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“When it comes to Brexit, many companies have their head in the sand”

The Brexit is complete and the transition phase will be history in a few weeks. No matter what agreements the EU and Great Britain may reach in the short term, January 1, 2021 will mean a deep cut for the movement of goods to and from Great Britain. Steffen Wiese, Head of Sales, European Logistics, North Central Europe at DACHSER, explains what companies urgently need to bear in mind and some even run the risk of oversleeping the preparations.

Would you say it’s still possible to avoid a hard, no-deal Brexit? How would a hard Brexit affect goods transport involving the UK?

There’s still a chance that a deal could be agreed. But the closer we get to the deadline, the less hope there is. DACHSER is definitely readying itself and its customers for a hard Brexit to ensure we’re prepared for all eventualities.

Post-Brexit customs clearance will make transporting goods vastly more complicated, expensive, and time-consuming. We expect a hard Brexit to majorly disrupt transports, especially at the beginning of next year. We’re noticing that some companies have already taken action and have moved operations to locations with the EU. In light of new customs clearance procedures, some business models are no longer very practical and will have to be revised. B2C shipments will become more expensive, even if simpler procedures are introduced for goods of up to a certain value. It just won’t be worth it for many senders. Since shipping times and costs for supplying the European market from the UK will also increase, many senders have already moved their distribution centers to the EU.

Are companies, including DACHSER customers, in Germany and the rest of Europe prepared? Where do you see room for improvement?

In addition to the well prepared companies, there are also quite a few that still need to take urgent action. They’ve waited too long, which will lead to problems—at the latest starting January 1. This holds especially true for companies that have up to now exclusively served the European domestic market, as they often lack the requisite customs expertise.

Many companies actually expect that a deal will mean everything remains as it is. What’s more, the Covid-19 pandemic has largely eclipsed Brexit as a topic in the public eye as well as at many companies.

But it’s important to know that no matter what happens on the political stage over the coming days and weeks, customs clearance will definitely be a hot topic among senders and recipients of goods transported between the EU and the UK. This means that preparation is non-negotiable.

A more general question: What must a company intending to export goods to or import them from the UK as of January 1, 2021 take into account?

Senders first have to check the extent to which their supply chains are affected. Special attention must be paid to preparing the information and documents required for customs clearance so that we, in our role as logistics provider, can take care of the customs formalities relating to imports and exports. This information includes the EORI number. Moreover, obtaining customs authorization from the respective importer is essential for processing shipments to and from the UK. For this reason, we are asking our customers to notify their recipients that they must provide us with the importer’s name so we can request the necessary authorization.

DACHSER itself is well prepared to make future customs clearance for goods transports between the EU and the UK as smooth as possible. It’s now up to senders to once again check thoroughly that they have made all necessary preparations. On our website, we’ve published a checklist that allows our customers to see at a glance what they have to be aware of. And of course, DACHSER’s local contact persons are always ready to answer any questions.

It’s absolutely clear what the worst-case scenario would be: goods remain stuck with the sender and we are unable to collect them. The transport can start only once all the paperwork required for customs clearance has been made available. Starting January 1, there will be no transition period or exceptions and the paperwork cannot be submitted later. These are the conditions that logistics providers must now observe. In this worst-case scenario, customer warehouses would overflow as the goods remain where they are.

What specific preparations has DACHSER made as a logistics provider?

DACHSER has been preparing for Brexit for years now. We formed an internal project team made up of experts from all areas of the company. It’s this team’s job to address all aspects of Brexit—from customs clearance, volume monitoring, and traffic routing to IT, staffing, and communications.

To prepare for all eventualities, we’ve invested particularly in customs and created software solutions to help ensure customs processes are performed efficiently. As well as adding resources to our IT infrastructure, we’re making sure that DACHSER UK and DACHSER Ireland both have sufficient personnel—especially those trained in customs matters. On the mainland, our global logistics network provides us with ample expertise and resources. We’ve also formed an internal task force to support our colleagues in the UK and Ireland as well as our distribution platforms in the EU starting January 1, 2021. Task force members are being trained on how the various systems work so we can stem any additional costs, and our country organizations are working closely together to minimize any disruption. And because we have AEO status in the UK and in numerous EU countries, we can see to it that goods clear customs as quickly and seamlessly as possible.

What’s the situation in the Republic of Ireland? The majority of transports to and from Ireland pass through the Channel. Are there alternative routes?

There are bound to be obstacles when transporting goods to Ireland. But what’s particularly unclear is how things will work with Northern Ireland, which as we all know is a very political issue. There are alternative routes to Ireland and while all options involving ferry companies are being explored, these will ultimately lead to longer transit times.

After years of Brexit preparations, what lessons have you learned?

It’s all about staying flexible in the face of inevitable surprises, especially political ones. Personally, I hope that the nightmare scenarios predicting thousands of trucks stranded on each side of the Channel don’t come true and that the authorities also do their part to implement the process efficiently. I’m also curious to see how the economy develops and whether Brexit will scare other countries away from pursuing any desire to leave.

Step by step toward the goal — Sea freight groupage containers facilitate the continuous flow of goods

In turbulent economic times, sea freight groupage containers are becoming increasingly popular. Production bottlenecks, fragile global supply chains, and a container shortage have further increased the demand for small and predictable shipment sizes in sea freight. Michael Kriegel, Department Head DACHSER Chem Logistics, explains the service that enables a reliable flow of goods in sea freight. He also talks about why a good network connection is crucial, especially for goods with high security requirements.

Companies are already analyzing their global supply chains and increasingly shifting their shipments to sea freight groupage (called “less than container load,” or LCL for short). The big advantage of groupage for customers is that they can ship smaller loads without having to pay for a full container. As a result, they can maintain a continuous flow of goods, even in the event of production bottlenecks, and also respond more flexibly to seasonal fluctuations. LCL containers are often prioritized over full containers in the loading process, which provides an additional time advantage and allows for better planning of transportation times. DACHSER markets what it calls “consolidation boxes” - customers pay only for the space they actually occupy in the containers. In addition, the company plans departures weeks in advance rather than only once production volumes are known. This means that containers, which are still in short supply, can be pre-booked in good time and customers retain flexibility when booking. 

Many companies, especially in the automotive, life science, and healthcare industries, have been using groupage shipments by sea for years. But this service is also suitable for the chemical industry, which places particularly high demands on safety and transparency during transport - and thus needs a logistics provider with the appropriate experience. DACHSER is one such provider. It set up a purchasing partnership with the German Chemical Industry Association (Verband der Chemischen Industrie e.V., or VCI) in 2009. This successful alliance for European groupage shipments from Germany was then expanded in 2015 to include air and sea freight. Member companies of the association now benefit from globally standardized core services in the groupage network - transport, warehousing, and IT solutions. All this specialist industry experience has been pooled in the DACHSER Chem Logistics team. 

“In shipments from customers in the chemical industry, which sometimes contain dangerous goods, the decisive factor is always safety. We have to protect life, limb, and the environment,” says Claus Freydag, Managing Director DACHSER Air & Sea Logistics Germany. “DACHSER also boasts global dangerous goods expertise in the groupage container segment and covers all LCL-compatible IMO classes in its own network and in its partner network,” he adds. The company’s central dangerous goods management system and its more than 250 regional safety advisors monitor compliance with special regulations governing the transport of dangerous goods. In addition, many DACHSER employees are trained annually in the particular requirements of chemical logistics.

For sea freight groupage, the sea freight team consolidates various LCLs and loads them into a full container. This optimizes utilization of container capacity, which in turn provides the basis for economical transport costs. Maximum utilization also improves transport sustainability while reducing the risk for individual companies at a time when supply chains are fragile. “Ports around the world have been clogged for months, causing significant delays - and making it rare, if not impossible, for shipping companies to stay on schedule. Instead of sending a full container on its way, which can get held up if loading windows are missed, more and more customers are opting for sea freight groupage containers. This reduces their risk by spreading it over several departures and ships and ensures a more timely transport,” Freydag explains.

Intelligent logistics solutions and a strong network are crucial

Demand for LCL services will continue to grow, even apart from the impact of the pandemic. That’s why DACHSER, as a market leader in the German and European groupage market, has also expanded its maritime LCL network to include 70 weekly direct services to and from Germany. “With a focus on the main global routes, we are systematically expanding our dangerous goods capacity as well. This of course means serving the major markets in both the eastern and western hemispheres, such as China, India, and the US,” Freydag says. In 2021, DACHSER shipped around 19,700 cbm of dangerous goods as LCL with customers in the chemical industry. Dangerous goods thus already represent 15 percent of DACHSER ASL Germany’s LCL business. In addition to the usual port-to-port services, DACHSER also operates various direct import services to the hinterland or other European cities. For example, once a week LCL groupage containers travel directly from port locations such as Hong Kong, Shanghai, and Ningbo to ports such as Hamburg and Bremen - but also with direct loading to Frankfurt, Kaufbeuren, Cologne, Munich, Nuremberg, Stuttgart as well as Copenhagen and Gothenburg. Direct loading minimizes the risk of cargo damage and provides additional safety by eliminating deconsolidation at the transit terminal.

Furthermore, this increases profitability and achieves additional lead time advantages by rectifying bottlenecks in the port. “DACHSER’s global network connects all groupage transports on land and water. We link our own sea freight groupage container services to and from Germany to the comprehensive range of services offered by DACHSER European Logistics, thus enabling end-to-end service throughout Europe,” Freydag says. For storage and unloading, DACHSER is increasingly using its own branch infrastructure in addition to the standard container freight stations (CFS) at the ports. When port capacity is limited, companies thus benefit from additional dispatch quality and shorter transit times.

This concept, in keeping with the idea of “everything from a single source” links the European overland transport network with the global sea freight network - a feature that not every company can offer. “Thanks to the end-to-end solution of our LCL product, which goes beyond just sea transport, we can maintain high quality across the aforementioned carriers and offer transparent traceability of the goods,” Freydag adds.

The past two years have seen risk minimization in the global movement of goods become a crucial factor for success. To take full advantage of LCL shipping, it is crucial that pick-up and onward carriage are also handled in an integrated manner, thus ensuring expertise in the safe transport of dangerous goods along the entire transport route.

“Employee connection and loyalty is what makes DACHSER stand out”

From one-man company to global player – In its 90-year history, DACHSER has become an international heavyweight in the field of logistics. But how has the logistics provider benefited in that time from the loyalty of its employees and its structure as a family-owned company? Dr. Andreas Froschmayer, Corporate Director Corporate Development, Strategy & PR at DACHSER, explains.