Companies moving goods between the U.K. and the EU will be subject to new, more stringent customs regulations when the clock strikes midnight this new year. As with any change of this magnitude, shippers and receivers alike should anticipate challenges, delays and general inefficiencies during the adjustment period, which could last for some time.
This will be the world’s first real look at how post-Brexit trade will operate. When the U.K. left the EU in early 2020, it also left the EU Customs Union. Since then, HMRC’s Staged Customs Controls (SCCs) have been in place, reducing the burden of customs formalities on companies importing goods into the U.K. from the EU throughout 2021. With those easements expiring, full customs formalities will be phased in on goods moving into the U.K. from the EU.
These new customs formalities will require companies moving goods between the U.K. and the EU to become familiar with new systems and technologies quickly to keep their shipments flowing.
Last January, the U.K. introduced its new goods vehicle movement systems (GVMS) in preparation for full customs controls. The system is especially intended to help locations with limited space or infrastructure take on this new customs burden. Since its inception, GVMS has been predominantly used for goods moving between Great Britain and Northern Ireland. That will change after the new year, as the system will be mandatory for goods moving under the UK’s new pre-lodgement customs model.
“GVMS is going to become much more prevalent throughout 2022. The risk to U.K. traders or people with operations in the U.K. is that you need to understand how to use GVMS,” said Chris Curtin, DDC FPO head of customs and logistics services. “Even if you are operating your own trucks or subcontracting them out to a third party, you need to know if your goods are moving through a port that only uses this new GVMS system or if there’s the option for you to use an alternative.”
The alternative to which Curtin refers is the temporary storage customs model, in use for years by port and airport communities handling imports from non-EU countries. Both pre-lodgement and temporary storage offer their own distinct advantages, but you need to understand how they both work in order to get the best out of them and pick the right model for your freight movements.
The U.K. is also implementing its own pre-notification system for sanitary goods IPAFFS, as part of the large swath of Brexit-related changes. This will strongly impact traders who wish to import animal or other high-risk foods into the U.K. from the EU.
Brexit-related changes are not the only headwinds traders will grapple within 2022.
Shippers should also be prepared to handle the World Customs Organization’s HS code changes on Jan. 1. These code changes could pose a particular problem for shippers who dispatch goods right before the changes occur. These shipments could end up in customs on or after Jan. 1, making them subject to the new regulations and causing costly delays for shippers.
Additionally, the U.K. customs system, CHIEF, is being replaced by an entirely new system. By the end of September 2022, all import declarations will need to be made using the new system, called CDS, and all export declarations will need to be moved over by March 2023. This system upgrade has a significant learning curve, and traders will need to learn the ropes while simultaneously getting accustomed to Brexit-related changes.
With so many high-impact changes on the horizon, traders need to ensure their transportation and logistics partners are up to speed on new regulations and ready to assist them in navigating this new landscape.
“Expertise — not just in customs processes but in freight movement in general — is going to be critical in order for any company to respond to these challenges,” Curtin said. “We are very fortunate at DDC that we’ve got a great team that has extensive knowledge and experience in providing services to customers with both simple and complex customs processes and freight movements.”
DDC is prepared to provide companies with the tools to successfully manage customs movements, including data capture, auditing for customs declaration management and accurate classification of goods using customs tariffs.
Even companies already equipped with the knowledge to navigate these changes may need to scale up their operations to meet the additional burdens that accompany extra customs declarations.
DDC can provide those companies with the dedicated resources to provide stable, sustainable and scalable services to customers and stakeholders.
Click here to learn more about how DDC can help your company manage upcoming trade challenges.
