There’s not much time to go before the UK's transition period comes to an end on 31 December 2020, and what it will mean for the logistics sector remains to be seen. During this transition, companies operating both in the UK and the EU have not yet felt the first changes of Brexit.
However, the end of this period will, without a doubt, have practical implications, mostly for international road transport. And that’s why, now more than ever, shippers and logistics experts need transparency across their supply chains to navigate changes and adapt to the new regulations.
What will Brexit mean for logistics professionals?
A no-deal would mean that the UK is no longer a key entry and gateway point for the European Union. This will result in a significant impact on outbound UK products for the EU markets, products entering the UK from the EU, and transit flows from non-EU markets but heading to the EU through the UK. Even in the scenario where a deal is signed, logistics and shipping businesses will need to comply with new permits and paperwork when entering or exiting the UK from the EU.
Expected impacts include delays at ports, mandatory border checks and customs clearance, and difficulties in processing the required paperwork. Recently, the UK Department of Transport stated: "Any delays will be due in part to low levels of border readiness among traders and the haulage industry, leading to significant numbers of trucks being stopped by the authorities." The worst-case scenario predicted by the Government includes queues up to 7,000 trucks at the Kent border, with up to 70% of them not complying with the new regulations.
Increased pricing from products between the EU and the UK and the need for extra personnel and 3rd parties to handle new administration will impact freight costs
Practically speaking, what should we keep in mind when operating between the two territories?
Being informed and prepared in advance will help logistics professionals stay ahead and mitigate the chaos. Our recommendation for shippers working with the UK is to ramp up their preparations to be well ahead once the final decisions are taken.
Make sure not to forget to:
- Apply for a GB EORI number and/or an EU EORI number
- Get a customs intermediary and prepare for customs requirements and documentation
- Make sure your drivers hold the right driving permits
- Prepare to pay or account for VAT on imported goods to the UK
- (Re)consider your commercial agreements and existing routes to optimize your business
- Work out the impact on planning and margins based on lead times
- Find better ways to manage accosts and collect data
Depending on your business's nature, the products, and the business frequency with the UK/EU, some of these points will be more relevant than others to you.
How can Alpega TMS help?
Implementing a digital solution can support the shippers' transition period by reducing manual work, monitoring performance, and facilitating relationships with different parties.
Alpega TMS manages logistics end-to-end, from carrier sourcing to final settlement. Some of the tools are specifically beneficial for those ramping up their logistics after Brexit:
Having the right paperwork in place for goods in transit will be one of the major tasks as of 2021 when trading with the UK. With Alpega TMS, documentation per transport order can be easily uploaded in PDF format and accessed anytime, anywhere.
Shipment tracking and real-time data
Blockages in customs clearance and unsuccessful custom clearance processes can negatively impact order fulfillment and the on-time delivery of goods, resulting in low customer satisfaction rates and demurrage costs for the shippers. With data sharing and real-time updates, logistics professionals can easily track their goods, connect with the ecosystem, and react to unexpected delays to mitigate impacts.
Analytics and cost management overview
With so many changes coming up, reviewing results and measuring KPIs like OTIF and order fulfillment is essential to make more accurate decisions and forecast future demand.
A clear overview of the costs derived from the additional processes and the possibility of analyzing and settling them online will also help streamline processes and ensure freight costs savings.
Want to discover how Alpega TMS can help? Get in touch!