Delays at UK ports have hit production at folding bike maker Brompton Bicycle due to parts being held up on their way into the country, with the West London-based company warning that the “implications are huge” should the problems persist, reports BBC News.
Severe delays are happening at major UK container ports such as Felixstowe and Southampton, while costs of hiring shipping containers are spiralling globally and some operators are not currently sailing from the Far East to the UK as the end of the Brexit transition period looms.
According to Brompton, some 1.5 million parts destined for it are either held up in shipping containers or have been cancelled due to the port issues, and the company says that some staff may have to be sent home if production is suspended.
Lorne Vary, the company’s Chief Financial & Business Development Officer, said: “The implications are huge. Our bikes are made up of 1,200 parts and if we run out of just one then we grind to a halt.
“If we send staff home then of course we will continue to pay them but paying for overheads when you are unable to produce is obviously unsustainable.”
Alex Veitch of trade organisation Logistics UK said that “the three C's” were to blame for the problems at the container ports.
“It's the Christmas rush, coronavirus, which is still causing supply chain disruption, and now customs – or the uncertainty around it, with businesses taking the decision to move goods in and out of the UK in case there is a no-deal Brexit,” he explained.
At the start of 2019, Brompton revealed that it had leased a warehouse close to Heathrow Airport to stockpile parts worth £1 million to minimise disruption to production in the event of what the company’s CEO, Will Butler-Adams, described as a “shit hits the fan” no deal Brexit.
> Brompton stockpiles £1m in parts as contingency for “shit hits the fan” No Deal Brexit
Last month, however, he revealed that the company had eaten into that stockpile due to disruption in supply earlier this year resulting from the coronavirus pandemic.
“We’d built up this fantastic stock for the worst-case Brexit scenario,” he told AP.
But once the COVID-19 crisis happened, “We struggled to get the parts back in again” he continued. “So we’ve had to eat into our Brexit stock, which has saved us in many respects.
“But it now means, having been prudent and got it all organized three years ago, we’re now sitting here with a month to go and we’ve got no Brexit stock and we’re facing Brexit.”
There was one piece of good news for the company this week, however.
As we reported yesterday, the Department for International Trade has confirmed that it will not be removing anti-dumping tariffs on bikes originating from China.
> EU anti-dumping rules on cheap Chinese bikes to stay post-Brexit after government U-turn
Butler-Adams had said that scrapping the measures, originally introduced by the EU in 1993 and which currently impose a tariff of 48.5 per cent, would see the UK market flooded with cheap bikes from China.
Reflecting on that prospect, he said: “We can’t compete. That is not a level playing field.”
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