Brexit Archives | Page 11 of 24

EU border disruption impacting trailer availability

Feb 3, 2021 | Brexit, Customs, EU, Road, Supply Chain, Technology

Problems finding import trailers from the EU is being blamed on the slowdown in exports from the UK, which are currently 30% below normal levels, but with continuing delays at the border, the more likely issue is it is less financially or operationally attractive for European hauliers to send their lorries to the UK.

Most of the lorries that carry cargo into the UK are European based and not British owned operators and the combination of border delays and lack of export demand, mean that almost half are returning to the continent empty, at a cost to their haulage businesses.

This in itself is creating even less incentive for hauliers to operate vehicles to the UK which is resulting in transport costs being forced, up through supply and demand and ultimately increasing the cost of shipping to and from Europe and therefore adding further post-Brexit costs to products and consumer items.

The challenges being faced by UK based importers and exporters has been brought into stark focus by a Chartered Institute of Procurement & Supply survey, that found businesses are reporting significant import delays and will run low on stock if the situation continues, with UK consumers likely to face the consequences.

The survey, of UK and EU supply chain managers found that 60% had experienced import delays, with 37% reporting that goods had been delayed by several days.

On the export side 45% had experienced delays, with 28% experiencing delays of several days and just 24% having no problem with exports into the EU.

The Road Haulage Association (RHA) confirmed that there has been a marked reduction in the number of continental hauliers who are ready to send vehicles across the Channel, due to concerns about being stuck at the ports, not having the correct paperwork and testing drivers for COVID. Any delay to a journey adds cost and loses revenue making the UK an unattractive destination for drivers or hauliers.

With freight volumes largely depressed by significant Brexit stockpiling the very real concern is that border delays will increase as restocking demand adds freight volume in the coming weeks. It is widely recognised that year on year volumes are significantly lower in January and February compared to last year with some of our partners advising that they are operating at 50% of the 2020 levels.

These delays may begin to have a significant impact on consumers in the next few weeks, with almost a quarter of businesses (23%) surveyed by CIPS, stating they would run low on stock should the situation at the border continue.

Metro are monitoring the cross-channel situation continuously and continue to submit customs transactions through our CuDoS system, which is increasingly optimised as regimes on both side of the Channel become more established.

Please contact Andrew White, leading our customs and brokerage business unit, for further information.

Brexit update; Cross border EU traffic threatened

Jan 28, 2021 | Brexit, Customs, EU, Road, Supply Chain

Increasing numbers of exporters are struggling to acquire critical transit documents, which allow goods to cross borders within the European Union, because of delays at issuing offices and difficulties obtaining or increasing transit guarantees.

The Common Transit Convention (CTC) allows trucks to move through the European Union and UK using a transit document (TAD), with importers customs clearing and potentially paying import taxes and duties, when goods arrive at their final destination.

The trader, or agent, raising a transit document require a customs comprehensive guarantee (CCG) to cover potential duty, excise duty and import VAT.

But, new CCG applicants, or those seeking to increase their authority need to put up a financial guarantee, often backed by a bank, to cover any taxes or duties on the goods being moved - but they have almost all been committed - and there are delays at HMRC.

NOTE - Metro successfully applied for a massive uplift in our CCG nine months ago, to ensure we would have sufficient headroom to guarantee transit movements for our customers in the first quarter 2021. To ensure we maintain sufficient reserves to meet these customer requirements, we will not be adding new clients, until the current post-transit disruption subsides.

We do continue to welcome your enquiries and will on-board new customers ASAP once a full assessment has been completed.

The press has picked up on the ‘transit’ issue and are reporting how a UK government customs system has been overwhelmed within weeks of Brexit, threatening to trigger more disruption as freight traffic increases.

HMRC is conducting an urgent review into the delayed applications.

Forwarders are complaining that they have no guarantee left and others state they applied several months ago, anticipating a surge in demand because of Brexit, but have yet to receive a response from HMRC.

In response, HMRC said it is aware of the problems applicants are facing and is conducting an urgent review. It blamed delays on a recent software upgrade to its New Computerised Transit System (NCTS) and said it is currently processing 230 applications for transit guarantees, and expects them to be completed within a week.

At Ashford, the closest inland border facility to Dover, drivers have had to wait for hours (some days) to obtain their transit documents and are regularly being turned back, which is particularly concerning, as much longer delays are likely, as soon as freight traffic recovers from its current subdued level, because as much as 90% of UK exported goods being moved will potentially need transit documents.

With red tape and confusion impacting trade between the UK and EU, estimates suggest that about 20% of SMEs have suspended exports to the EU. In general the freight industry is experiencing a very soft market with overland movements to and from Europe with some operators reporting a 50% reduction in consignment flows compared to this time last year. It is expected that volumes of European trailer movements will increase significantly over coming weeks as inventory and buffer stocks deplete and The UK lockdowns are lifted creating additional demand for consumer products. The situation could deteriorate if this is the actual situation.

Metro are monitoring the cross-channel situation closely and continue to submit import and export customs transactions through our CuDoS system, to keep our customers European supply chains optimised and moving. Our platform is getting slicker as the experience builds and the rules of trade and transport become clearer on a daily basis.

Please contact Andrew White, leading our customs and brokerage business unit, for further information.

New EU origin rules catching shippers out – if it isn’t manufactured in UK/EU duty is possibly applicable!

Jan 21, 2021 | Brexit, Customs

All goods with a UK or EU origin require an appropriate declaration of origin to benefit from preferential tariff rates and failure to provide this proof of origin could leave the importer liable for duty and - under some circumstances - the EU may even impose duty twice on the same goods.

The government heralded the free trade deal (FTA) agreed before Christmas as creating tariff-free trade between the UK and Europe, but shippers may be liable to to pay duties and taxes if they do not comply with Rules of Origin.

UK-made goods exported to the EU are tariff-free, as they were before Brexit, but goods imported from overseas and re-exported to the EU are subject to tariffs. Simple enough, although not widely understood as part of the trade deal.

Where it begins to get complicated is where a UK factory processes raw materials from abroad and then exports the finished item. Is the item British, or a “re-export”?

It gets complicated, because the answer depends on the nature of the product, the proportion of the product that came from outside the free trade area and the specific changes made by the ‘UK processing’.

Requirements vary from product to product, which is why the rules take up 50 pages of the trade deal. Defining how much the product has to be transformed are defined precisely, so painting something or repackaging it would not qualify.

If you dry food to stop it going off that isn't enough - but if you dehydrate it to give it a distinctive flavour or texture such as with sun-dried tomatoes or raisins then that is enough.

Where it gets crazy is when goods made in the EU, can also be liable when exported back into the EU, as the head of Customs at M&S explained to Metro’s Grant Liddell.

Percy Pigs sweets - everyone’s checkout favourite - are manufactured and packaged in Germany and then shipped to the UK - no tariffs are payable because of the trade deal.

They are then taken from the M&S warehouses and exported to stores in the Republic of Ireland, which is part of the EU.

But, because they have left the EU and not been processed enough to count as being made in the UK, it may be that a tariff needs to be paid to get them back into the EU, despite them having been made in the EU in the first place.

If they had been removed form their original packaging and combined with another product, as decorating for example, there would be no tariff because they would have been transformed, but just storing them in the UK is not processing.

It is exceptional; for countries negotiating such a free trade agreement would have such closely-integrated supply chains, so Percy Pigs will not be the only anomaly.

Please see below HMRC’s template suppliers’ declaration for products having preferential origin status:

I, the undersigned, declare that the goods listed on this document….…….…..…..(1) originate in…..…..…..…..(2) and satisfy the rules of origin governing preferential trade with…..…..…..…..(3):

I declare that (4):

Cumulation applied with…………………….(name of the country/countries)

No cumulation applied

I undertake to make available to the Customs authorities any further supporting documents they require:

…..…..…..…..……….(5)

…..…..…..…..……….(6)

…..…..…..…..……….(7)

1) If only some of the goods listed on the document are concerned, they shall be clearly indicated or marked and this marking entered in the declaration as follows:

‘….. listed on this invoice and marked ….. originate in …..’

2) The UK, EU, country, group of countries or territory, from which the goods originate

3) Country, group of countries or territory concerned

4) To be completed only where goods are being exported to a country in the Pan-Euro-Med zone. Delete as appropriate

5) Place and date

6) Name and position in the company

7) Signature

While the European freight operating environment will improve over time, as the new processes are better understood and teething problems addressed, we expect this will take several months.

If you have any queries or would like any further information on our customs and documentation solutions (CuDoS) please contact Andrew White, who is leading this customs and brokerage business unit on development.

Brexit delays and confusion causing logistics delays and headaches

Jan 21, 2021 | Brexit, Road

The Channel ports may be quiet, but behind the scenes drivers are being held up for hours and even days because they lack the right documents. European carriers are suspending UK services and European located businesses have stopped serving UK markets.

The end of the Brexit transition period came into effect on the 1st January, but the FTA between the EU and UK was only agreed on the 23rd December and even with retailers and manufacturers stockpiling (in anticipation of issues in the new year) the lower traffic has not stopped fallout.

Citing problems with new border regulations and processes, a number of courier, pallet and freight carriers are not accepting UK-bound consignments and the cost of moving full truckloads from France to the UK rose significantly above the third-quarter average last week.

After the initial lull, demand for transport with Europe increased last week to 78% of the average for the time of year and there is a likelihood that rates will increase even further as a result of Brexit.

As with any new processes, the first few weeks are always going to be a sharp learning curve and the new UK/EU requirements should soon become the norm, but we are dealing with complex changes and it’s arguably simpler to send something to Ghana than it is to send something to Germany.

The new regulations add complexity and process, which increases time, resource needs and costs. And it’s not just about ensuring compliance. Our objective is to find a way to support our customers, whilst keeping their customers happy and delivering as close to the level of service standards as pre-Brexit.

We do currently have a much more complicated supply chain system for Europe than we do for going anywhere else and we will work hard to simplify processes for, and guide our customers through these complexities, so their European supply chains are protected.

Under the new rules, shipments should be pre-cleared and rules of origin will be enforced, with EU officials on the lookout for third-country products and components, which is why it is critical that all commercial invoices carry an appropriate declaration of origin in the specified format that we have advised over recent months.

The logistics and freight sector associations have long been warning of a shortage of trained staff to fill out the extra expected 500 million customs declarations that are now required each year for goods moving between Britain and the EU.

The shortfall in customs brokers is massive and has left many shippers unable to find the support they need.

EU border authorities insist that trucks arriving from Britain have been almost totally non-compliant in terms of permits and paperwork and have been sending non-compliant trucks back to the UK, yet many exporters are struggling to acquire the required transit documents, because of a shortage of agents with the authority to issue them.

Transit documents, which allow goods to enter the European Union without delay require Custom’s authorisation and a financial guarantee, to cover any taxes or duties on the goods being moved -- but they have almost all been committed and firms wanting to apply for a transit guarantee or increase the size of their existing one have struggled because of delays at HMRC.

Metro are monitoring the cross-channel situation closely and continue to submit import and export customs transactions through our CuDoS system, to keep our customers’ European supply chains optimised and moving. Our platform is getting slicker as the experience builds and the rules of trade and transport become clearer on a daily basis.

Please contact Andrew White, leading our customs and brokerage business unit, for further information.