UK fashion houses hit out at post-Brexit 'hidden costs' for EU customers
UK fashion labels are increasingly concerned at the complexities of operating in the post-Brexit world, ...
With so little time to prepare, the UK was plunged into chaos following the conclusion of the EU-UK Trade and Cooperation Agreement on Christmas Eve 2020.
This was despite careful preparation by operators like us, Diamond Logistics, ready for both a no deal and a trade deal exit.
With just one week’s notice of what the new trading conditions would be, it was inevitable that the challenges would be numerous.
Despite organising Economic Operators Registration and Identification numbers (EORI) for our 1,000 clients early last year, we have found that carriers are processing them differently, which is leading to system errors.
Delivering to Ireland is proving challenging because to operate in accordance with the new Northern Ireland protocol, operators need an Irish specific EORI number – called an XI number.
However, due to the HMRC site repeatedly crashing – something we experienced over 20 times this week alone – it has been difficult to attain this. Whilst this doesn’t officially come into play until April, there has already been temporary suspension of services across some carriers.
There have been service suspensions without notice, and we’re also seeing that international clients – especially from China – only just starting to understand the customs rules (in regards to VAT) and withdrawing goods which require fulfilment from the UK and moving them to the EU.
Most problems stem from the EORI number – which requires the addition of two numbers at the end of a standard VAT number – because (allegedly) the EU thinks it’s too short.
If traders were able to use the EORI number, these problems would not have occurred.
The impact on our clients and their EU customers is catastrophic. Put it this way, EU international deliveries represented 9.9% of our revenue in the weeks before Christmas – and now it’s a mere 1.6%.
Here are the key reasons problems are occurring:
How to alleviate the challenges
It’s worth remembering that the UK has traded in this fashion with the rest of the world since ‘day dot’. I think the EU has made it challenging, but any good logistics provider should be able to guide clients through this difficult phase.
The is a guest post by Kate Lester, founder and chief executive of Diamond Logistics