'It's amazing how many vendors don't have a Brexit strategy' - distie boss

Alex Tatham reveals that the distributor has bought increased space to stockpile for a no-deal Brexit

Westcoast has been increasing its capacity "significantly" in preparation for a no-deal Brexit scenario, MD Alex Tatham told CRN.

Speculation has been mounting that customs checks will cause long delays at Britain's main ports in the event of a hard Brexit.

Recent weeks have seen a number of channel companies unveil their no-deal Brexit strategies, including HP's plan to use multiple ports around the country and Exertis using extra warehousing to stockpile SonicWall gear.

Delays at ports are a concern for Tatham, and he revealed that the company has bought 3,000 extra pallet locations in two storage warehouses to stockpile a "large amount" of product.

He also issued a warning to vendors that have yet to formulate their own strategies in the event of a no-deal scenario.

"It is amazing how many vendors have not got their own Brexit strategy organised - they haven't woken up yet," he said.

"If they come to me at the last minute asking if I want to buy extra stock, there are several challenges.

"One is that I might not have the capacity, another is that I might not have enough money and a third problem is negotiating the terms.

"There is some planning required here and lastminute.com is not going to work."

The distie boss praised HP for its Brexit planning, stating that the vendor is much more active than others he has spoken with.

"It is very interesting to look at the level of awareness and focus from each vendor because it varies dramatically," he said.

"I recently spoke with a significant vendor and asked if they would like us to buy extra stock from them and they said they haven't really done anything yet [re Brexit planning]."

On its Brexit blog, Westcoast advises customers to forecast demand beyond the 29 March deadline to ensure that orders after that date can be met.

It also advises customers to order stock available in the channel rather than relying on build-to-order devices that might be delayed at the border.

Tatham is also concerned about transporting stock from its UK facilities to Ireland.

Westcoast delivers through Belfast and Dublin, but the distie boss laments that a hard border on the island could exacerbate delays of stock to Irish customers.

The firm anticipates increased stockholding in its Irish warehouse, though this building was designed to accommodate partner needs, not to be used as a haulage and logistics facility.

"We have a responsibility," the MD told CRN.

"However, stockpiling is not going to sort out the problem. A no-deal Brexit is going to be a disaster. It is going to cause significant delays and every one of our freight forwarders has said this."

Channel urged to plan for Brexit

Tatham's warning is echoed in recent research published by market watcher Context, which implored channel players to put contingency plans in place.

The analyst predicts the impact of Brexit will cause IT distribution growth in EMEA to slow in the second quarter of 2019.

IT distribution grew over six per cent year on year over the last 12 months in the region.

However, that growth is forecast to slow to between three and six per cent in Q2 due to the effects of Brexit and reduced demands in EU economies.

The UK recorded 8.7 per cent year-on-year growth in IT distribution in 2018, but that figure could be reduced in the event of Brexit, the analyst stated.

The research house urges channel companies to cement their contingency plans in the case of a no-deal Brexit, as well as budgeting to cover any temporary revenue decline.

Nick Westcott, UK&I country manager at Context, said: "Brexit is making any accurate predictions about UK performance extremely difficult, although all European markets are likely to continue with positive channel growth this year, even if some — like France, Spain and the UK — don't quite match their strong 2018 numbers.

"However, for those distributors ambitious and agile enough to support their partners' and customers' digital transformation requirements, there are gains to be made in cloud, hyperconvergence, cybersecurity and solutions that deliver on the promise of the fourth industrial revolution."