Procurement in the first half of 2027: what to renegotiate first

Most supplier concentration reviews start from the purchase ledger and rank vendors by annual spend. A business whose largest supplier holds a modest share of spend concludes that it is diversified. The ranking misses two things that decide what happens when a supplier fails.

The first is shared origin. Three approved suppliers of the same component can buy from the same mill, ship through the same port and clear through the same customs broker. On the vendor master they are three relationships. In a disruption they behave as one. The purchase ledger cannot show this, because it records who invoiced rather than where the goods were made or how they moved. Country of origin on import entries, the shipper named on bills of lading and the broker named on customs declarations usually can.

The second is substitution time. Spend share says nothing about how long the business can keep selling if a supplier stops. A cheap packaging item with one qualified source and a requalification process measured in months can halt more revenue than a large supplier of a commodity that three others could deliver next week.

We measure concentration as days of sales at risk. For each item, take the sales that depend on it, the stock on hand and in transit, and the realistic time to qualify and receive from an alternative source. Items where the time to replace exceeds the cover are the concentration problem, whatever their spend. In commodity sourcing, food, construction supply and the automotive aftermarket, the resulting list is usually short, and it is the list to carry into the renegotiations described below.

Several charges inside the cost of imported goods change during the planning window, and each one depends on data held by a supplier or a forwarder.

The EU Carbon Border Adjustment Mechanism (CBAM) entered its definitive period on 1 January 2026. Importers bringing in more than 50 tonnes a year of covered iron and steel, aluminium, cement or fertiliser goods need authorised declarant status. Certificates covering 2026 imports go on sale on 1 February 2027, priced on the quarterly average of EU emissions allowance prices for the quarter of import, and the first annual declaration is due by 30 September 2027. A cost incurred on goods received through 2026 therefore leaves the business as cash in 2027, and most landed-cost comparisons made during 2026 left it out.

The UK runs its own mechanism from 1 January 2027, covering aluminium, cement, fertiliser, hydrogen, and iron and steel. Registration with HMRC is triggered at £50,000 of covered imports, tested forwards over the next 30 days and backwards over the previous 12 months. The first accounting period is the whole of 2027, with the return and payment due by 31 May 2028.

Both mechanisms allow the importer to use verified actual emissions from the producing installation. Without that data, the declaration relies on default values. The supplier's emissions data has become a term that changes the landed price, and few supply contracts mention it.

For direct-to-consumer sellers shipping into the EU, the customs duty exemption for consignments of €150 or less ended on 30 June 2026. A temporary flat duty of €3 per item applies until 1 July 2028, where an item means each tariff classification in the parcel, so a parcel holding a T-shirt and a watch pays twice. Product identifiers become mandatory in those declarations from 1 November 2026.

Freight carries carbon cost as well. Under the EU Emissions Trading System, shipping companies surrendered allowances for 70% of their 2025 emissions in 2026, and from 2027 they surrender for 100% of reported emissions. Carriers pass this on through surcharges, and the surcharge clause in a freight contract decides whether the shipper can see how the figure is calculated.

Inventory reports usually split stock into available and allocated. Allocated stock looks safe because a customer is attached to it. It is often the least liquid stock in the warehouse.

Allocation happens when a sales order is entered. If the order then stalls, the stock stays reserved. Common causes are a deposit that never arrived, a credit hold, a part-shipped line waiting for one missing component, or a marketplace order cancelled on the channel and never cancelled in the ERP. The reserved stock cannot be sold to the next customer, it never appears in the excess report, and the replenishment logic treats it as consumed and buys more.

Open purchase orders hold cash in the same way. An order raised for a season or a project that has since changed keeps its quantity in the system until someone closes it, and the supplier is entitled to ship against it.

The records already hold the answer. List every open sales order line with stock allocated, its age, the date of the last customer contact and its payment status. List every open purchase order line with its promised date, the date it was raised and the demand it was raised against. Lines past an agreed age with no activity go to a named owner, who confirms, releases or cancels them. Released stock returns to available before the next buying round, which is the point at which it saves money.

Price is the term most buyers open first, and in 2027 it is the term with the least room. The order below follows the costs that are actually changing.

Start with contracts where a 2027 charge lands and the contract says nothing about it. That covers CBAM goods bought without an emissions data clause, parcel flows where the €3 duty and the identifier data were never allocated between seller, marketplace and carrier, and freight agreements with an emissions surcharge whose basis is not disclosed. The commercial question in each case is who supplies the data, by when, and who bears the cost if it is missing or late.

Next come the single-source items on the days-of-sales-at-risk list. The aim here is a qualified second source or a stock commitment from the supplier, written into the contract, and a discount is a poor substitute for either.

Then payment terms. The Commercial Payments Bill, which completed its report stage in the House of Lords in September 2026, would cap business payment terms at 60 days, with limited exemptions, and make statutory interest of 8% above Bank of England base rate mandatory on late payments. It is not yet law, and its detail may change before it is. A buyer that funds working capital by paying small suppliers at 90 days should model the effect now, because the change will be made either on the buyer's timetable or on the day the Act commences.

Price comes last, once both parties can see which costs each of them carries. This article does not give legal, tax or customs advice. Customs brokers, tax advisers and lawyers confirm the treatment of each flow.

By 1 November 2026, confirm that every low-value parcel flow into the EU carries product identifiers, and that the marketplace or carrier agreement states who pays the €3 duty.

By the end of November 2026, rank items by days of sales at risk, and give each concentration risk an owner and a target date for a second source or a written stock commitment.

By December 2026, list every supplier of CBAM goods into the EU and the UK, request verified installation emissions data, and decide whether to add a data clause or to reprice on default values. UK importers should test the £50,000 registration threshold against the 2027 purchase forecast.

By the end of January 2027, put the cost of EU CBAM certificates for 2026 imports into the cash forecast, so the purchase from February is planned rather than discovered.

From January to March 2027, run the open-order clean-up every month and report released stock and cancelled purchase lines in the operations pack.

By June 2027, set the payment-term policy for small suppliers against the text of the Commercial Payments Bill as it then stands, and agree with finance how any change in working capital will be funded.