Market Information
11/18/2020
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.
