Logistic News

How Brexit will impact your supply chain

18 January 2021

The final decisions on Brexit are close – and a lot of negotiations are currently ongoing – potentially affecting your supply chain. But what has happened in the recent days and weeks? What is to come in the remaining weeks until the transition period is over? And how will it all effect your logistics? To answer those questions, we have gathered all the information you need to know and detailed how you can make your logistics Brexit ready.

5th November, 2020

The UK’s departure from the EU, also known as Brexit, is set to cause disruption and challenge the current status quo. The final Brexit deal will most likely have longstanding effects on the global economy and especially international trade. For instance, this can mean new barriers and tariffs on traded goods which will then effect the business models and supply chains of companies involved in this process.

With the current trade negotiations and the final discussions on Brexit, a lot of rumors are spreading as well. We know that Brexit might be not as transparent as you want it to be and a lot has happened since our last update. That’s why we have listed all important information and updates, so you are up to date with the current status:

What has happened in the last few days:

  • October 22:

    The Brexit trade talks between the UK and the EU have resumed in London

  • October 30:

    The European Union and Britain are working hard for a Brexit trade deal, but much remains to be done, EU chief negotiator Michel Barnier said on Friday. Talks will continue in Brussels after the last 7 days of negotiations, he shared via Twitter.

  • November 2:

    Media news reported that UK and EU officials are nearing an agreement on fishing rights – one of the biggest obstacles to the planned trade deal.

What will happen next:

  • December 31st, 2020:

    The transition period of Brexit ends and that means that the negotiations must be finished at this point. The UK will then leave the EU’s Single Market and Customs Union. This will also see other major changes happen, e.g. free movement of people will end and business trading with the EU will change and follow different rules. This can mean that if a trade deal is not in place, Britain will return to the basic World Trade Organization terms, meaning tariffs on goods and border checks.

We talked to Steve Cock, Director Customs Consultancy at KGH Customs Services, A Maersk Company:

“It is now certain that the UK will leave the EU Customs Union at the end of the year – although a deal on a free trade agreement is still undetermined, it is clear that there will be challenges for small and medium sized businesses and their supply chain. Companies must be in a position to complete import and export declarations between the UK and EU, regardless of the outcome. To add to that, companies must also have a good understanding of how Brexit will impact their trade flows, and identify any mandatory or trade facilitating requirements, such as ensuring their goods classifications are in line with the relevant customs tariff, as well as obtaining licenses, permits, certifications to prevent delays or stops at the border come 1 January 2021.

With the new UK Border Operating Model, importers who wish to defer declarations will need to make an entry in Declarants Records (EIDR) and submit a supplementary declaration six months from the date of importation. Companies will need to consider how they will account for import VAT and consider acquiring an agent to act on their behalf if they do not reside within the UK. Non-UK companies will also be limited to working with an approved agent under Customs Freight Simplified Procedures (CFSP).

At the same time, exports out of the UK get more difficult, as exporters will have to complete various customs declarations depending on the final destination of the goods, as well as further formalities and any other commodity-specific approvals. These procedures extend to the drivers taking the goods from GB to the EU, regardless of where they are starting, as they will need to carry evidence that EU import requirements have been met for the goods they are transporting. On top of that, exporters or their agents will also need to be approved for a customs comprehensive guarantee and to be an authorised consigner in order to transit goods within the EU.”

How Twill and its partners help to keep your supply chain stable during Brexit

As new Brexit rules are approaching, Twill won’t let you down. Being supercharged by industry leader, Maersk, we aren’t just moving your ocean and inland transportation and take care of customs services. We also offer dedicated information on Brexit.

Moreover, we provide you with the right partners and can connect you with Maersk’s Customs Services experts who can help you with queries related to Brexit. They are experts in their field and are here to give you the support you need to move through the Brexit maze, and stay on top of the latest updates for your supply chain.

Additionally, we are proud to introduce you to Maersk’s newly acquired company KGH. With the experienced advice of KGH Customs Services, you will have access to experts in this field who can guide you through the new trading requirements that will flow from 1 January and help you take the necessary steps to reduce the risks of disruption in your trade flows and supply chains. KGH offers several sources to align with specific company needs and compliances such as the Brexit Analysis, Brexit Smart Check, and Brexit Tariff Classification. Find out more about the dedicated Brexit Customs Services at KGH.

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