has given me and countless colleagues sleepless nights and an untold amount of stress. The topic engulfed my day from 7am through to 11pm on some nights as uncertainty, confusion and a general lack of understanding from both our suppliers and clients meant nothing else was possible for at least a month into the new year.
What opportunities have you spotted for your business in the coming months and years following Brexit?
ILG were preparing for Brexit well in advance and set our intentions out very early on with commitment to a European warehouse in 2021. The Brexit deal only confirmed what a good decision this was. One of key USP’s is our purchasing power and our courier services are extremely cost effective for any return on investment and we soon had enquiries from European companies who were struggling to access their UK market without additional fees and delays. We are in the process of launching a cross dock product for businesses in Europe to take advantage of providing any product that is sent to ILG to forward is pre sold.
Have you encountered any personnel issues with EU staff leaving?
No, quite the opposite infact. This has allowed us to send employed staff to our European Warehouse either for relocation closer to home or on a secondment basis. Having ILG people in our European facility from day 1 is going to be crucial to the success of our newest venture.
In truth, is it COVID-19 or the end of Brexit transition that has kept you awake at night?
COVID-19 was something that gave us sleepless nights at the start of the first lockdown but ILG’s growth in 2020 can be attributed to largely because of COVID-19. This gave us sleepless nights for the right reasons as we started to smash records month on month and allowed us the time prior to our peak season to plan based on the peak volumes we were seeing at the time. Brexit has given us different challenges but it has seemed like a much longer road to success with it and at the time of writing, we are still having to make changes to systems in order to keep up with developments. COVID-19 opened our eyes to volumes we could only dream of but Brexit has delivered different challenges that we have had to overcome in record time.
Have you encountered any issue with sending goods to Northern Ireland or have you held back to see how it all unfolds?
Our clients have largely held back but we are now preparing for the fallout as we approach 1st April. By not selling these products it pushes us to look at different solutions for a range of clients but from the outside looking in, the advice seems fairly lacking and the subject seems to have been untouched for some time. It would not surprise me if the extension is granted that allows further preparation time but this has been an area we have largely left alone
Will you expand your UK sales activity post-Brexit?
Yes, ILG are a solutions provider and we will continue to increase sales within the UK at every opportunity.
How prepared were you for the end of the transition?
ILG were as prepared as we could be but a large part of our business is dependant on our suppliers and their capabilities. There were a lot of changes made to IT & API routes that were finalised very close to the deadline and there was never going to be enough time or resource for these to be tested to the degree we would have liked to. Anything ILG could plan for was done well in advance, we kept our clients up to date with any changes and enhancements but as the product was not ours to sell, we were limited and relied heavily on our clients to be ready as well as ILG.
Have you found enough British government advice or support for the ending of the transition period?
The advice is there but it is the sort of advice you need to read once, twice maybe five times to make sense of it all and decipher what is relevant to your business and clients and what is not. A large number of clients had a lot of trouble looking for the right information and leant on ILG for our advice and recommendations.
Are you operating in a sector that actually had much business with the EU?
A lot of our Ecommerce clients have very unique and niche products meaning their target market has expanded over the years. The challenge they now face in shipping to their EU market has changed overnight, some have continued along the same path and have taken the option to absorb DDP charges to keep serving their clients but others have stopped shipping altogether. Our European shipping profile has changed dramatically from one month to the next, nearly all shipments are being sent on cheaper slower services due to additional charges for our suppliers and it is a very different outlook for a lot of our clients now than it was when we were in the single market.
Have you found the paperwork now associated with export to or import from the EU impossible to complete or actually not a problem?
ILG do not tend to get involved with the paperwork side of things as this is covered within the courier services we purchase but we have seen delays due to incomplete data, missing or inaccurate information and have had to deal with many more parcel exceptions in one month than were dealt with in Q4 2020. Each supplier we work with has a different way of working but we are seeing that basic information such as contact name, email address and phone number are huge contributors to these exceptions.
In the end, will your business be more or less with EU customers in a year’s time?
I truly believe this will be more, we are due to open our first European facility in Poland and this will only drive business from existing clients and new prospects. We have other benefits to use that will increase business for our clients who ship to the EU and this will only continue to drive growth for ILG and our clients.
If you are continuing to do business to or from the EU, which mode would you use – air, rail, road, short sea, or a combination of these?
It largely depends on a few factors. For ILG to make suggestions for our clients we look at their target market, the product and its value, what levels of cost absorption (DDP Fees etc) does the client want to handle and then make a decision based on this. For now the most cost efficient route to the EU is via road shipping, there are lower carrier surcharges to take into account and not all export charges and additional costs are the same with each carrier. This has changed behaviour in our clients and the routes they take to the EU and I have no doubt that if this route continues to work for them then they would not hesitate to remain how they are. We are having to manage expectations across the board as to how dramatically the service levels and speed of delivery has changed from one service to the other. Clients of ours still have an expectation that sending express air will achieve next day delivery from the UK to most EU destinations but the reality is hugely different, especially with the additional information at receiver and product level that are now required. If the main integrators who service Air Express want to retain or gain business back then sooner or later they are going to have to look at what they feel is acceptable to charge on top of the courier costs. DHL Express for example have chosen to charge an additional £0.25 per KG with a minimum charge of £4.50. Considering most Ecommerce business falls into the lower weight scale at around 2KG-3KG, you are adding a considerable amount more to a service that at the time of writing is no better than sending via a road service. I sincerely hope they realise how much this has put a lot of exporters off shipping to the EU but it does seem that this will come back to haunt them the longer they intend to charge these fees.