This year has presented many significant challenges, some good and some bad, for us all. I am sure that you have faced a number of personal and professional issues and we sincerely hope that you are ending the year in a safe and secure position. Amidst all the difficulties of 2020, it has been a great source of encouragement to see how people and businesses have adapted and developed to deal with these new circumstances.
At Four D, we have obviously prioritised the health and safety of our staff and operations as I’m sure you have. The fact that we have been able to continue to manufacture throughout the pandemic is a huge tribute to their efforts and testament to the steps we have taken. It has meant that our supply of products and materials to key sectors including dental, medical and food manufacture have been maintained. We have been honoured and humbled to be able to support these areas, now more than ever.
Below are some key updates we wanted to share with you as the end of the year rapidly approaches:
A financial impact of the pandemic on our business has been the demand (and therefore price) for the raw materials we use for latex and for latex free products as they are also the primary components in glove manufacturing. This has been further compounded by supply chain disruption and increased shipping charges.
We have absorbed these costs in 2020 and we are trying to minimise the impact on customers going forward. However, in order to protect the future viability of the business, we need to reflect part of these market increases in our pricing. Therefore, our prices will increase by 4% for all orders placed from 1 January 2021.
Brexit – Impact on shipping terms
As I’m sure you are aware, the Brexit transition period will end on 31 December 2020 and the UK will no longer be part of the EU trading block. The exact terms of the UK’s future trading relationship with the EU are still to be finalised. However, all options under consideration will mean a change to the practicalities of doing business between the UK and the EU and could lead to short-term disruption
We advise all customers to look at your likely requirements for Four D products in early 2021 and provide us with orders or forecasts in good time to mitigate any Brexit related issues We have put in place a strategic inventory of raw materials to help see us through this period but this change is coming on top of the impact of Covid..
The below covers the specific changes arising due to Brexit which impact mainly on our EU customer base. However, the potential delays at ports and stricter requirements for export documentation may impact upon all customers outside of the UK. The expected main ongoing impact of Brexit is that the rules on tariffs and VAT will change from 1 January 2021 for all goods exported between the UK and the EU. For clarity, our standard Incoterms for shipments after this date will be EXW (Heanor, UK). If Four D is responsible for delivery of your order, then the Incoterms will be Delivered At Place (DAP) / DPU (Delivery at place unloaded).
These terms should provide the most transparent and cost-effective supply process and should minimise the risk of delays at borders. Your pricing for deliveries after 1 January 2021 will be quoted either on EXW or DAP/ DPU terms. Under new UK legislation, we will also need documentary evidence that the goods have left the UK to avoid charging VAT on the invoice even if the terms are Ex Works. The specific evidence required will depend on the shipping method selected and will be clarified when collection is arranged. If you are located in the EU and wish to trade on different Incoterms then please contact a member of the sales team to discuss the options.
It is likely that there will be some short-term disruption and shipping delays in the first few weeks of 2021 for goods being exported from the UK particularly to the EU. We are working together with our service providers, to try to keep these to a minimum and we have put in place strategic inventory should shipments into the UK be disrupted. In shipping to other regions of the world under World Trade Organisation terms, tariffs are not generally applied to our products providing the appropriate tariff codes are used.
MDR – Medical Device Regulation
I am delighted to announce that we have secured our ISO13485 Class1 Certification for another year. We have strengthened our Quality and Technical team as we look to strategically develop this area of the business over the coming years and ensure compliance with ever increasing legislation.
In 2021, the change from the MDD Medical device Directive to the new EU Medical Device Regulations (MDR) is likely to represent the biggest compliance challenge. We have invested huge amounts of time and money in ensuring that our products meet these standards on an ongoing basis.
For customers using our private labelling services for medical devices, we will be communicating out separately a more detailed approach in the new year on how we need to work together moving forward to ensure compliance. This is a very important and valuable sector for us, and we will work collaboratively to meet requirements and minimise the cost impacts.
Four D Developments
At the end of December, we are moving our warehousing and dental finishing operations to modern new premises close to our existing facilities. This is a key step in our growth strategy and will enable us to improve and develop our UK medical device capabilities to meet future customer needs.
Together with the site move and strategic development of the business, we are upgrading our sales order system to a more comprehensive package with improved traceability and planning capabilities. This change will be effective as of the 1st January 2021. As with any new system there may be teething issues and I would like to thank you in advance for your patience and support as we work through any problems. Planning, preparation and testing is underway to make the transition to be as seamless as possible.
Finally, your relationship with Four D is extremely important to us and we welcome any feedback you have on how we can improve and develop our products and services. Please do email us with any constructive comments and we will be glad to review them with you.
Thank you again for your business and support in 2020. Please take care and we look forward to working closely with you in 2021 in what more normal circumstances will hopefully be.
Business Development Manager