Brexit: Time’s almost up
While politicians continue to try and find a way out of the Brexit crisis, the leaving date draws inexorably closer. Now it’s up to companies to systematically plan and prepare for all eventualities. One major issue: customs.
March 29, 2019, 11 p.m. in Dover, England. It could be a Friday night like any other. Or it could mark a profound watershed in the port’s history. Like a well-oiled machine, the UK’s most important ro-ro port currently receives up to 10,000 trucks per day from Calais and Dunkirk and sends them on to destinations all over the country. In the case of a hard Brexit, this machine could come to a spluttering halt. Overnight.
This is because there would have to be border checks for all arriving trucks, and it would be the ports of Dover and Calais—as well as the Eurotunnel, through which 1.6 million trucks pass every year—that would be most affected. Alternative connections to this bottleneck are virtually non-existent. It seems there’s no getting around traffic jams and massive waits.
Time to act
The business world is watching with bated breath to see what will happen with the long-negotiated exit deal between the UK and the EU. Which of the demands issued by the UK House of Commons can still be met at such short notice? And will there be enough support on both sides to alter the agreement?
The situation seems more complicated than ever, but ‘wait and see’ is no longer a viable option. “We recommend that our customers prepare for a potentially hard Brexit,” says Wolfgang Reinel, Managing Director European Logistics North Central Europe at DACHSER. Should the UK leave the EU on March 29 without a deal, there’ll be no getting around long waits caused by border controls. Companies sending and receiving shipments from the UK should therefore take a close look at their logistics chains and make sure they have an overview of volume development. They should consolidate shipments where possible and check the build-up of safety stocks in order to ride out possible waiting periods.
Should there be a hard Brexit, delays crossing the border would be one major challenge; the other would be the new bureaucratic hurdles for goods transport involving the UK. A hard Brexit would mean, by default, customs procedures according to WTO regulations. In particular, senders that do not yet have any experience in imports/exports with non-EU countries should prepare themselves early on to ensure their goods are ready to cross the border after the end of March. Without the necessary documents, delays will only increase.
This is because current plans have Dover and Calais insisting on prior customs registration in order to make border crossings as smooth as possible. In Calais, one option for exporting goods from the EU to the UK would be to link the pre-established export procedure or shipment process to the transporting truck license plate and, if possible, to allocate a collective Movement Reference Number (MRN). As soon as the vehicle is at the terminal and boards the ferry or enters the Eurotunnel, it would be approved for exit once it reaches the other side of the channel, in a largely automated process. Controls at the customs terminal would no longer be necessary, save for spot checks. A similar system would be possible for imports. Even the UK plans to limit controls at ports of entry and the Eurotunnel will limit spot checks. This would also involve the provision of pre-issued customs registration to avoid long waits at ports of entry.
“DACHSER can provide its customers with support in many ways when it comes to customs. That being said, here we’re dependent on close cooperation,” explains Vinzenz Hingerl, Department Head Customs at DACHSER. The basic condition for customs registration, in both the UK and the EU, are EORI (Economic Operators’ Registration and Identification) numbers as well as correct product classifications for the goods being transported. These are joined by customs-related commercial documents or commercial invoices. “These can all be prepared well in advance,” Hingerl continues. “It’s also important to agree with trade partners on the Incoterms that will apply in the future. This will help avoid processing delays ahead of time. The Incoterms define who commissions customs clearance as well as who assumes the costs for dispatch and for import duties.” In addition, details have already been released on the UK Trade Tariff that would come into effect following a hard Brexit. This allows the calculation of future customs duties in the run-up to the deadline. Contacts at the DACHSER branches provide support on customs with checklists and individual consultations so that we can all act with maximum efficiency should the worst-case scenario become reality. Customers with transports going to and from the UK should get in touch now. At present, shipments to and from Ireland are generally transported through the UK, so for this, too, we recommend getting in touch with your DACHSER contact.
Over the past few months, DACHSER has made intensive preparations for the UK leaving the EU. When it comes to customs clearance, customers can draw on expertise and resources from the logistics provider’s network. At the same time, DACHSER is investing in personnel, training, and adjustments to its IT infrastructure. Further measures designed to cushion the potential fallout of a hard Brexit address transport planning as well as additional terminals and storage areas.
“Uncertainties are part and parcel of the logistics business,” says Reinel. “Brexit is a challenge and DACHSER is ready to meet it. The UK is and will remain an important part of DACHSER’s European network. We are posting continuous growth there, and despite the disruptions that Brexit could cause, we expect that this positive trend will continue for our UK country organization.”