Many industries have been affected by Brexit that heavily rely on importation and exportation and this includes the construction supply chain. Construction hugely relies on shipping raw materials being imported into the UK, as well as workforce from abroad as well.
With extra paperwork and a more complicated customs clearance process, many businesses are looking for solutions to make their supply more efficient and cost-effective. Industries such as construction can embrace different forms of technology, which is just one way to keep ahead in this ever-competitive sector.
Because of the heavy reliance on importation, it is important that businesses streamline their shipping processes in order to stay profitable as a business. Read on to find out how Brexit has hit the industry and the current effects of new legislation, as well as what large and small construction businesses, can do to keep ahead in an industry that is undergoing major changes post-Brexit.
How Has Brexit Affected the Construction Supply Chain?
Brexit has vastly changed how construction management operates at every point of the supply chain. As an industry, construction heavily relies on importing all kinds of materials in large quantities and with Brexit shifting how goods can enter the country, it has disrupted the industry on many levels.
Importation costs more
‘Imports account for 24% of construction products’, which shows just how much construction relies on quick and cost-effective ways of importing materials. Now, all sorts of goods are more heavily taxed, unlike when we were a part of the EU, making this part of the construction supply chain more expensive.
Border checks add delays
With extra taxes and not being a part of certain EU regulations, comes more paperwork. Initially, when this was put in place, it caused drastic delays. There is still more paperwork and border checks post-Brexit which importers have had to adjust to and these extra administrative duties have slowed the importation process.
Construction has benefitted from the free movement of people and the ability to easily employ those who aren’t British nationals. Since Brexit, laws around working in the UK and immigration have made it increasingly difficult for non-nationals to come over and stay in Britain. The new point system has meant many construction workers can’t carry on working in the UK.
Meeting both EU and new UK standards
Although the UK is no longer part of the EU, many new UK laws and standards haven’t been fully established, as a result, many British companies have to meet both EU and UK standards simultaneously.
Double product conformity assessments mean businesses have more to consider and more regulations to meet, which can cause extra hold-ups at many points in the supply chain. Preparing goods and paperwork can take longer, as well as clearing everything through customs, as the paperwork has to be checked.
Procurement has become more challenging
Brexit has left many businesses feeling uncertain with unfinalised trade deals and as a result, procuring contracts and maintaining relationships with businesses abroad has become more difficult.
There are still many unknowns and for some businesses, such as suppliers, this has been a deterrent, making financing and projecting costs more complex. Construction relies heavily on connections overseas and the ability to import and export goods, making procurement crucial to the industry.
Changes to VAT Registration
For both B2B and B2C businesses, the way VAT operates in the UK has changed since we have left the EU. Depending on your business, you will have to check where you have to be VAT registered, if you are providing goods to both the EU and the UK you might have to have two separate VAT registers for each location.
For those that have B2B businesses, it is likely that you will only need to be registered where you have your offices. So if you are a solely UK based company and hold offices here but operate in other locations, you only need to be VAT registered in the UK.
Will Smaller Businesses Suffer More?
The construction industry as a whole is experiencing an overhaul. Each business has to consider how they are currently operating and if there is a better way to do things and with many processes becoming more expensive, the cost is also an important factor.
For many larger businesses, they have tried to compensate for the new challenges Brexit has brought, by pushing extra costs down the supply chain. While this might be an efficient and cost-effective method for larger companies, this means smaller companies can be hit harder by national changes that are affecting the industry as a whole.
The Impact of Covid-19 on the Construction Industry
Because we are experiencing many changes from Brexit alongside changes from Covid-19 and lockdown, it can be difficult to separate the two. Like many other industries, construction has suffered due to lockdown, as there is less demand for business and it harder to stay within social distancing regulations, along with other pressures to stop the spread of Covid-19.
At some point, many businesses have had to cease operations and trading and have prompted many businesses to diversify their supplier base. With the world going through incredible changes as to demand and the way businesses operate, many companies are looking for alternative solutions to the current situation that faces them.
There have been huge changes to the industry because of both Brexit and Covid-19 and it can often be hard to separate these pressures, although both call for new, alternative solutions.
How the Construction Industry Can Realign Its Supply Chain
Brexit has brought many changes to the construction industry and in order to meet these challenges head-on, new methods and technologies can be used to religion the construction supply chain. KlearNow’s AI technology is one method businesses can employ to make importing and exporting goods a more streamlined process.
Embracing KlearNow’s AI technology with its cloud-based platform puts you in control, as you will have end to end visibility of the entire logistics process. Many of its features, like digitising documents, tackles the extra paperwork that needs to be stored and processed along with the new Brexit regulations.
By improving the logistics process and making it more efficient at every point of the supply chain, you can save on time and resources. Because importing and exporting goods has become a more complex, time-consuming and resource-intensive process, it is long due to change using the new technologies that are available.
What Klearnow Can Offer:
There are various features to our new cloud-based platform that could benefit construction importers and exporters in particular. Here are some of the benefits to construction that have proved the most beneficial:
Digitising All Documentation
Digital documents are easier to find, search and store making record keeping accessible and simplistic. They can be easily accessed by anyone who needs to at any point of the goods journey.
This makes simple tasks like administration and records management simplistic, saving your employees time and making clearing customs a quicker process.
Real-Time Visibility of the Process
This is one feature that puts businesses in control, giving you the correct information to make informed decisions if you need to. Our technology enables you to see exactly where your goods are in real-time at every stage of the logistics process.
This feature can allow you to foresee delays and even avoid extra incurred fees, with regular updates. This lets you know if your goods are held up at a checkpoint and can allow you to take action, giving you control over importing goods for construction.
Klearnow Has Access to Multiple Routes
As a logistics company, we have access to multiple routes which is incredibly useful when shipping goods. This means that we can choose the quickest, most efficient routes for your goods to take.
Because we have access to multiple routes, this also means we can switch routes if there is a delay, giving your business more options and making your goods much more likely to arrive on time.
Simplistic Payment With One Flat Fee
Moving large amounts of raw materials, preparing paperwork and dealing with possible incurred charges, can make the financial aspect of shipping goods another complex part of the shipping process.
KlearNow only requires one flat fee, making moving large quantities of materials and regular shipments more simplistic and easy to manage, with no extra charges for using our cloud-based, AI technology.
If you want to know more about how KlearNow can revolutionise your construction supply chain, then get in touch. You can also find out more information about Brexit, customs clearance and industry-relevant topics on our blog.