The UK companies seeing the upside of Brexit

As many UK ports struggle with delays and falling trade after Brexit, in Liverpool Stephen Carr is hiring 150 dock workers. “We are at 80-90 per cent capacity at the moment and growing,” said Carr, the commercial director of Peel Ports, which counts Liverpool as one of its UK shipping hubs.

The Covid-19 pandemic and new border controls with the EU have upended business models across the continent and the economic impact is starting to be felt. Fish and meat have been left to rot because of delays and complicated paperwork. Many companies have stopped delivering to and from the UK because of increased charges.

Economists predict leaving the EU will reduce the UK’s prosperity but, amid the disruption, opportunities are available, argues Mark Gregory, UK chief economist of EY, the professional services firm. “Brexit is a process not an event and the winners and losers will only become clear over time.”

Liverpool, the UK’s fifth biggest container port, in north-west England, is one of the early winners, gaining traffic from southern rivals as logistics companies try to avoid congestion at the busier Channel crossing points.

In recent months three new services into Liverpool have started, following investment of more than £400m. One brings unaccompanied containers from Santander in northern Spain weekly. “That would have driven through France and gone across the Channel before,” said Carr.

Another has won transatlantic freight trade, destined for northern England, from the congested southern port of Felixstowe. Rather than risk delays there, shippers load it on to a smaller vessel that stops at Liverpool.

The third is Liverpool’s first link with east Asia in decades. Shipping line CMA CGM stops in Dunkirk to offload containers and collect others from northern France and Belgium before heading to Liverpool.

Some EU retailers have also decided to hold more stock in the UK to ensure they can guarantee delivery times amid border delays. One UK logistics operator, who declined to be named, said it was opening warehouse space for EU clients. “We are working with a Polish company,” it said. It holds stock and delivers for EU customers in the UK, while its Polish counterpart does the same in the EU, limiting border crossings.

“There will be a lot of these partnerships,” it said. 

Some manufacturers have reshaped their operations to make the most of the changed trading environment.

Statiflo, a maker of static mixers used in the water and other industries, has switched its warehouse to supply countries outside the EU from Germany to its Macclesfield base. “We could have built up our German operation but we have the expertise in the UK,” said Gareth Fry, managing director. It exports to more than 80 countries and is used to dealing with customs paperwork. “The problem is that companies who only sold to Europe were not really exporting. They don’t know what to do now,” Fry said. 

For Brandauer, a 160-year-old family-owned engineering company, the drop in the pound caused by Brexit has boosted overseas demand for their products. The Birmingham-based firm expects to grow beyond its pre-pandemic size this year and is recruiting.

“We have won business in France, Netherlands and Germany recently,” said Rowan Crozier, chief executive. “We have not lost a single EU customer.”

Brandauer, which makes precision components which go into cars, razors, medical devices and the Large Hadron Collider in Cern, exports 75 per cent of its output.

EY’s Gregory said he expects manufacturers will shift production for the UK into the country, while they shut operations that are part of EU wide supply chains. So even as EU overall inward investment dropped in the four years after the June 2016 Brexit referendum it increased in some sectors as companies prepared to make products in the UK for the British market.

“There is likely to be growth in UK investment in sectors such as food and advanced manufacturing as supply chains shift in response to the new trading requirements while export-oriented sectors such as automotive and financial services could well experience capital outflows,” he said.

Inevitably, given the extra red tape and paperwork associated with the EU-UK deal agreed by the two sides on Christmas Eve, one big growth market is bureaucracy. 

Watford-based accountancy firm Hillier Hopkins became an accredited customs agent after the government said UK businesses would need to make 255m customs declarations a year, up from 55m before Brexit. 

Ruth Corkin, a former HMRC staffer, used government funding for training and has now employed an apprentice to help. “We could see there would be a market,” she said. She added that the software needed to fill in declarations was too expensive and complicated to operate for small companies so her service was vital and getting busier.

HMRC’s Customs Declaration Service (CDS) is difficult to access by businesses and is still being developed. At the moment the old Chief system is being used for most transactions and can take between three and 12 months to register and secure the software needed.

“It is so time-consuming. If it carries on like this I will have to reduce my VAT work. That will mean hiring someone else,” added Corkin.

Simon Hart, international lead partner at RSM, the accountants, said he expected the system to bed down. “We are going to have to get used to more paperwork. If you are best in class people will come to you regardless of whether they have to fill out some paperwork,” he said.