The lull before the storm ends – European Overland and Customs Update Week 2

While reports of free-flowing freight traffic at Dover may suggest everything is hunky-dory in the nation’s supply chain, after the end of transition, the reality is that there are problems, delays and disruption, it’s just taking place elsewhere and disruption is imminent. 

Dover’s quiet, not because post-transition processes work, but because just a fraction of the normal freight movements have been transiting and it is anticipated that volumes will start to increase from this week as business’ replenish depleted stock levels. 

Even in this ‘quiet’ period we have witnessed significant teething problems, which will get worse, before they improve over the coming months. 

Ashford, the closest inland border facility to Dover, is already experiencing delays of five hours to print documentation and our brokerage team are spending hours processing movements, that should take a fraction of that time, because so much critical information is missing or incomplete.

There are a lot of changes post-transition, and many of the problems we detail below, may seem complex, which is why we would urge shippers to contact us for guidance and to notify us at the earliest opportunity of import and export movements (per point 7) via our CuDoS portal.

Most businesses and many hauliers remain uncertain about requirements and processes for inbound and outbound cargo, which we are seeing manifested in six key areas.

1. HAULAGE: Drivers are a critical component in European supply chains and their ignorance of the new UK/EU processes is particularly pronounced at the moment. It will dissipate over time, as they become more familiar with the new requirements, but right now we are seeing import trailers moving directly to destination, because the right procedures are not being followed. 

2. TAD: The Transit Accompanying Document (TAD) expedites transport across European borders and accompanies uncleared goods during their journey from one authorised location to another. 

But some drivers are not collecting these critical transit documents, failing to get them scanned/stamped en-route and often failing to discharge them on arrival, which potentially leaves the shipper (guarantor) liable to tax penalties. 

There is also a lot of confusion surrounding the important LRN (local reference number) that needs to be quoted by the driver at the nominated UK customs point to receive their TAD. Too many drivers are turning up without the correct LRN, creating a situation that can  take hours or days to resolve, as illustrated by the current five hour queue at Ashford’s Inland Border Facility for TAD’s. In a further complication we are also aware that there are incidences when the incorrect TAD’s are issued, even when officials have been provided with the correct LRN.

Critical information in the production of a TAD is the vehicle/trailer number and nationality and the customs office of destination as advised by the consignee.

3. GUARANTEES: The Common Transit Convention (CTC) allows importers to make customs declarations and pay import taxes and duties, when goods travelling under TAD arrive at their final destination in the EU (or UK). 

Traders exporting goods under transit need to provide a guarantee to cover any potential customs duties and import VAT. Businesses using transit should apply to be authorised to use Customs Comprehensive Guarantee (CCG) and once approved, obtain a guarantee from a bank or financial institution. 

4. DUTY: A recurring issue that is impacting traffic in both direction is providing a declaration of origin for the goods. All goods with a UK or EU origin require a declaration of origin included on the commercial invoice to benefit from preferential tariff rates. Failure to provide this origin declaration means that the importer is liable for duty at the prevailing rate. It is not widely understood but all non-EU or UK origin or majority assembled goods are liable for full duty rates both in The EU and UK regardless if duty has already been paid in The BLOC or UK previously. This will lead to the doubling of duty rates potentially.

5. VAT: The existing rules for imports from non-EU countries now apply to imports from the EU, but with ‘postponed accounting’ for import VAT on goods brought into the UK with effect from 1 January 2021. For exports UK businesses continue to zero-rate sales and EU member states will treat goods from the UK as goods entering from other non-EU countries, which means import VAT and any customs duties (tariffs) are due when the goods arrive in the EU. 

British and EU exporters must register to pay VAT in their respective territories, which has prompted a number of companies to halt their cross-border trade, until the processes are clearly defined and understood.

6. CUSTOMS: Inbound processes at Ro/Ro ports like Dover and Eurotunnel are designed to expedite movement (not inventory linked), which means there is limited control over arrivals, who are usually free to leave the port, without any oversight, and is the reason why our head office staff have arrived to find a European trailer in the car park on more than one occasion.

The primary problem in the UK, is that import clearance is not being effected or documents discharged, while trailers are arriving at destination, that have had no prior notification. This is because UK facing EU ports are not insisting on an import movement reference number (MRN) prior to shipment.

7. DATA: The accuracy and timeliness of information sharing is paramount. It will do more than anything to resolve the issues outlined above and ensure smooth process flows. If we are acting in a pure brokerage capacity without carriage then we must have all documentation and data in advance of movement – without this we have no transparency and we are unable to prepare and present the correct submissions for either import or export customs formalities. Metro, as is the industry as a whole, are being presented with huge challenges from insufficient paperwork – if you need clarification please contact the customs team for clarification.

It is apparent that many importers and exporters are still evolving their processes and are only now beginning to understand the need for information in advance of dispatch or arrival. 

In every case, regardless of import or export, we need:

• EORI Numbers
• Commercial invoice, incorporating an origin declaration, values and description of goods
• Packing lists/CMR with gross and nett weights
• Incoterms
• Commodity codes (which must be 10 digits)
• Supplementary quantities must be advised

Although the operating environment will improve as the processes are better understood and teething problems addressed, we suspect this will not be for some months and the landscape has changed permanently compared to the last few decades of trade with mainland Europe. Please assist us to assist you and provide the above information.

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 business unit on development.