Brexit: an overview of the consequences for shipping processing
The UK is not only one of Germany’s most important trading partners, but also acts as an international hub for freight traffic. However, the advantages resulting from the free movement of goods in terms of the EU single market disappear in the event of a hard Brexit.
“Hard” here describes the exit of the member state Great Britain without special treaties, which means that no privileges can be used from 1 January 2021. As of next year, Great Britain will be considered a third country, which will entail restrictions and customs duties in particular.
The crucial question: What do e-commerce or trading companies have to do in order to continue to manage their exchange of goods with Great Britain with a high degree of automation?
HEIDLER takes a look at the background to the Brexit, with a special focus on the changes in shipping processing with the soon-to-be third country of Great Britain.
Simply explained: This is how the customs status of the United Kingdom will change in the event of a Brexit without an agreement
As long as the United Kingdom is part of the customs territory of the European Union, imports and exports of goods are considered to be internal market traffic. This means that there are no restrictions, which means that no special treatment is necessary when using our shipping software. With Brexit, this changes from one day to the next – from now on, the Customs Code of the European Union (CCC) and the corresponding implementing regulations apply.
This means that deliveries from or to the UK are now considered exports or imports of goods. Further information that you as an EU consignor must now observe is provided by the EU via its online portal “Access2Markets” (https://madb.europa.eu/madb/indexPubli.htm). The British, for their part, have installed a simplified import procedure, among other things, which will initially eliminate the complete import declaration as well as customs duties.
EU-UK goods shipments from 1 January 2021: These customs formalities are necessary
For companies that have so far only shipped within the EU, Brexit is like a hard cut. Suddenly, a wide range of new regulations, procedural principles and levies come into play. This not only has an impact on the margins for those products that are shipped to the UK. It also increases the complexity for customs declarations, shipment preparation and so on.
Important: If the UK leaves without a trade agreement with the EU, the rules of the World Trade Organisation (WTO) will automatically apply when the “hard Brexit” takes effect. There is a special customs tariff (so-called WTO schedule), which largely corresponds to the EU customs tariff. Further information is provided by the UK government on this overview page (https://www.gov.uk/government/publications/uk-goods-and-services-schedules-at-the-wto).
In the following we give you an overview of which aspects are now important:
EORI number, i.e. a registration under the EU-wide tax system called the Economic Operators Registration and Identification System.
Commodity numbers, i.e. a clear allocation based on customs rates, necessary documents for the shipment as well as possible import and export restrictions.
Electronic customs declaration, applies to imports and exports
Export controls and export licences, more details can be found on the detailed pages of the Federal Office of Economics and Export Control (BAFA) (https://www.bafa.de/DE/Aussenwirtschaft/Ausfuhrkontrolle/ausfuhrkontrolle_node.html)
Not to be forgotten: In addition to customs issues and processes, delivery times are also delayed, which can affect your shipping commitments. In addition, different regulations apply with regard to value-added tax. An early conversion of internal processes in the sense of a hard Brexit does not only affect the dispatch of goods. Answers to typical questions are provided by the local chamber of commerce and industry as well as, in some cases, industry associations.
HVS32: Outbound logistics with HEIDLER – what is important?
After providing you with basic details on goods handling in the wake of Brexit, we would now like to go into detail about changes in the use of our shipping software. After the transition period ends with the “hard Brexit” on 1 January 2021, you will need a reliable partner like HEIDLER at your side.
Since many aspects are relevant and sometimes have a reciprocal effect, we would like to summarise the most important in a compact form. At the same time, we will give you an example to illustrate the implementation in practice in a way that is easy to understand. Let’s go!
Shipments of goods to the UK will be considered “third country shipments” from 1 January 2021
HVS32, HEIDLER’s multi-carrier shipping software, simplifies your shipping process from the first use. With over 280 integrated carriers, various interfaces as well as customised extension modules, you leave nothing to chance.
From now on, you must transmit various data or enclose documents, as is the case when shipping to Switzerland, for example. This concerns, among other things, the transmission of the value of the goods, the enclosure of the commercial invoice as well as the corresponding export documents. In addition, a suitable franking (so-called Incoterm) must be selected in order to settle customs and tax duties.
Your advantage: HEIDLER integrates all updates and changes of individual carriers promptly into the shipping software. This ensures that EDI messages, labels and the like are always available in the format required by the respective logistics partner. The use of our shipping software thus remains conceivably simple despite Brexit!
Converting internal systems (SAP/warehouse management systems) to new requirements
Controlling the shipping processes via HVS32 is one thing, but adapting your IT systems to the new requirements is quite another. We would like to explain this with an example:
DHL Paket International operates in such a way that every single parcel is handled on the basis of electronically transmitted customs data.
In order to comply with the customs data obligation, the HVS32 shipping software generates an electronic data record (ITMATT format) based on the customs-relevant information provided in the data input. This corresponds to DHL specifications and is transmitted to the carrier at the end of the day. These formats differ depending on the carrier, but are supported by the HEIDLER shipping software to a significant extent and prepared accordingly.
For increased shipment volumes, there is also “DHL Breakbulk”, a special DHL service for express shipments, among others. At UPS, the corresponding equivalent is called “UPS Worldease”. With both services, collective customs clearance is thus possible – supported in HVS32, of course.
Tip: Practically every carrier offers specific information on changes that will result for frequent shippers due to Brexit.
Even beforehand, your warehouse management system needs an interface adapted to the individual item level, which can then be adopted by HVS32. Corresponding extension modules are of course available to you – click here for more information.
Important: All settings, formats and co. that are now important for third country shipping to the UK always refer to the processes of our shipping software. It complements the steps you need to take in the course of integrated customs clearance. With our solution, you thus have a proven tool at hand to set the “last mile” in motion.
FAQ: Shipping and Brexit – answers to frequently asked questions
We would like to make the transition as easy as possible for you, which is why we have presented typical questions that customers ask us in the course of the changes due to Brexit in a compact form. Thanks to the modular structure of our HVS32 shipping software, you will always be on the safe side even when the UK changes from an EU member to a third country.
Do you have any further questions? We will be happy to provide you with uncomplicated support and explain functionalities and the like that will ensure shipping from 1 January 2021. Please contact us without obligation!
I would like to ship goods to Northern Ireland – what do I have to consider?
According to the Northern Ireland Protocol of the currently valid Withdrawal Agreement, shipments of goods to Northern Ireland are treated as “intra-Community supplies”. This means that the same rules apply as for other EU member states. However, certain export controls as well as proof of status are conceivable.
Up to now, I have only shipped within the EU. Where exactly will there be a need for action from 1 January 2021?
Anyone who participates in the international movement of goods must take into account, among other things, the UN Convention on Contracts for the International Sale of Goods. In addition, aspects of shipping, i.e. transport, insurance or customs clearance, will be divided between exporter and importer. The INCOTERMS, the globally recognised standard for cross-border contract and delivery conditions, regulate this in more detail. This also results in obligations according to which, among other things, commercial invoices, certificates of origin or import licences must be presented or proven. Chambers of Commerce and Industry often offer training or information material on this.
My products are CE marked by UK certifiers: Will anything change for imports from 1 January 2021?
After the end of the transitional period, CE markings certified by British companies will no longer be valid. This means that placing such products on the market in the EU is no longer permitted. One possible solution relates to a conformity assessment, which can be applied for at a “notified body” in an EU member state.
Do you have any further questions about processing in the HVS32 shipping system? We would be happy to add to this list any questions you may have in the wake of the approaching Brexit. Write to us or give us a call – we’ll be happy to help!