This article is by Martin Meacock and Pol Sweeney from Descartes
With only a matter of weeks until the final Brexit deadline, there still remains uncertainty as to whether there will be a ‘deal’ or ‘no-deal’ come 1st January. The Prime Minister may have declared that trade talks are over, but background negotiations are still ongoing as both sides of the debate ideally want an agreement.
But whether we leave the EU with or without a deal, there are elements of the transition which are already certain. Customs declarations and security filings, for example, will be mandatory for all goods imported and exported into and from the UK.
If there is a trade deal, the detail of those customs declarations in terms of the duties and charges associated may change, but fundamentally from the 1st January customs declarations and security fillings will be required, so it’s imperative organisations address this within their businesses today. Especially with eCommerce booming as a result of the pandemic, it could mean that smaller businesses may be caught out if they don’t deploy processes and solutions to support trade at the end of the transition period and the inevitable changes to business that will follow.
While a trade deal doesn’t change the practical situation as such, the lack of a free trade agreement could mean higher taxes on imported goods, putting pressure on areas such as customs warehousing and procedures where the duty is deferred when you know the goods are coming in.
For those businesses that haven’t yet taken action with regards to Brexit preparedness, there are a number of considerations that must be factored in. Are you moving goods from EU countries into the UK? Are you exporting to the EU or to Northern Ireland? If so, you will need to ensure that customs declarations are filed in a timely and compliant manner – Brexit will create a 545% increase in customs declarations.
You also need to think about whose responsibility is it within your trading relationships to submit those declarations? It could be you or the supplier, but identification is key to ensure that the right steps are taken to comply with regulatory requirements. Businesses can decide to complete declarations in house, but the complexity involved could be overwhelming for those unfamiliar with customs processes.
Alternatively, an intermediary such as a customs broker or freight forwarder can be used that will handle the process for them. However, as time is running out ahead of the Brexit deadline, this is becoming increasingly difficult, some large brokers have already taken on so much new business in recent months.
Time is of the essence
Whether in-house or broker, both will need to address the requirement for the sheer volume of import and export declarations, as well as security filings, via a streamlined solution that will digitise their data, with the ability to keep detailed records and submit electronic declarations to the appropriate authorities. System integration is key; traders, brokers, port systems for haulage and carriers – all of them must work together to make the process as simple as possible.
Combining a Software as a Service (SaaS) customs solution that ensures all regulatory changes are automatically updated and available, with staff training to achieve in-house expertise, will deliver a smooth transition into Brexit and provides a strong foundation for current and future business development.
This technology can also incorporate the required security filings, helping carriers and logistics intermediaries manage Import Control System (ICS) compliance by providing a single point of access. Moreover, a digital solution also enables carriers to connect with brokers, shippers and regulatory authorities around the world, without having to worry about data formats or specific state requirements.
Combining customs and security filing software solutions with fleet optimisation and compliance management solutions will achieve even greater efficiency. Route optimisation can be achieved through solutions that incorporate intelligent algorithms and which can also deliver real-time vehicle location through GPS tracking – essential for businesses that need to meet growing customer expectations and thwart anticipated Brexit-induced supply chain delays.
Once the transition period ends, there will be an increasing need for supply chains to be digitally connected. Being able to combine the physical movement of goods with the transfer of electronic data that supports the journey along the supply chain will be more important than ever and critical for business as we head into and beyond 2021. Any delay in putting in place Brexit-ready systems and processes could disrupt firms’ logistics operations and supply chain, ultimately impacting on customer service and their bottom line. The time to act is now.