shipping

5 top tips for importing to the UK from the USA

1. Get the tariff codes right

A tariff code is used in the UK and can also be known as a commodity code, or a Harmonized System (HS) code and is usually 6 digits long. This code is used to classify goods. It is worth noting that this code is different from the one that is used in the US, which uses the Harmonized Tariff Schedule (HTS) code. The HTS code is a variation of the UK’s HS code but is more specific.

It is the business’ legal responsibility to ensure that the correct tariff codes are used. The correct codes must be used for all exports and imports coming to the UK from anywhere abroad. All imports and exports must also be declared to HM revenue and customs (HMRC). The codes are essential in ensuring that you are paying the correct duty and for knowing whether you need an export/import license.

2. Book your shipment at least 2 weeks in advance

Currently, the UK (and the US) are experiencing major lorry driver shortages, and this has had a huge impact on the times that goods are arriving at their destinations. The US trucking industry is beginning to return to normalcy, as the country continues to adapt to the ELD mandate. However, the UK is still struggling massively, especially after Brexit. The trucking industry relies very heavily on drivers from Eastern Europe, and Brexit has caused many of these drivers to go home, cutting off the UK’s access. This has meant that arrival times of goods, and the freight industry in general in the UK, has slowed, and costs have also increased. Therefore, if you are considering importing to the UK, it would be wise to book any shipments at least 2 weeks in advance, in order to prepare for any delays.

Obtain proper legal advice before signing any contracts

It is important to make sure that you understand all laws regarding importing and exporting. This is important to understand whether you are importing/exporting from the UK or another country. There could be bureaucratic hurdles or any number of administrative issues within particular countries. Always make sure to have a lawyer that is familiar with US and UK laws check out any contractual documents before signing anything.

Know and understand shipping terms

There are many words and abbreviations within the shipping industry, and these can seem overwhelming if you’ve never heard of them before. It’s incredibly important that you understand these when importing from the USA to the UK though. A tip for this is to try and buy goods on Ex Works or FOB terms. These are the best ways of controlling your cost.

The VAT in America

Typically, importing from the USA is relatively easy. You just need to be careful that American companies do not charge you American VAT if the goods are bought in the USA for export to the UK. VAT from state to state in America can be between 5.5% and 12%. If you are importing items from the US into the UK, then the VAT will be paid in the UK.

 

If you have any questions regarding importing goods to the UK from the USA, please do not hesitate to contact us.

 

shipping

When should I order a shipment for Christmas?

Currently, there are many delays within the shipping industry. These delays are likely to affect Christmas this year as the delays, especially at ports, mean that items and goods and shipping containers are taking far longer to reach their destinations than they would usually. This could mean that some people may be in for a disappointing Christmas if the delays continue. This is why it is important to consider ordering shipping containers sooner rather than later so that you can receive your items in time for the holidays.

Delays from China

Many of your house-hold items may come from China, including most Christmas toys, many of which were probably delivered from Ningbo-Zhousan, China’s second-busiest port. Every year, the Ningbo-Zhousan port handles over 29 million 20-foot containers.

Typically, a container ship from China will take around six to eight weeks from door-to-door to arrive. There is around a 2-week delay time from China added to this.

Christmas delays

It is a well-known fact that there can be delays around Christmas time, due to an influx of orders from people trying to buy gifts. However, the Chinese also have their own holidays, which can also cause some delays around this time of year. There is a national holiday in China of one week, form October 1st to October 7th. There is also the well-known Chinese New Year holiday which typically lasts around 7 to 10 days. However, if ordering from China, it would be wise to place orders in 3 weeks before this, as the holiday can cause delays.

Price changes

The prices to ship goods from China to the United Kingdom has changed drastically since the beginning of the Covid-19 pandemic. Before the pandemic, the average price to ship a 40-foot container from China to the UK was around 2,500 USD. This price has risen by a whopping 500% since the pandemic hit, and is now on average, around 12,500 USD. So, this is a significant increase. The prices of shipping will seemingly remain high for the foreseeable future.

What happens next?

Currently, the situation is entirely unpredictable, and nobody knows what is to come in the near future. It seems that prices will remain high, and the delays will continue.

Managing Director of Easyimix, Adam Gilbourne, has said, “The higher freight prices go, the more reluctant importers are to ship containers, and so they either don’t ship, or don’t order. This means that the demand that was or still is there for these goods has not been met, meaning as more containers become available, there is even more demand for them! – It becomes an extremely dangerous self-perpetuating cycle”

The fact that freight is going ‘up’ in what’s traditionally the time rates normally drop means there will be no time for rates to relax before we hit ‘peak season’ . Combine that with the fact that the fundamental reasons that caused the container shortages in the first place are not about to be fixed anytime soon – I genuinely don’t expect to see any substantial freight decrease until post Chinese New Year 2022.

The truth is, times are challenging but importers will need to make some tough decisions. In many cases, importers need to make the decision of ‘do I stop importing and have no stock to sell? – or do I take a risk and try to pass on large price increases to the consumer?

Many importers have been waiting in hope for freight prices to drop but this currently seems like an ill-advised strategy unless you have enough stock to last your business say 12 months.”

What to do if your shipment is delayed

To avoid delays, you should think about placing your order at least 2 weeks before you usually would. This should be enough time to ensure that your shipment arrives on time. However, if your shipment is delayed, then all you have to do is remain patient and ensure that communication between yourself and the supplier is kept regular.

 

If you have any concerns about a shipment, please do not hesitate to contact us.

 

Director and EU Clearance Manager

Expansion In Store for Supreme Freight

A combination of Brexit and the Covid-19 pandemic has hit the freight industry hard. At Supreme Freight, we’ve been fortunate enough to experience a period of growth and expand our operations. There has been a huge boom in demand for goods, such as food, games, toys and other items that people so desperately want and need during this pandemic, at Supreme we’ve risen to the challenge of meeting this demand by opening a new office and growing our team.

How did the lockdown help?

During last year’s scorching summer, Supreme Freight saw a rapid rise in the sales of garden furniture, which produced a lot more business as the volume of imports handled by Supreme Freight rose.

Managing Director of Supreme Freight, Chris Green, said “A lot of our clients went online to sell and many had their best year ever. We also handle a lot of PPE equipment. In 2020, for the first time we exclusively chartered two aircraft to fly urgent products to the UK from China,”

Many services were in dire need of personal protective equipment (PPE), especially hospitals, and many other industries that were required to remain open during the pandemic. This provided people with an urgent need to have goods delivered, and this is where business began booming for Supreme Freight.

Brexit

In order to cope with the high demands that are being required of the freight industry, Supreme Freight has added around a dozen members of staff to its team of now over 50. Supreme Freight has also recently opened up a second office in Southampton to cope with the high demand.

No-one in the company expected business to boom quite so much, as “We had the first lockdown, and it was Chinese New Year, so things were quiet for us. We also had the prospect of congestion at UK ports if there were delays obtaining customs clearances,” said Chris.

While many expected Supreme to struggle with the aftermath of Brexit, it actually gave Supreme Freight an opportunity to thrive and showcase exactly what the company is made of.

Asia client base

Managing Director, Chris Green, has been keeping his eye on the clients based in Asia, as well as expanding operations in the US and EU. “Many of our Asian clients who export to the UK have contacted us for support dealing with the EU and the US,” he said. “As well as China, we are looking at Vietnam, which is a major trading partner with the US.”
Despite the challenge of not being able to meet clients face-to-face due to coronavirus, Chris Green cannot wait to get back to Asia and start handling business as usual.

A new American office

Supreme Freight will also be opening a new office based in Los Angeles, America. Chris Green has said that the location is ideal for two reasons.

“First, it’s ideal for handling shipments from China and Asia to the US. Second, an office in Los Angeles with the time difference enables us to offer 24/7 customs clearance support for clients moving goods to and from the EU to the UK” said Chris.

 

We look forward to continued growth in 2022, allowing us the opportunity to better serve the needs of our amazing clients and their customers.

 

lorry

A Greener Future for HGVs

HGV’s (or heavy goods vehicles) are an incredibly important part of the supply chain system, as they are responsible for ensuring that all goods, including essentials such as food and medicines, reach the end destination. However, HGV’s have a massive contribution to climate change. It has been reported that 16% of UK domestic transport greenhouse gas emissions were caused by HGVs in 2019.

The difficulty of reducing emissions by HGVs

It can be incredibly difficult to reduce carbon emissions of HGVs as they travel for such long distances and because of their high-power requirements. Road freight also still remains to be one of the most common modes of transport for freight industry, as it is cheap to use and very convenient when travelling shorter distances, such as in country.

Many people still rely heavily on road transport, so this makes it incredibly difficult to stop using this method.

How can we reduce emissions?

One key thing that the freight industry can do in order to reduce emissions, is make more use of other modes of transport, such as rail. Rail freight can be incredibly efficient as railroads are three to four times more fuel efficient than HGVs. Rail transport is also so environmentally friendly because the effect of greenhouse gas emissions per kilometre is 80% less. This can make a significant difference in Britain’s goal to meet its net zero commitment by 2050 if we were to utilise the rail freight option more.

Another way that we can reduce carbon emissions from heavy goods vehicles on the roads is by swapping the actual vehicle to be more economically efficient. Trials and tests have been undertaken in order to test the feasibility of battery-operated vehicles.

Grant Shapps, Transport Secretary, has said “Through our bold and ambitious transport decarbonisation plan, we’re leading the way in the transition to zero emission vehicles by becoming the first country in the world to commit to ending the sale of all new fossil-fuelled road vehicles by 2040, subject to consultation.”

Trials in the Future

There are some other trials that are being considered for the future, such as the ‘Electric Road System’ study. This study aims to supply battery-electric HGVs and HDVs with electricity from overhead catenaries. This is via a pantograph enabling trucks to charge dynamically.

 

If you would like any more information about this, please do not hesitate to contact us.

 

lorry driver

Lorry Driver Shortage: Emergency Talks

The current lorry driver shortage has impacted the whole of the UK. Shops have been going bare, shelves are empty, and goods are arriving late. Due to the ongoing shortage, the UK government have been having emergency talks with retailers across the country, as well as logistics groups, and wholesalers.

How the lorry driver shortage has impacted the population

Many civilians have been experiencing a food shortage, as food supplies are unable to reach the shelves of supermarkets and stores, due to the lorry driver shortage. The UK have been warned of facing a summer of food shortages, as a result of losing 100,000 lorry drivers due to the Covid-19 pandemic, and Brexit.

Like the early days of the Covid-19 outbreak, it is expected that the population will begin panic buying and stockpiling. This can have a very negative impact on others, especially the vulnerable as they will then not be able to purchase the things that they need, such as basic necessities like bread and toilet paper.

Why is there a shortage?

Brexit has had a detrimental impact on the cause of the lorry driver shortage in the UK, as many European lorry drivers have left the UK for mainland Europe.

The Covid-19 global pandemic has also had a huge impact on the transport industry and lorry drivers. There has been a massive backlog of tests for HGV drivers, as they were cancelled due to the pandemic. Around 30,000 HGV driving tests were cancelled last year due to the ongoing pandemic.

Tom Cornwell, of The Road Haulage Association (RHA), has said that we’re “going to see businesses that can’t survive because of the increase in the wages they’re having to pay, if they are able to get drivers at all,”

“And if they’re not, that leads to vehicles parked up and deliveries not made on time.”

The working conditions

The hours that lorry drivers are needing to work in order to cover the shortage are another reason as to why the UK is currently experiencing a lorry driver shortage. There are also a shortage of HGV stops, which means that once the driving time is over, lorry drivers have nowhere to go. Many of the few remaining stops, are filled by 6pm or 7pm, which means that the remaining lorry drivers are being turned away with nowhere to go.

Many truckers also believe that they are underpaid for the work that they are being required to carry out. On average, a lorry driver in the UK, will bring home anything between £23,000 and £35,000. When considering the long work hours, and poor conditions, lorry drivers are quitting.

There have also been talks of a strike from HGV drivers. This can have a very negative, knock-on effect to the population, as this will then mean that deliveries will arrive later, if at all. The strike has been proposed as a ‘stay-at-home’ day, encouraging workers to skip work and stay home, in response to the poor working conditions and low pay. However, the Road Haulage Association has warned against this motion, as it will have a crippling effect on an already vulnerable supply chain system.

So far, the movement has attracted over 3,000 HGV drivers. Lorry driver Mark Schubert has said “for far too many years, we have been ignored, exploited and taken for granted. Now our time has come, now we have a window of opportunity to be listened to”.

What’s being done to improve the situation?

Many companies have been offering bonuses to truck drivers, or increased salaries. John Lewis, for example, has offered an extra £5,000 to its truck drivers. Hopefully, this incentive will be enough to bring back the lorry drivers and help to create a more stable supply chain system.

If you have any questions about how we are handling the shortage, please do not hesitate to contact us.

 

burning_ship

Sri Lanka Ship Causes Environmental Disaster

A burning ship off the coast off Sri Lanka has leaked hazardous chemicals into the eco system, causing an environmental disaster. The ship in question, the X-Press Pearl, has been branded ‘the toxic ship’ by the BBC due to the devastating impact that the incident has caused.

 

Why is the Sri Lanka ship disaster so harmful?

This environmental disaster has been regarded one of the worst in Sri Lankan history, and now most of the ship has settled at the bottom of the Indian Ocean. This makes matters worse, as the ship’s cargo contained 25 tonnes of many harmful chemicals, such as methanol, nitric acid and sodium methoxide. The ship was also carrying 28 containers of raw materials that can be used to make plastic bags. These chemicals and other materials can be incredibly harmful to both humans and wildlife, and many fish and other marine animals have been found lifeless on the beaches of Sri Lanka.

The impact on marine life

The impact that this event has had on marine wildlife has been catastrophic. Fish, birds and turtles have been found on the beaches with microplastics in their systems. The plastic pellets that are used to make plastic bags are reportedly the most harmful to the marine life, as they can be fatal.

A coordinator at the Pearl Protectors, which is an organisation dedicated to protecting marine life in Sri Lanka, Muditha Katuwawala, has said that what happened here was very close to a “nuclear disaster”, thus illustrating just how devastating this disaster is. It has been reported that the country may not recover from this for years, or even decades to come.

Loss of livelihood

Fisherman have also been banned from going any closer than a 50-mile radius of the incident. This has negatively impacted their lives as their livelihood and income have disappeared almost overnight.

Fishing has been banned despite the huge clean-up operation that is underway, as well as the many law enforcement officers and firemen that have been tackling Sri Lanka’s biggest environmental disaster.

Could it have been avoided?

It is said that the fire was caused by a leak of nitric acid, a substance that the ship was carrying. This has been argued to have been caused by the nitric acid not being stored correctly, or not handled correctly. This leak was discovered at Qatar’s Hamad Port, and the ship in question, X-Press Pearl, had requested to discharge the dangerous container, but Hamad Port denied this request, claiming that it didn’t have the manpower, which is hard to believe as this port is state-of-the-art and well-resourced.

The X-Press Pearl later also requested to discharge of the leaking container at Hazira Port in Gujarat. This request was also denied due to the same reasons.

Had either one of these ports allowed the X-Press Pearl permission to unload, then this environmental disaster may never had happened.

 

Shipping Freight in Port

Yantian Port Congestion

The recent Covid-19 outbreak in Guangdong Providence in Southern China has meant that the region’s main port, Yantian is acutely congested, and this blockage could be worse than the Suez Canal blockage in March earlier this year.

Shipments have been delayed, and the fallout could take months to recover from, which means that there may be delays for Christmas. Another setback this soon after the Suez Canal blockage means that the shipping industry is in for a tough year. These affects are not just limited to the UK, the effects of the port congestion in China could have rippling effects around the world for months to come.

Yantian Port Congestion

Due the Covid-19 situation in China, many ports, including the Yantian International Container Terminal in the Shenzhen region, have been operating at a fraction of their overall capacity. Dozens of ships have already been waiting outside the terminal waiting for a berth to become available due to congestion. According to Ditlev Blicher from Maersk, the port is currently only running on a 40% capacity and that “We’re expecting that to continue for the next month with significant delays for vessels to be able to berth.”

The Yantian Port has an importance on a global scale, as the port handles 13.5m teu a year or about 36,400 teu a day. This means that any blockages in this port can have detrimental impacts on the shipping industry. The Suez Canal blockage only lasted for six days, while the delays at Yantian International Container Terminal have already lasted for several weeks, with no end in sight in the near future, meaning that this situation is significantly worse than the Suez Canal blockage.

Changing Destination Ports

Shipping line ONE (Ocean Network Express) has said that it is beginning to encourage customers to use a different destination port. “This may result in extended period of storage of inbound reefers at transhipment port or the discharge of reefer containers at an alternative port without prior notice,”

Delays

The delays in Yantian International Container Terminal can be 16 days or more now, compared to 15 days or more a day earlier. 121 sailings have omitted calls to the port or diverted to a different destination port. Project44 has said that over 32% of vessels that have been approaching Yantian have been delayed, with the situation expected to worsen over the coming weeks.

Disruption

The delays in Yantian mean that there will be an unprecedented amount of disruption to many industries, including many materials, and countries will struggle to top up on much-needed PPE. Part of the Yantian port has reopened by the Yantian port authority, but it is now only running at 45%, which is far from sufficient. Scheduling for calls to the port is going to suffer majorly for at least the next 16 days and counting. European and US ports are facing a huge challenge when the ports finally do fully reopen, as the wave of cargo hitting them, will challenge their already stretched landside operations.

Mr Hersham from The Loadstar has said that “Congestion will rise significantly, meaning that ports, and especially those already suffering such as Felixstowe, will be heavily impacted,” he said. “The scale of the issue in South China is already bigger than Suez.
“Two accurate metrics to measure disruption by are days of delay and teu; in both cases, Yantian far surpasses what happened with the Ever Given.”

If you have any questions about how these delays could affect your shipments, please do not hesitate to get in touch with us here at Supreme Freight for a discussion.

online buying

Pick and Ship: Dropshipping

Online shopping sales have increased dramatically in the last year. The January sales in 2021 on the internet alone made up over a third of retail sales in the UK. This was an increase of 81% from the year before. With the eCommerce industry at peak demand how can pick and ship and drop shipping businesses keep up with the pace?

Director of the Cigar Club, Paul Futcher, saw a 32% increase in his revenue between 2019 and 2020. Here he provides his guidance on how others can withstand growing customer demand and the higher standards that are now expected of pick and ship businesses.

The market growth in online sales in the last 12 months has risen significantly. The Increased demand has lead to Supreme Freight seeing a growing number of customers looking to import goods for resale, many of which are new to the eCommerce world.

We have seen a lot of new customers with enquiries around handling the import from drop ship and pick and ship warehouses from across the globe. Many new customers are either using services like alibababa.com or alternative drop ship and pick and ship warehouse. Initially this looks like a straightforward business model but it can be a minefield when you first enter into the import and export industry especially since leaving the EU. Supreme Freight is on hand to make sure that your air, sea & road freight are handled quickly professionally and effectively.

Below we have outlined a few pointers to look out for when you start selling products from pick and ship warehouses and drop shippers alike.

Refine your Delivery Process

With many advances in technology across the delivery process and so many eCommerce businesses needing to stay competitive, customers are coming to expect a top-notch retail experience. They expect to be kept updated from the moment they make their purchase to the product arriving on their doorstep. The quicker the company can make this process the better.

The Cigar Club considered each stage of a customer’s experience to improve how they could organise their orders and refine their pack and ship process.

Paul says: “It is important to us that our customers receive the product exactly as it is described on our website, in perfect condition and in protective packaging. We’ve tested out a variety of boxes over the years and have come to a size and shape that keeps shipping costs as low as possible without sacrificing quality or protection. We keep the line of communication between us and our customers strong, by being quick to respond to queries, and using delivery technology that updates the customers on the status of their package as well as exact delivery times.

Show Off Customer Feedback

Customer reviews are extremely important! According to Podium, 93% of consumer purchases were influenced by online reviews. There is a lot of choice when it comes to online shopping and people are looking for reassurance that they’re making the right decision before committing to the purchase.

The Cigar Club collected over 730 company reviews and 166 product reviews through using the platform ‘REVIEWS.io.’ Their efforts to ensure efficient delivery and the quality of products are up to a high standard have led to an impressive overall review rating with some of the most common phrases including ‘excellent service’, ‘efficient service’ and ‘prompt delivery.’
Once these positive reviews were collected, The Cigar Club created a widget displaying the reviews on their homepage of their website building trust with customers browsing their site. Actions like this really drive home the quality of service that customers can come to expect from your company.

Paul says: “These customer reviews have really helped us grow as a business, as with so many options for products to choose online, our positive reviews help communicate to new customers that we really do care about providing a high-quality product with efficient service. Also, by putting these reviews on our homepage we have been able to create a personal feel for those browsing our products. We’ve also tried to keep this personal touch there in all our transactions, as this is what makes our cigars unique. Particularly when online shopping is a wholly solo task, adding in real-life perspectives on our products really makes a difference.

Final Points

Implementing changes and refinements to business operations can be an intimidating task; however, by paying close attention to logistics processes and boosting online visibility, businesses can place themselves into a better position to stay competitive and successful.

sea freight

Shipping Construction Goods Worldwide

Shipping goods via sea freight internationally happens on a daily basis and enables us to obtain products from anywhere in the world with ease. You could say that shipping keeps world trade turning particularly for the construction industry.

The recent incident of the sea freight ship getting stuck in the Suez Canal may have prompted you to consider what goes into transporting construction products all over the world.

If you have ever considered setting up a shipping business of your own or extending your current business to offer this service, read on for a few things to consider.

1. What Products will you be Shipping

When creating a freight business, it is important to consider the items you will be shipping and the current demand for these them around the world. Identifying gaps in the market and establishing how your business can fill these gaps is an ideal way of establishing yourself in the shipping industry. New construction projects are started each day. The question is how is your business going to find them?

2. How will Products be Stored and Accessed

Businesses in the freight industry mostly own warehouses situated in various locations. Warehouse provide companies with storage solutions particularly when packing orders for shipping. It is important to consider the locations of your warehouses particularly when dealing with products significant in size like those of the construction industry.

3. The Legal Side to Opening a Freight Business

Once products and warehouse locations have been sorted, it’s time to focus of the legalities of your business. It is imperative that the relevant permits and licenses are acquired not to mention implementing insurance polices that will protect from potential issues and ensure that your business can trade effectively. One of the first policies to consider is contents insurance. The last thing that businesses want to consider are damage to stock resulting major losses.

4. Building a Customer Base

One of the hardest things in starting a business is increasing your retention and ensuring your customers are talking about you. Initially this can be challenging. Offering discounts and rewarding loyal customers will incentivise customers to return increasing your chances of achieving maximum profits!

How Sea Freight Works

Companies use freight companies for their extensive knowledge of importing and customs processes. Processes can be complex and mistakes are costly to fix. Having a shipping company taking the reins ensures that shipments get to their intended location as smoothly as possible.

Companies arranging a shipment to be transported usually go through the following process:

  • Find a shipping company and negotiate the price of the shipment
  • Collection of the goods from the supplier to the shipping company
  • Transferring the shipment from the port and into Customs
  • Goods are loaded into either FCL or LCL containers and loaded onto a cargo ship
  • On arrival in to the UK, the shipment is met by customs and released on receipt of duty paid
  • Delivery of the goods to their final destination.

Sea freight shipments are not hard to arrange assuming the shipping company is reputable and cost-effective. When ensuring shipments reach their final destination in good time, planning and organisation are required. Despite all of this sea freight is still the most cost-effective way of shipping goods all around the world.

What are the Advantages of Sea Freight?

There are many advantages to using sea freight to import your shipments. These include:

  • Cost – Businesses looking to import shipments significant in size and in large quantities find sea freight one of the most cost-effective ways to transport it. Sea freight has been known to be 4- 6 times cheaper than air freight. Additionally, taxes are calculated in a different way to air freight keeping the costs down in other ways.
  • The different options available with sea freight could suit a number of businesses. Sharing containers spreads the cost between companies.
  • Sea freight importing does not have as many restrictions of what companies can import, in terms of size and amount as other methods do. Bigger items such as furniture or vehicles isn’t going to be so much of a problem by sea as it would by air.
  • Sea freight is pretty much accessible from anywhere in the world.
  • Sea freight importing is much better for the environment than other methods.
Brexit logistics

How will Brexit Impact Logistics Companies?

With Britain’s exit from the EU single market and customs union a matter of days away and no trade agreement still in place, there are a number of steps that logistics companies should be taking to prepare.

Brexit is set to make a high impact on the sector, due to the amount of cross-border travel involved. The most troublesome Brexit issues relevant to the industry are delays at ports, mandatory border checks and ability to process the required paperwork. These issues are being tackled alongside increased costs to keep up with technical innovation and increased customer satisfaction demands. The only way for logistics companies to stay ahead are to prepare for changes and the ability to adapt quickly to changing legislation.

 

What Does Brexit mean for Business?

As the 31st December approaches, UK businesses are increasingly anxious about their prospects with many losing faith about their future. Many businesses have taken to stock piling essential goods to ensure they are not reliant on orders arriving within a certain time period. In light of this, freight forwarders are bracing themselves for a negative impact on trade between the UK and the EU that will undoubtedly affect them from a customs, bureaucratic and economic standpoint, providing the UK goes ahead with a no-deal withdrawal. Without a deal, Brexit will severely impact the movement of freight in and out of the UK whether it be via road, sea, air or rail. Here’s how it is likely to impact each mode of transport:

 

Road

Once the UK exits from the freedom of movement agreement with the EU; UK registered vehicles will be required to apply for international driving permits. The European Conference of Ministers for Transport (ECMT) permits are required for laden and unladen journeys through EU and EEA countries. If the UK cannot negotiate a deal with the EU, an ECMT permit will be required for every journey made. These permits are issued on a limited basis which will severely impact the frequency that UK hauliers are able to cross the border. EU drivers will continue to be allowed to drive in the UK on their licences; however, this is only for a temporary period.

 

Air

UK carriers will see their cargo services between EU and third countries capped at 2018 flight frequency levels which will restrict a company’s ability to opt for air travel to transport their shipments to avoid delays at sea ports. As well as this, UK carriers will also be unable to transport goods between two third countries and stop in an EU country or fly between two EU states severely restricting routes and the efficiency of their operation.

 

Sea

UK companies that are dependent on shipping routes between the UK and EU are likely to face issues with cabotage if no deal is struck between the two unions. For the UK to transport goods to a port within the EU, that individual state will need to extend their cabotage rights to the UK. So far, this is possible in Ireland, Belgium, The Netherlands and Denmark. Without a deal an individual agreement with each EU member state will need to be struck before routes can be resumed causing significant restrictions for UK sea freight companies and imposing on their efficiency.

 

Shipping companies carrying passengers and trucks, from the UK to the EU will be required to submit additional security information to the port before entering. This additional information will likely be required to be submitted before travel and by the people using the services so that the shipping company are able to comply with procedures. This requirement can be waived between EU countries but not for non-EU countries attempting to enter an EU country. Ensuring that shipping companies adhere to this new procedure will require extra training and a requirement to notify their clients that additional information will be required. All of this will require time and money at the shipping company’s expense and could potentially lead to reduced loads.

 

Delays at the Border

The UK government have estimated a 6-month disruption period at the UK border, with the worse period being the first 3 months. This has been put down to: additional time needed to conduct extra checks and not having the required space at present to do this, the prediction that drivers will not have the required licences and permits and the assumption that inexperienced traders will not have the correct paperwork.  The government have announced a transitional period where the new procedures will be simplified to mitigate delays; however, this has not been reciprocated by the EU and drivers could face delays when entering an EU member state.

In order to minimise their delay at the UK, it is being recommended that logistics companies familiarise themselves with the documents that they will be required to complete and the paperwork that will need to accompany the shipment. Recipients of goods shipped across a border should expect a duty payment to be made. Failure to do this before the shipment crosses the border could incur fines and the goods being seized until the necessary fees are paid. Customs fees and paperwork should be prepared in advance will save businesses extra money and time; both of which will be critical moving forward.