Ever since the UK voted to leave the EU in June 2016, British businesses have had to deal with many uncertainties. Even as Brexit drew closer, there was little indication of what form it would take, or how trade would be affected.
A withdrawal agreement which kept the UK within the EU’s single market until 31st December 2020 prevented new regulations being created during this time, and a post-Brexit trade deal was finally struck by EU and UK negotiators on December 24th 2020.
This led to new regulations being introduced on the goods that leave the UK, the goods that come in, the paperwork that needs to be completed when transporting shipments, and many other areas.
These regulations have caused difficulties for many businesses, and presented couriers with several obstacles to navigate when entering or exiting continental Europe. All this has impacted on supply chains and led to shortages of certain goods, among other problems.
In this article, we’ll outline 5 of the main challenges that businesses, couriers, and consumers are now facing as a result of Brexit.
- Increased Bureaucracy
Just some of the information which needs to be provided within the new customs documentation includes:
- Which modes of transport (e.g. ferry/train etc.) will be used to take the goods from A to B
- The address of who sent the goods, and who will receive them
- Which ports the goods will pass through when they leave the UK and enter the EU, or vice versa
- The quantity of the goods within each shipment, and their weight
- A description of the cargo, and the packaging used to protect it
- Details on the owner of the courier vehicle, and the vehicle’s nationality
- For some goods, details of all the countries the trailer will pass through before reaching its destination must be stated
‘This is the biggest imposition of red tape that businesses have had to deal with in 50 years’
British Retail Consortium
Delays in the supply chain are expected as there will be new checks on imported and exported goods, including:
- Rules of origin checks
- Food inspections
Meanwhile, the following paperwork will also need to be filled in and checked:
- An export document
- An import document
- A commercial invoice
- A packing list
- ENS/SSD documentation
- GVMS (for transporting goods from the EU to the UK)
- A transit accompanying document (for transporting goods through a third country whilst in transit)
Most checks on goods coming into the UK from the EU will be delayed until 1 July 2021 due to the COVID-19 crisis, although there will still be checks on deliveries of controlled substances such as alcohol and tobacco.
Full controls on British exports to the EU began on 1 January 2021.
‘What has been serially misunderstood by various parts of government is the scale of the complexity for people on the ground dealing with the paperwork’
Road Haulage Association
- Higher Prices
The extra work needed to complete paperwork, check goods, and comply with regulations may make imports more expensive in both the EU and the UK.
Retailers who are used to moving their stock freely around the EU customs union have had to create separate supply chains for the UK. That is costing them more money. Many companies also now face higher costs and increased bureaucracy in order to comply with UK tax authorities.
At the same time, international shipping companies including Federal Express and TNT have said they are levying additional charges on shipments between the UK and the EU.
For example, mail and freight company TNT has said it is now imposing a surcharge of £4.31 on all shipments between the UK and the EU. Rivals DHL and UPS have also taken similar measures.
‘To reflect the incremental cost of customs clearance, we are increasing transportation rates for shipments from UK to EU, and EU to UK.’
Nearly 30% of all the food consumed in the UK is imported from the EU, and delays in the supply chain could cause shortages. With non-perishable items, there had been some stockpiling by UK retailers in preparation for Brexit, but these extra supplies won’t last forever.
Some EU specialist online retailers have said they will stop supplying the UK entirely because of tax changes which came into force on 1 January 2021. For example, the Netherlands-based bicycle part firm Dutch Bike Bits said from now on it would ship to every country in the world except the UK.
‘We are forced by British policy to stop dealing with British customers’
Dutch Bike Bits
- The Northern Ireland Border Issues
Northern Ireland will remain in the EU single market for goods, and unlike the rest of the UK it will continue to enjoy frictionless trade with the EU, with no checks of any kind taking place on the land border with the Republic of Ireland.
However, there will be new bureaucracy within the UK between Great Britain and Northern Ireland.
For example, the EU has strict rules on products of animal origin, such as meat, milk, fish, and eggs, and from January 1st 2021 any of these items which leave Great Britain and enter Northern Ireland (therefore also entering the EU’s single market) must pass through a border control post where paperwork is checked, and a proportion of goods physically inspected.
All shipments from Great Britain to Northern Ireland will also need a safety and security declaration, and a customs declaration from a new IT system which traders haven’t used before.
Retailers are still seeking answers about how to send parcels from Great Britain to Northern Ireland, and some have already suspended deliveries.
‘There is still not sufficient clarity from the Government on what is going to be involved in terms of regulatory and customs process’
MP for North Down