PC hardware manufacturers and retailers are having to play by new rules and suffer higher costs in order to receive shipments of the latest components and peripherals into the UK post-Brexit, industry sources tell PC Gamer. This does not preclude raising costs or indeterminate delays, either, as the impact of industry-wide shortages, tariffs, and soaring demand are often worsened amidst another more localised storm cloud.
The latest PC hardware can appear unattainable in 2021. From Nvidia GeForce RTX 30-series graphics cards, most of all the GeForce RTX 3080, to AMD’s Ryzen 5000 processors and Radeon RX 6000-series GPUs, it’s hardly the start to the year we were hoping for in the DIY PC market.
But there’s another entity looming overhead that may be having some impact on us Brits’ ability to score the latest components and peripherals.
It’s hardly surprising news to those of us that call the United Kingdom home that our departure from the European Union is causing difficulty for goods entering or leaving the country. Delays to customs clearance is leaving haulage companies stranded, or worse yet forcing them to make return journeys prior to reaching their destination, and the reintroduction of red tape is causing some businesses to either cut ties with the EU altogether, put a temporary hold on UK-EU shipments, or relocate over the English Channel and within the Customs Union.
Speaking with retailers and manufacturers within the UK, it’s clear that the PC hardware market in the country is similarly affected by Britain’s withdrawal from the European Union, and that couldn’t come at a worse time as PC gaming faces a severe crunch on components anyway.
“It can be a difficult pill for the average consumer to swallow… because the prices are going to increase.” Graham New, senior product manager at Ebuyer, tells me.
“I think the [RTX] 3080 MSRP is going up. Soon, I think I’m seeing that announced, and the card that may be £700 at launch is going to be £750 soon. It’s because the cost of the item is increasing. There are additional component costs, there’s additional freight charge now. There will be other factors like exchange gain, or the dollar rate or the Euro value that affect everything as well. But ultimately, the price of that card will go up. And it might not be obvious to every consumer why. It might just look like the retailer might try to make a bit more margin, generally it’s not.”
According to manufacturers we’ve spoken with the additional freight charges are taking a toll on imports for large PC products and orders. Freight charges are up “considerably”. Slower haulage and shipping turnarounds are resulting in significantly higher shipping costs per item for import, and these can total significant increases in cost for big-ticket items, such as gaming chairs, but also high quantity orders for less pricey items, such as PC cases.
“I was speaking to one of one of the big case vendors who was saying that they used to attribute $3 to the cost of a case for carriage,” New explains, “And that would be, say you have 300 cases in the container each day, they’ve added a cost of $3 each for the case. And that would cover the shipping costs. But now it’s something like $12.
“And obviously it’s not just cases, it’s everything.”
One manufacturer tells us that shipping costs for a pallet of gaming chairs has risen 600% compared to what they were before January 1, 2021.
Shipping and container costs would often have been offset by the use of central distribution centres, often located in mainland Europe. An order destined for the UK could have been bundled as a part of a larger order alongside product headed elsewhere, sent to the distribution centre, and then forwarded on to the UK without excessive charges. This is no longer the case, however, as the British/EU connections are some of the most congested, which in turn makes for a less flexible supply chain.
It’s not all doom and gloom for the well-prepared, however, as major manufacturers were somewhat ready for the worst. Those with more robust, or at least well-fed, supply chains tend to see their own position more favourably to others. Company representatives at two major manufacturers tell us that they’ve stockpiled some stock to keep a steady supply in check, and major UK retailer Scan also tells me that it “buffered stock” late 2020 in anticipation of some delays. While others are prepared to order direct from a product’s origin or place of manufacture and have it delivered at the port with the lowest lead times for pickup by a haulage company.
The latter is a less-than-ideal approach, but we’re told it’s preferable to waiting for imports from the EU to materialise.
The possibility of ordering significant quantities to offset the costs is a benefit offered to only the largest known brands, however, as only they have the infrastructure and capital to place larger than average orders, or the data to back up an otherwise risky practice.
“Brexit has affected every brand a bit differently depending on what their contingencies have been, and how well they planned for the delays there were going to be,” New explains. “Because there are delays, across every category there’s been stock waiting at ports, waiting for approvals. Because, despite how long it’s been, people and companies still don’t really know what needed to be done in order to get a container full of whatever from China through the ports into the UK ready to sell.”
“There’s still been question marks over what compliance means doing, what paperwork needs doing, and that kind of thing. So there has been a delay, pretty much on everything, on every brand, but quite a lot of brands maybe stocked up with distributors in the UK ahead of time.”
Some companies have decided to pause shipments to the EU indefinitely, at least until a clear answer to cross-continent shipping and customs has been found, as one of Scan’s Brexit Specialists explains.
“What we want for EU consumers is to place the order to Scan and within a few days our customers receive those goods without someone asking them for VAT/Duty and admin fees,” a Scan representative tells PC Gamer. “This has proven quite challenging. Distance selling rules, VAT thresholds per-country, courier admin costs running from £5 to £25 (and in some cases limitless as it’s a percentage of the VAT due) presents us with costing challenges. And, once we get over these hurdles, we are then presented with challenges for arranging shipments back to us for an unwanted or faulty product.
“B2C [business to consumer] sales into the EU is a real challenge and is still evolving in terms of its maturity of process. We have temporarily suspended export B2C sales until we cross all t’s and dot all i’s.”
Scan is, however, hopeful that this is only to be a temporary measure.
“What we have noticed is that despite our preparations and our clearance brokers being ready, the understanding of export processes and timely notification of pending imports has been lacking for a small number of vendors. It’s almost like ‘rabbit-in-the-headlights’ for some of them… we are working through this and expect this to improve over time.”
A company representative tells me it has seen “no major supply issues” besides those out of its control, such as RTX 3080 shortages. A slightly rosier outlook, at least, as Scan holds that the steps it took to mitigate the impact from Brexit early on have allowed it to trade outside the UK without running into major issues.
As is ever becoming the motto of 2021, it’s a case of waiting to see how it all unfolds before calling the year a write-off. The impact of Brexit appears to be wide-ranging, with varying severity business to business, case to case.
In February. There’s a general hope that port waiting times will gradually reduce and costs decrease alongside them, and furthermore a greater understanding of what’s required for trade in a post-Brexit world is made clearer and more concrete solutions can be set-up.
Many of those I spoke to considered current consternation among businesses to be the result of a lack of clarity on the future relationship between the UK and the EU at a business level, i.e. what needs to be done to actually do business across the continent as unimpeded as possible.
Over at Ebuyer, there’s some hope that pricing and freight issues will balance out a bit later in the year, but sadly with the caveat of not before price increases are rolled out.
“It’s trying to get that message across to consumers that price increases are coming, but that there are factors, there are reasons for that,” New explains.
It’s far from isolated to PC hardware, of course, and only a symptom of a much larger issue that extends far beyond Britain. It’s a problem facing PC gaming as a whole in 2021: stringent supply of graphics cards, CPUs, and key electrical components aren’t making it easy to escape from it all with the latest games.
And it could be a far more immediate problem than what faces our humble hobby. As one company representative tells me, transport delays are far more pressing when dealing in perishable goods. Thankfully, then, graphics cards don’t come with an expiry date.
There’s no underselling the massive demand for PC parts over the course of 2020 and into 2021, either, as all those I’ve spoken to have expressly mentioned. PC gaming is big business and only getting bigger by the day. Swelling demand for at-home entertainment alongside COVID-19-related delays through the supply chain, retail, and delivery networks—all impacted by new measures to ensure safety—have only been seen to exacerbate related issues to the already sky-high demand for PC parts.
The RTX 30-series and AMD RX 6000-series are also some of the most impressive graphics cards we’ve seen, as are the latest CPUs, which no doubt spurs additional interest the gaming world over.
So if GPU pricing seems at all nebulous and inconsistent right now, that’s because the entire industry and supply chain is working to a set of rules far beyond ‘business as usual’. Let’s just hope the added uncertainty of Brexit doesn’t see the cost of doing business inside the UK fall on customers shoulders. Sadly, something tells me it might.