The past year has seen previously set-in-stone rules of global supply chains brought into question and the world’s logistics and transport held in a constant state of flux. Now is the time to act to safeguard these crucial sectors and protect the whole length of the UK’s supply chains.
The British logistics and transport sectors have adapted to changing rules, regional lockdowns and shifts across all markets. They are now coming to terms with the bottlenecks and bureaucracy that will likely define 2021, yet they are still expected to continue getting people and goods to where they need to be, on time.
Small suppliers struggling with fluctuating demand and reduced resources are facing a perfect storm of Brexit bureaucracy and red-tape combined with a third national lockdown. The Federation of Small Businesses found that 62% of small businesses have experienced either an increase in late payments and/or had payments frozen completely as a result of Covid-19.
Across multiple industries, practices of long payment terms mean that suppliers of the firms that struggle financially from Brexit will be left significantly out of pocket. As unsecured creditors, they have little chance of recovering their invoice values if businesses go bankrupt, which puts the whole supply chain at risk.
The government can go further to protect British transport and logistic SMEs who rely on European supply chains by ensuring fast payment of invoices. One way to do this is through regulation that is designed to ensure that SMEs have access to prompt invoice payments that is not to the detriment of the rest of the supply chain.
Machine learning makes it possible for every large corporate to provide fast invoice payment in a way that is also sustainable long-term for its own cash flow. The technology and processes exist to enable suppliers to access cash immediately without buyers having to speed up their payment processes.
According to Harvard Business Review, securing supply chains without losing a competitive edge will be a high priority for companies in the near future. Paying suppliers faster demonstrates a real commitment to sustainability. It also strengthens supply chains at very little cost – a massive bonus for the logistics and transport sectors as we recover from the pandemic and find our feet in post-Brexit trade with the EU.
To create sustainable supply chains, we need to take on the inertia that suppliers face when trying to get invoices paid on time. This will allow companies to plan effectively, avoid bottlenecks and invest in their resources. If the government and large corporates work in harmony to pay their suppliers faster, Britain’s transport and logistics sectors will do more than just weather this storm; they will grow, thrive and, crucially, keep our supply chains moving.