Why should British manufacturing businesses consider reshoring?

For many businesses who trade internationally; Brexit, the Ukraine Russia conflict and ESG initiatives have meant that importing and exporting has become more difficult than ever.

With a number of new legislative changes to tackle, reshoring and supporting British Manufacturing should be considered for those looking to save costs and avoid supply chain issues.

We understand that completely UK sourced supply chains would price most items out of the reach for most customers, but sourcing as much as possible, as local as possible, has to be a consideration to support the future of British manufacturing and UK consumers too.

We can help you to build a winning business strategy and fund it, whether that’s based on importing, exporting or reshoring.

Speak with our Manufacturing, Customs Duty, and Sustainability specialists to see if we can help your business.

Customs Duty

It's challenging to stay on top of constantly changing regulations and global issues.

UK carbon border adjustment mechanism (CBAM) is on the horizon, this will impact imports into the EU, and will accordingly affect exporters from the UK.

Examining export data from the Management Support System (MSS) would help shed light on this, and we can support your business in examining commodity codes and other important metrics including volumes of exports and relevant destinations.

Businesses should consider the reporting processes in the EU and make sure they can comfortably meet the new compliance requirements. 

Exporters must also be aware of the place of origin of their goods and the possible expenses of import duties. If import duties are required, they should look into ways to reduce them.

Ensure postponed import VAT accounting is utilised for cashflow savings plus efficient ERP systems to manage UK VAT compliance; and if exporting the finished products, check incoterms/commercial arrangements to see if liabilities overseas and back round to the origin point, are the goods “British” from a Customs perspective.

Environmental, Social, and Governance (ESG)

Since an organisation's ESG policies and actions grow more and more significant to investors, employees, customers, and the larger communities in which they operate, ESG is now unquestionably a topic on the boardroom agenda.

ESG areas that are most likely to have an impact on importers and exporters include:

Finding out what parts of your supply chain can be returned to the UK is a logical, if not always easy, place to start. We work hard to bring the manufacturing community together, to share ideas and foster collaborations.
It can be difficult to obtain materials ethically; examples of areas where manufacturers should conduct due diligence before sourcing overseas are contemporary slavery and human rights.
The UK aims to achieve Net Zero carbon emissions by 2050 and a 68% reduction in carbon emissions by 2023. Manufacturers will need to report their carbon footprint and identify potential areas for reduction.

Manufacturing Businesses Outlook

Manufacturing companies in the UK and elsewhere will undoubtedly find the upcoming few months to be crucial.

Supply chain issues, combined with the cost of working capital, lacklustre economic growth and continued global uncertainty will provide real challenges for business.

Reshoring could be good for business, our country and its residents as well as the environment. 

Its true that some products and services are best sourced from abroad. We don’t, for example, have a strong domestic semi-conductor industry and rectification of this will take time, initiative, and resources beyond the reach of most UK businesses. However, that doesn’t apply to everything and global events surrounding volcano eruptions, blocked shipping canals, the pandemic, and geopolitical conflicts have all disrupted supply processes causing unacceptable delays to many OEM’s.

This has and will continue to drive the need for OEM supply chain managers and their suppliers to reconsider an aspirational supplier list that has shorter travelling miles and quicker supply, over and above, pure cost.

Couple this with the need to decarbonise too; and it presents a real opportunity for manufacturers to challenge the status quo, caused by a generation of buyers exercising ‘flight to value’.

The UK has always been a trading nation and it will always be both an importer and an exporter. However, the case for reshoring has, given the events of just the last few years possibly never been as strong. We hope that this document and its links stimulates the reader to think about the possibilities. 

What our 2023 manufacturing survey said

Debt Advisory

Funding is frequently required for manufacturers to increase capacity and re-tool.

Our Debt Advisory team can help you find the solutions to keep you on track.

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With the knowledge and ability to tackle every situation, both domestically and globally, our manufacturing team works with a wide range of specialised advisors and businesses. Building long-term relationships is something we are proud of.