The UK has left the EU, and come 1 January, cargo moving between the UK and the EU will have to undergo Customs formalities and border control. At DFDS, we’ve been planning this transition for years and have the people, systems and processes in place to help worried customers with their Customs needs, easing their transition into a world of trade where the UK has its own set of rules.
“Brexit has consequences for anyone trading with the UK. Since 2016, we have worked with tax authorities, governments, customers and partners to assess what needs to be done for business still to flow freely,” says Group Indirect Tax Manager Jean Aubert.
“If we close our eyes, it might not happen”
“We’ve yet to meet a customer who is 100% compliant when it comes to all these new Customs rules,” says UK & Ireland Import Full Loads Route Manager Richard Backhouse. We can see that larger customers generally know about the new Customs requirements and have put systems in place to handle them, whereas many other customers are unprepared and even unaware of the magnitude of the changes taking place. Whether they are smaller businesses or big companies with complex supply chains, we always find that we can do something to help them navigate the jungle of Customs terms and paperwork in the wake of Brexit,” Richard says.
Brexit is local
Customer needs are often location-specific. In Grimsby and Larkhall, seafood is one of the main types of goods shipped and stored. This requires a catch certificate for fish – which is seldom relevant in other locations. Timelines also vary from place to place: in Immingham, you might have two days to prepare for goods arriving, while in Dover you’re lucky if it’s more than an hour. This means that all our local teams need to understand the local processes and legal requirements that differ from country to country, to prepare for their situation, types of customers, goods and flows.
Practicing and testing customers’ setups
Every day, our local Customs people reach out to customers to let them know how we can help them, both on an individual level, through calls, surveys and newsletters. Customers receive a steady flow of Brexit-related materials, but what they really appreciate is our one-to-one approach where we check their Brexit readiness and help break down the jargon and look at the requirements specific to their business and supply chains. A first step is doing legal checks, as the terms and conditions under which they sell their products impact their duty obligations. Also, do they have the necessary registrations and are they hooked up to the relevant digital systems? We test customers’ current setup and offer them a complete process for declaration and Customs Brokerage services. The message is simple: if customers are worried about their Customs processes, we’ll take care of it for them.
“We also ask customers to provide us with all their current commercial documents so we can get them into the system and show them how it will work after 31 December,” Richard says. “By doing this, we both help prepare the customers and our own team for the standards to come. We are helping make their paperwork compliant and training our staff at the same time.”
Developing Customs expertise
We have a strong Brexit organisation assisting customers with Customs processes and general advice across out network, and a dedicated customs and compliance department within the Financial Services Centre in Poznan. They all have their work cut out for them. Like in Immingham: until now, 5% of our customers have needed Customs declarations and assistance, for business with Norway. In just a few months, that number will be 100%.
“We are training our Customs staff on local rules and regulations, about specific customer needs, and also how to deal with multi-route customers. DFDS is strong on Customs processes and we need to make sure that we help our colleagues to develop the specific skills that they need in their locations,” says Sofie Fredrikson, Customs Manager Sweden. ”We have prepared by doing tests and preparations that are as close to real situations as possible, by using real customers as cases. There are of course still uncertainties, since there is not an official agreement between the UK and EU.
I am proud of being a part of our fantastic Customs team in Sweden.” Sofie says.
Fighting spirit: all of the members of the Swedish Customs team have one
DFDS as a Customs Broker
Many DFDS entities are certified as an Authorised Economic Operator (AEO). AEO accreditation is extremely valuable because it means that we have much easier Customs processes. It reduces the guarantee amounts we need to provide and reduces or removes the security controls of processes and systems. “We commit to transparency in our organisation and processes and in exchange the authorities grant us simpler procedures to follow,” Jean Aubert says.
“Getting this AEO stamp of approval is no easy feat. We must demonstrate our knowledge of several Customs activities – broker, transit operator, warehousing – as well as our security preparedness for several sites. But it’s worth it – it shows our customers we are a certified partner in the field of Customs. It means that they can trust us and that we can help them with everything from simple import and export declarations to acting as a Customs Broker, where companies give us power of attorney to do all their Customs work for them,” Jean says.
But who’s the customer in a B2B world? “In Logistics, the importer or exporter is the customer to receive our services. In Ferry the customer is the logistics company, and we can act as a Customs Broker for their customer, the importers or exporters. In this case it will be our customers’ customers who actually get our services,” says Legal Counsel, Indirect taxes, Stephanie Thomas.
“But regardless of who the customer is, it is vital that they sign a representation agreement giving us power of attorney before we start working for them. Operating without one would not only be illegal but would also financially expose DFDS. And once this agreement is in place, customers provide us with commercial invoices and packing lists, description of the cargo and other information. To practice our set up, we give them a simulated declaration to show them what kinds of documents they will receive from us in January,” Stephanie says.
“We have a clear benefit by being onsite. A lot of customers see this, and our Customs services are in high demand. Our approach is not to aggressively push these services to customers. If they do it themselves, or choose another broker, that’s fine by us. As long as their papers are in order, they can keep moving their goods through us and their business remains,” Jean says.
Brexit is digital, too
Each country trading with the UK has a different government process and they’re all electronic, with local governance dictating the processes. On our end, we are building links between the customers’ IT systems and our own to automate the communication with Customs in each country, make the process as fluid and efficient as possible and ease the weight load on our Customs Service Representatives.
Right now, the many digital connections into local Customs tools cause process variance and complicated maintenance. Also, the digital system for the final UK Border Operating Model is still not ready and a lot of companies are looking to build tech integrations into it, leaving them with under two months to get everything ready. When testing, we try to get as close to the 2021 situation as we can, but we are testing in digital systems that still consider the UK an EU country until 31 December. We are dealing with this by inserting Canada or Australia as a test country.
Expect border inspection
Border Inspection Points (BIP) are European Union-approved entry points for products of plant and/or animal origin, originating in countries outside the EU/EEA. These products must undergo certain Sanitary and Phyto-Sanitary (SPS) checks conducted by veterinary authorities and this will often take place in the ports. In locations that already deal with non-EU countries, BIPs are in place and are ready, like in Rotterdam where they have deep sea container flows. “For DFDS right now, this is mainly a challenge on the Channel, due to the high volumes of time-sensitive foods,” Jean says.
“Everything that can be done on our end in terms of staff, systems and processes is being done.” Jean says. January and February 2021 will be the real period of education. That’s when customers will see if they’re prepared and we are sure that they will be quick to learn. For now, all we can do is talk to them, show them what needs to be done and inform them of how we can be of assistance via individual guidance, direct contact and a variety of digital channels like newsletters, Social Media and press releases.”
- AEO = Authorised Economic Operator*
- ATA Carnet = Allows tax-free and duty-free temporary export/import of non-perishable goods e.g. for the use in exhibitions
- ENS = Entry Summary Notification (mandatory when entering first EU country)
- EORI number = Economic Operators Registration and Identification number
- EXS = Exit Summary Notification (mandatory when leaving EU)
- GMR = Goods Movement Reference
- MRN number = Movement Reference Number (generated when Customs declaration is submitted)
- SPS certificate = Sanitary and Phytosanitary certificate (Certifies that goods are compliant with the phytosanitary regulations of the EU. Required when importing animal and plant products, must be obtained in exporting country)
- TAD = Transit Accompanying Document
*The AEO status is achieved on the basis of legal entities, and the following have been granted it:
- DFDS A/S (Denmark)
- DFDS Logistics Limited (the UK)
- DFDS Logistics B.V (The Netherlands)
- DFDS Germany ApS & KG (Germany, only AEO Customs simplification)
- DFDS Seaways (Belgium)
- DFDS Logistics Karlshamn (Sweden)
- DFDS Logistics Gothenburg AB (Sweden)
- The Gothenburg Ro-Ro terminal
October 26, 2020