How are Yusen Logistics preparing for the Brexit transition?
Business Leader recently spoke to Logistics & Compliance Manager at Yusen Logistics (UK) Ltd, Sharon Murrell, about how the firm is dealing with the Brexit transition ahead of the January 2021 deadline.
Can you tell readers about Yusen Logistics?
Yusen Logistics are a customer-centric logistics partner to global business delivering an extended integrated range of global and local services from International Freight Forwarding and Contract Logistics to End 2 End Global Supply Chain Solutions.
We invest in a deep understanding of our customers’ business, and most importantly their customers to enable a clear understanding of the challenges they face and the goals they want to achieve. With 24,000 employees covering 45 countries and regions and over 550 locations, we are connecting people, businesses and communities to a better future every day.
In short, we create better connections for the future of business.
How has your business been affected by Brexit and the protracted negotiations?
When it was announced that the UK would be leaving the EU, Yusen Logistics created a dedicated Brexit team with key personnel from each Operating Division, which provides regular updates to the business. We also held several Customer Councils at our Milton Keynes Training facilities and invited external speakers such as the Freight Transport Association and our European Opco’s to present updates. We provide our customers with regular updates on Brexit and the time lines, with possible outcomes depending on what the Government has agreed with Europe.
The protracted negotiations have delivered a level of uncertainty, resulting in contingency planning such as an increase in inventory levels, which will deliver a degree of protection against the as yet unknown duty changes and possible increases in transit times.
Can you talk about the Brexit transition period and what it means for the logistics sector?
The Logistics sector has a vital role to play with the of movement of goods and physical storage. The requirement for temporary storage space is increasing as companies build inventory within the UK in readiness for Brexit. Many companies are seeking to mitigate potential duty charges from the 1st January 2021 if there is no trade deal with Europe. Currently the supply chain for goods to and from Europe is barrier free, however, once the transition period ends, there will be a requirement for Customs formalities, which could potentially add to transit times for the movement of goods and increase costs, from additional documentation to potential duties.
We are working with our customers to ensure that we have the correct processes in place for their products both into and out of Europe in order to mitigate potential and expected changes in transit times.
Clear guidance is required from the UK Government and its agencies as to how the flow of goods arriving into and out of the UK will work. The current release of the Border Operating Model is a start but there are still a lot of questions to be answered and with regular meetings with HMRC and its agencies, we are sure this will become clearer.
What do you see as the opportunities and challenges of the UK exiting the EU?
Opportunities for the UK exiting the EU is that the UK can set its own tariff arrangements and trade deals, potentially being more agile in international trade. The supply chain itself is likely to be challenging with the potential for port congestion. However, this said, as we adapt to new ways of working, there is the potential for innovation in the current processes.
A short message to your customers and businesses during this period?
If not already commenced, start preparing by reviewing Incoterms to ensure you know who is responsible for what in the supply chain of the goods. Understand what the impact is on your cost base. Review the UK Global tariff, not only for goods coming in from EU but also the ROW. Also taking note of the flow of goods across the Irish Sea.
We are ready to help you through this transition and beyond, having invested in and creating a dedicated team to deal with European Customs processes. Yusen Logistics (UK) feel well placed to support and guide our customers through the procedures, challenges and opportunities that Brexit brings.