As early as the summer of 2016, the British people made the decision to leave the EU in the form of a referendum. This was a long time coming, because the British wanted to be independent from the European Union, but evidently did not want to accept all of the consequences of leaving. However, no one on the EU side wanted a no-deal Brexit – trade relations should remain intact despite everything. A hasty agreement was reached at the last minute at Christmas of last year. The new regulations regarding the movement of goods have been in effect since the beginning of 2021. But there are a lot of ambiguities in the room – still.
Extreme congestion in the English county of Kent is standard for truck drivers on an England route. Many are now returning to mainland Europe with empty trailers. Firms are willing to pay the price of empty trucks because it’s cheaper than being stuck in a truck parking lot for four or five days. The British economy likes it less.
“Every day new practical detailed problems arise, be it technical deficiencies in company or government IT, lack of or contradicting communication, especially from the British authorities, or the aforementioned knowledge deficits of some companies in the supply chain,” says Niels Beuck, managing director and head of European affairs at the DSLV Bundesverband Spedition und Logistik eV “It is often misunderstood that goods in traffic between the EU and UK are only duty-free if they are EU or UK origin goods and this is proven by so-called preference certificates,” adds Beuck.
The problem with this is that these preferential rules of origin are extremely complex, both legally and materially. “Put simply, the majority of the raw materials contained or processed in an end product must come from the territory of the EU or the United Kingdom so that there are no customs duties,” explains Beuck. However, this is hardly the case in the automotive or textile industries. A lack of recognition of veterinary certificates and the treatment of packaging material will also cause problems in practice for the foreseeable future. Logistics associations such as the DSLV seek contact with British, German and European authorities so that these hurdles can be removed quickly and unbureaucratically.
© Gina Sanders – stock.adobe.comEven if there are mostly no customs duties, customs declarations still have to be submitted. Import sales tax is payable on goods from the United Kingdom, with the exception of Northern Ireland.
When asked whether the freight forwarders had prepared themselves well for Brexit, Beuck replied: “According to our experience so far, too many companies in the shipping industry and also smaller transport companies that have so far acted alone in the EU internal market are assuming wrong conditions and are therefore not prepared accordingly. Although they have been in force for trade with third countries for years, the customs clearance and documentation requirements that have to be implemented since the beginning of the year overwhelm these companies. It is high time they dealt with the new customs formalities for EU-UK traffic and systems.
© Siwakorn – stock.adobe.comTo make matters worse, companies would have to deal with the various national customs IT systems, and in particular with the new “Border Operating Model” in the United Kingdom. “Trading companies that export or import goods to or from the UK have to develop their own skills or commission service providers such as forwarding agents or customs agents. In any case, new documentation obligations have to be met,” says Beuck. “Now it is important to sift through the numerous details of the almost 1,500-page agreement and put them into practice. Despite all the imponderables, one thing is certain: Brexit will keep us and our member companies busy for a long time.
Alexander Heine, Managing Director of the CM Logistik Gruppe, has summarized three expert tips for you:
For years, Great Britain, like the rest of the member states, benefited from the free movement of goods within the customs union. In principle, imports and exports within the EU, so-called intra-community shipments, are not subject to any restrictions. This freedom is now no longer applicable and all goods that logistics companies import from a non-EU country must be cleared through customs. With a container T-shirt from China, for example, there is no problem because it only contains one good, albeit in hundreds of copies. But a British truckload for an Irish supermarket branch – that is, in the legal area of the European Union – typically contains all the goods this branch needs, from eggs to toilet paper to fruit.
A customs and import declaration for the EU required after the withdrawal stipulates that all different types of goods in a load must be listed individually and checked accordingly. Additional administrative effort that every logistics company with trips to the United Kingdom should be prepared for. Rethinking loading could turn out to be a way of avoiding these long waiting times by letting companies load their trucks with only one type of goods. Each person concerned has to calculate individually whether the additional kilometers that result compared to paperwork and waiting time are worthwhile.
It is not just the goods controls that cause complications at the new EU external borders. Whole catalogs of guidelines for the transfer of freight, which member states of the customs union had been spared for years, now come to logisticians with ties to Great Britain. This leads to a considerable bureaucratic burden both for the logistics industry and for the customs officers on both sides. Incorrectly completed or missing papers can cause delays in the transfer and caused chaos for deliveries between the island states – trucks had to turn back because they could not produce the required forms.
These organizational teething troubles were difficult to prevent due to the unclear political situation. In order to avoid delays and general confusion, logisticians can only find out about all innovations regularly and thoroughly. Not an easy undertaking, as the situation at the borders and thus the individual handling processes seem to change daily. Affected companies only receive really reliable and, above all, up-to-date information from official bodies – the responsible customs authorities.
The financial burdens for logistics companies are not only increasing due to rising personnel costs, resulting from the additional bureaucratic effort and waiting times at EU borders. Even the tariff exemption, which is actually enshrined in the trade agreement and publicly touted as a great success, only turns out to be a good deal at first glance. The decree agreed with the EU does not apply to goods that are imported and then immediately exported again. Great Britain runs the risk of losing the position it has built up over the years as the linchpin of European domestic trade, which can lead to fewer orders for logisticians who depend on cooperation partners from the island.
Alternative routes and additional intra-European business relationships can act as a fall net and ensure ongoing operations in the event of a long-term misery at British borders. It is difficult to make predictions for the future – all parties have to adapt to the new regulations and adapt their processes. How big the additional costs and financial losses ultimately turn out to be for logistics companies depends on how quickly they adapt the situation. ”
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