Customs Clearance After Brexit: What North American Freight Forwarders Should Know
Mar 2, 2022 9:16:00 AM
So far, Brexit’s impact on the United States and North America as a whole has been relatively minor. American consumers have been largely insulated from the effects of European trade breakdowns. With slowdowns and shortages creating havoc for businesses and buyers across the pond, the impact on stateside commerce has been small in comparison.
However, North America is still affected by changes in the global economy. With the slowdown of imports and exports between the UK and the EU thanks to new regulations and customs fees, North American freight forwarders have new opportunities to engage in the movement of goods post-Brexit. But shipping to and from these two markets isn’t a simple affair. What do you need to know to correctly export to the UK and EU after Brexit? Let’s dive in.
With everything going on stateside in recent months, precious few column inches have been dedicated to changing Brexit rules in the North American press. To summarize, once the UK abandoned the single market, a new regime of costly and arduous fees, regulations, and paperwork requirements were put in place that made moving goods through customs after Brexit cost-prohibitive in many industries.
Many companies in the UK, from eCommerce retailers to agricultural and food producers, have ceased operations in the EU due to these new challenges. The EU accounted for 54% of all goods imported into the UK, which has been a significant problem.
The UK has been left with gaps in their supply chain
Now that Brexit is in full force, the movement of goods between the UK and the EU has slowed down significantly due to increased new regulations and documentation processes. This comes when bottlenecks have limited the global supply chain as a whole. The result has been a number of gaps in the supply chain originating from and entering the UK, especially for raw materials.
Many UK businesses that exclusively relied on commerce with the EU to produce products have been devastated by post-Brexit import/export tariffs. This includes restaurants and food suppliers, who have experienced major issues getting imports of specialty products like cooked meat and fish or seasonings. Import times increased from about 3 days to 5 weeks, and imports now come with additional costs due to customs fees. Unable to source those goods locally, those businesses will need to look elsewhere for suppliers to stay afloat.
Though supply imports have decreased, demand has continued to remain stable — so many will be looking to diversify where they import from this year.
North America has new opportunities in the UK and EU
In short, Brexit has created problems for many businesses in both Europe and the UK. Suppliers, in particular, have found it difficult to come up with an efficient and cost-effective solution for adhering to new customs rules. While a softer barrier to trade exists between the UK and Northern Ireland, the regulations on goods and customs are no less difficult to navigate.
Many EU suppliers, no longer benefiting from free trade from one of their biggest partners, are open to looking for new buyers for their goods elsewhere — including across the Atlantic. At the same time, many UK businesses are on the hunt for supply from other sources now that EU regulations no longer restrict them.
Due to these new gaps in the supply chain, freight forwarders in North America have an opportunity to support growing business relationships across the pond, regardless of complications with tariffs on certain products.
How do you prepare to export to the UK and EU?
While there are new opportunities for expansion with exports to the UK and EU, freight forwarders need to be ready to tackle paperwork like T1 documents and understand any import restrictions or standards set in place. To be fully prepared, they’ll need to reevaluate logistics, manufacturing, inventory, taxes, customs declarations, and distribution.
Some things North American shippers should keep in mind:
Changes to VAT calculations have increased shipping costs for many goods. A customs brokerage processing expert can give you a detailed understanding of different shipping codes and how recent changes may impact VAT calculations.
New “rules of origin” determinations are in place. This requires businesses to track and prove country of origin for all goods and products entering the EU, including raw materials.
There are ongoing complications in the certification process for food, animals, medicine, and professional services. Consult with an expert if you wish to ship these goods.
Of course, there are also some specific regulations that North American suppliers must adhere to when shipping to the UK or EU member states. For example, US manufacturers need to have a CE mark certifying goods traveling to the EU, whereas goods headed to the UK must be certified with a UKCA mark.
This is no small task, and many suppliers and manufacturers are turning to third-party firms to help audit and assess their operations and expedite their shipping across borders.
Setting up for success
Customs clearance after Brexit isn’t easy for anyone, but North American freight forwarders can overcome Brexit-related challenges with preparation and the right expert assistance.
To take full advantage of post-Brexit trade opportunities, consider working with an experienced business processing outsourcing (BPO) partner with deep knowledge and understanding of changing customs rules, fees, and regulations, as well as multilingual capabilities.
With a little extra support for the most complex aspects of customs clearance, freight forwarders can successfully expand into new markets, filling the gaps left behind by Brexit-related changes.