Pandemic, then Brexit... what's next?

29th June 2020

Andrew Austin, our Group Operations Director, joins the panel at the AutomotiveEV conference to discuss the implications of the COVID-19 pandemic and what the post-Brexit future may look like for logistics in and out of the UK.

Here are the speaker notes from his session on the impact to logistics and the supply chain:

The world is living through unprecedented times in its modern history with the impact of the COVID-19 pandemic, and the impact on the industries represented in this conference is significant.

As we move into the recovery phase, many manufacturers believe they can achieve over 75% operating capacity by the start of 2021. Nevertheless, many have expressed that other parts of the supply chain will need to be reactivated in order to start the recovery process fully. This includes accessing necessary road and air freight capacities, the latter of which faces significant barriers due to customs delays and quarantine policies, caused by COVID-19.

That is challenging enough. And yet we also need to further consider the implications of Brexit to our commercial lives, once the transition period ends and the new UK/EU agreement begins.

COVID-19 and Brexit timeline

With effect from 1st January 2021, it is planned that imports and exports into and out of the UK will require a customs declaration, with associated customs clearance. This post-Brexit world, following closely to the COVID-19 pandemic, will provide many logistical challenges to those seeking to move goods in and out of the UK from Europe especially.

Customs control zone

Companies will need to define what incoterm® (usually followed by the year of the rules to which they apply i.e. 2020) they will  be transporting their goods on to meet the requirement of the UK becoming a ‘third country’ as this will help define to both parties involved (buyer and seller) what their obligations are with regard to delivery, risk, costs, obligations, transportation, and supply chain security.

Some customers have elected for an ex-works (EXW) arrangement where they will take responsibility from a named place, usually the factory gate.

Incoterms (EXW)

Other customers may well elect for ‘FCA’ (free carrier named point of export), for example, but there are many others that can be selected.

Incoterms (FCA)

Post Brexit, the incoterm® selected will determine what the various parties responsibilities then become, and this diagram demonstrates the customs process flow of a typical FCA journey of a shipment into the UK.

Post-Brexit customs process

Shipments from outside of the EU will require a transit document of some kind to allow the goods to enter the UK (like a T1 document).

These steps are required to meet the customer’s challenges…

Post-Brexit logistics challenges

Customs warehouse authorisations:

Customs storage

‘Intensive’ discussions are planned for July 2020 between the UK and the EU to try to broker a way through the various issues.

Discussions are said to be at a ‘precarious’ stage currently.

Brexit timeline - next steps

The UK could be facing an increased likelihood of a ‘no-deal’ Brexit, with trade terms being set by the World Trade Organisation (WTO) with tariffs being set on most goods that may affect the competitiveness of these goods.

No deal Brexit

So, in reality, the pandemic and its consequences may be followed closely with significant change in terms for those trading with the UK

In conclusion, due consideration needs to be given to the implications of this. Speak to your logistics provider for assistance with your imports and exports.

No deal Brexit

Welcome to Priority Freight

Experts in air charter, direct express road transportation, express air freight, express on-board air courier and customs clearance.

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