Freight News, Logistics, Business, Forwarding

Get real over Brexit, urges CH Robinson

[ December 4, 2020   //   ]

CH Robinson Europe director Chris Mills is urging UK manufacturers to prepare for “the new reality” when the Brexit transition period comes to an end.

Mills, who is director of account management, transportation, says: “Not all UK businesses are prepared for the changes the end to the transition period will bring to their customs procedures and may still wonder what it could mean for their own shipping processes. A major reason for some companies’ lack of preparedness could be attributed to Covid-19 with the pandemic demanding so much business attention that it has left little time for planning for next year.”

UK firms that export to the EU will need an Economic Operators Registration and Identification (EORI) number to move goods between Great Britain and the EU. It can take up to one week to obtain one, so companies need to apply now.

When the UK becomes a ‘third country’ when the transition period ends, customs declarations will need to be submitted and duties paid. “Failure to comply may lead to shipments being delayed or blocked,” he adds.

They should immediately familiarise themselves with Incoterms.

With the no longer part of the EU VAT scheme, VAT will need to be paid in the UK when importing from the EU, although the final arrangements are dependent on the outcome of the negotiations.  Whilst UK businesses will no longer have to collect any VAT on products sold to EU customers, VAT will be levied on imports of goods from the EU.

Mills added: “When it comes to custom and shipping costs, it’s likely new customs charges and other fees could be introduced when trading between the UK and EU. If costs are passed onto EU customers, it’s important they know in advance. If they’re charged without prior warning, they can refuse to accept the goods. Businesses will then be obliged to cover customs and returns costs. These are all costs companies need to be upfront about with their customers.”

Queues at ports, airports and rail terminals are likely and clearance times are likely to increase for outbound vehicles.

Mills warns: “Under current EU law, citizens have the right to return a product within 14 days. This will no longer be mandatory next year for shipments outside the EU. Firms will need a solid strategy, so that all parties are aware of terms and conditions and of any costs that may be incurred, as offering returns won’t be as easy as they have previously been. Having such a strategy in place is very important, especially for the retail industry, since how a retailer handles the returns process influences customers’ perception of their brand.”

He concludes: “Brexit is complex and making preparations can seem overwhelming, but businesses need to plan now so they’re prepared, whatever the outcome, in January 2021.”