Introduction
CAE Technology Services Limited (‘CAE’) has evaluated its supply chains and business processes in preparation for 1st January 2021. While a smooth transition would be welcome, CAE has taken/explored the various steps set out below to enable it to continue to serve its customers with minimum disruption if a trade deal is not agreed between the UK Government and the EEA.
UK operations
As an IT-reseller, much of CAE’s business is reliant on its key vendors and distributors. CAE has been in regular contact with these businesses and is assured that they have taken the necessary steps to prepare for Brexit. These measures include:
- Increased warehouse capacity
- Distributors have embedded compliance with customs requirements and Incoterms into their agreements with key vendors
- Establishment of specialist teams within mainland Europe to manage all customs related matters
- Working with leading accountants such as Deloitte to ensure that internal systems and processes will efficiently manage post-Brexit accounting and VAT changes
EEA operations
CAE has set up a fully operational entity in the Netherlands. It has trading accounts with our key distributors through their European entities. This will enable CAE to serve its customers in Europe, to easily buy and sell within the EEA, and to continue to build its relationships with EEA based customers and suppliers.
We have long-standing dealings with the following companies for delivering equipment to mainland Europe:
DHL & FedEx via InExpress
Arrow ECS
Smart Directions
We will utilize the expertise of these companies to manage post-Brexit customs related charges and paperwork.
Worldwide operations
CAE have obtained an EORI (Economic Operators Registration and Identification) number to facilitate the movement of goods worldwide.
Key risks
CAE is committed to minimizing the impact of these risks listed below by working closely with its customers, using its forex hedging ability, liquidity and leveraging its strong relationships with its key partners.
| Risk | Mitigation |
| Disrupted logistics Delays at ports |
Up front identification of project risks with additional time built in for shipping
Use of alternative routes where available Shipping from European centres through our Netherlands entity |
| Availability from manufacturer | Manufacturers are increasing stock levels within distribution channels
Cisco have confirmed there will be no direct shipments from December 27th for 2 weeks as it updates its systems to cater for Brexit No long-term impact is expected on availability |
| Tariffs
|
IT infrastructure is zero rated under WTO rules. Minimal expectation of tariff imposition under a trade deal |
| Currency fluctuation
|
Option to be quoted and invoiced in Euros from either the UK entity or the Netherlands entity
Forward orders are hedged against currency fluctuation to give pricing predictability |
| Data Sovereignty | Expectation that GDPR will remain as a minimum standard
Clear identification of where data is held to ensure future compliance |
| Continuation of service | All service provision expected to continue without disruption
Passport duration highlighted to engineers potentially required to work across European borders |
| Resource availability
|
Checks completed across the workforce with no issues reported on the right to work in the UK or Europe
Ongoing specialist advice for recruitment and potential visa requirements |
Summary
While no amount of preparation can perfectly anticipate the future CAE is confident that it will continue to provide an uninterrupted service to its customers and work closely with its key partners after Brexit.
If you have any specific concerns, please address them to your account team or via brexit@thisiscae.com
