Brexit has resulted in a 'significant decline' in trade flows with the EU
Brexit has caused UK-EU trade flows to fall by 16%, while EU-UK trade has dropped ...
While Brexit has taken something of a backseat over recent months to the impact of Covid-19, it is now as clear as it can be that, from 1 January, customs declarations will apply to all UK imports from the EU, causing delays to already busy ports and stretched supply chains.
For those industries that rely on just-in-time (JIT) distribution, such as pharmaceutical, perishable goods, manufacturing, spare parts and low-value high-volume e-commerce, it’s imperative to get goods through customs clearance without delays and file the required declarations with ease.
However, instead of completing declarations at the border and adding delays to what is an already busy and chaotic environment – what if there was a way to complete customs declarations inland at your own facility?
Moving the border inland
With an ETSF (external temporary storage facility) located at your own business’s site, away from the port, the entire customs process could be significantly accelerated. Your goods arriving into the UK can be taken to your site (a business’ premises or distribution centre, for example), where the customs formalities can be managed electronically.
The customs border is effectively moved to your own premises, so customs declarations can be pre-lodged ahead of the goods arriving. This enables the site to operate from a HMRC and Border Force perspective, as if it were the Customs frontier so long as it is running an approved ETSF solution.
A haulage or courier company with perhaps 1,000 different consignments on one truck doesn’t want to have to fill out that number of declarations in the short period of time from leaving Europe and arriving at a UK port. With an ETSF, they can create more time and stay ahead of the game by filling out the declarations at the end destination in advance, and therefore not delay the physical movement of the goods with queues, inspections and processing at the border.
Another solution which can augment the ETSF setup is having an inventory system that is designed to group goods at truck level, instead of typical systems today that are designed for flight or vessel-based arrival. With a truck-based system, once a vehicle physically arrives at your site, it triggers the clearance of all consignments so they can be unloaded and handled.
An ETSF also gives electronic visibility and audit records to HMRC and Border Force, so if they do want to put a hold on any consignment, the site operator knows immediately which goods are on hold awaiting paperwork or physical inspection – this can also be conducted at the operator’s site.
Taking back control
Ports such as Dover are busy enough at this time, add the need for additional complex clearance processes after the Brexit transition period ends, then trucks that need to travel through those bottlenecks are likely to face huge delays.
Any clearances that can be moved inland will benefit supply chains greatly, especially those looking to quickly clear and distribute or sell products on.
Many organisations operate with JIT arrival of parts on trucks. Having the uncertainty of delays at the border will have a big impact on their ability to do this, increasing costs and revenue loss.
There will still be certain product categories that will require clearance checks at the border for safety reasons, such as meat and dairy products. But, moving as many clearance checks as possible inland not only speeds up the process for those vehicles that can go straight to the ETSF, but also unlocks efficiencies for those that will still have to complete clearances at the border. A win-win for those companies that transport different items across multiple categories.
Currently, there are a huge number of businesses that import from the EU and don’t have to worry about customs clearances, but once the transition period is over, they will be faced with significant changes. The sheer volume of products crossing the border that will be hit with delays due to newly imposed procedures and paperwork will create significant knock-on challenges and potential costs for the wider supply chain.
Businesses therefore need to take back control of their own clearances and create efficiencies where they can ahead of time, so that once the transition period ends, they will be in an optimum position to maintain business continuity and control cost.
Don’t get caught out
With time counting down to the end of the Brexit transition period, businesses are doing what they can to prepare for 31 December 2020.
Like many processes, setting up an ETSF requires applications and approvals which can take time. Any warehouse keeper that is approved for customs warehousing, which could be virtually any importer, can apply to have premises approved as an ETSF. Premises would need to be checked and approved, inspection areas setup and an inventory provider nominated.
But this won’t be such a challenge for those that prepare now and work with a provider that can support the setup process in line with the inventory system that connects straight to HMRC. Using an ETSF has been a well-established solution for many years, but the changes coming into place as a result of Brexit will mean that it is now more applicable and necessary for a large majority of businesses.
This is guest post by Pol Sweeney, vice president sales and UK country manager at Descartes