Brexit is done, but it is far from finished. Four-and-a-half years on from 52 per cent of the British public voting in its favour, and after a final, year-long ‘transition period’, the UK left the EU on 31 December 2020. But thanks to a hastily concluded deal on Christmas Eve, those moving goods or people between the two newly separated areas had just one week to prepare before 1 January 2021. So the actual transition is happening now – in real time.
Ian Studd, Director General of the British Association of Removers (BAR), says: ‘Because of a combination of the pandemic with the 11th-hour nature of the deal that was finally struck, businesses were generally far from being ready for these new ways of working – and neither had the required infrastructure been completed to meet the new requirements in place from 1 January.’ As a result, international companies, including movers, have faced a steep on-the-job learning curve, working to keep their businesses moving while they get to grips with an ‘endless list’ of new rules.
With movements between the UK and EU now subject to customs clearance on entry to their destination, some of the key changes that movers have had to understand and put in place include transit documents, pre-planning and advance clearance of travel routes, driver documentation, and safety and security declarations.
Depending on the industry, company agility and preparedness, and the contingencies in place, comments on the early effects of Brexit have varied – from ‘business as usual’ and ‘only minor disruption’ to like ‘tearing our hair out’ and ‘Dante’s fifth circle of hell’ (Guardian report, 31 January 2021). Nevertheless, with ongoing EU and UK pandemic restrictions – plus pre-emptive Brexit stockpiling and the fact that January and February are seasonally slower – reduced trade flows have given a soft introduction, and there will be sterner tests ahead.
‘With many UK and EU individuals not able to move because of restrictions, the new processes will not be truly tested until we see the COVID-19 restrictions lifted,’ says Studd.
Rob Gilbert, President of FIDI Ireland and owner of Oman – Beverly Smyth, agrees. ‘With volumes currently low, there is a sense of we’re only just getting into this. There’s a sense of trepidation,’ he says, adding that his company is already managing significant additional administration, time and cost.
Gilbert quantifies the potential size of the increase in customs administration in staggering terms. ‘Customs dealt with approximately one million transactions in January last year. This year – which is a pandemic year as well – they anticipate 28 million transactions,’ he says. ‘So, we’ve gone from almost nothing to now – and brokers not wanting to take on new clients.’
The growth in customs admin is just one part of the delivery chain that, overall, has been substantially lengthened for those on the ground. Tony Tickner, Managing Director – The Euro Group International Limited and Chairman of MTC a division of the BAR Overseas Group says: ‘There is now an eight- or nine-step process for getting out of the UK into Europe, and vice versa coming back to the UK, over and above what we used to have.’
He says Brexit has added around eight to 15 per cent onto the cost of an average move, depending on the destination country, on top of extra office administration, time and cost.
‘You need to look at the costs really seriously because the administration is quite heavy and it’s causing quite a bit of pain, even with the limited volume,’ says Gilbert.
Training staff in the new processes and customs requirements will cost money, too, says Studd, but it is a must. ‘As these particular transactions are completed almost exclusively via road service, both the EU and UK require the vehicle movements to be registered with multiple agencies to access permits and/or authorisations to enter ferry ports and to obtain correct transport documents,’ he says. ‘This clearly makes it necessary to retrain administrative and operational staff in the workings of those new processes, and to understand the function of the different documentation.’
While trade associations, such as FIDI, FEDEMAC and BAR, have provided a focal point for members’ questions about the new regulations, getting answers from officials hasn’t always been straightforward, says Studd. ‘We have had daily enquiries from members – but authorities don’t necessarily understand the answers,’ he says. ‘We’ll get a response, but often a holding response.’
With those in charge learning on the job, too, clarification is still needed in many areas – the requirements for change in residence certificates, limitations on driver deliveries per journey, and cabotage rules are just three of those mentioned to FIDI Focus. Gilbert adds that his company has had to ‘aggressively pursue’ information for their customers.
Helen Pertoldi, Relocation Coordinator at Abels Moving Services Ltd, says explanation is needed in other areas of the delivery chain, too. ‘Removals companies who are not sending trucks out to Europe themselves need to be managed – we are constantly getting agents asking for last-minute bookings on our trucks, then getting irate when we say we can’t book them on our trips until they have all the documents in order,’ she says. ‘Some are even arguing with us about what documents are required.’
According to Sarah Laouadi, European Policy Manager of Logistics UK (previously the Freight Transport Association), says clear and ongoing dialogue throughout supply chains is vital. A survey of the organisation’s members showed a lack of coordination between different parts of a supply chain ‘led to significant problems’, she adds. ‘Of those who experienced customs-related issues, the overwhelming majority reported an element of misunderstanding or miscommunication on the part of their partners.’
Tickner says transparent communications with clients is vital so that they understand how and where new costs are occurring. ‘Manage your customers’ expectations,’ he says. ‘Let them know the process, what we’re going through, and what our vehicles and crews are going through.’
With significantly more time-consuming and often complicated admin to do, customers also need to appreciate that movers will be charging more for the new services. Studd says: ‘The additional costs incurred by the business, relative to time and resource, are significant, and all movers will absolutely need to reassess the cost of providing the service. The movement of household goods to and from the UK/EU now includes a new tier of service, and, unfortunately, those costs will need to be covered by the consumer or corporate client.’
Tickner adds that movers’ skill sets have often been undervalued, but, after Brexit, they must be bold about charging for service and expertise. ‘For too long, we have been looked on as a low-skilled industry – and we’re not: the processes we go through, the customs and authorities we deal with, and the scale of our operational staff,’ he says. ‘We shouldn’t be frightened of charging properly for these services.’
Previously, even ‘man and van’ operations could execute a move in ‘a free-flowing, almost domestic market’, but Brexit has raised the level of entry, says Gilbert. Now that goods and services are moving between two separate jurisdictions, the additional knowledge needed is likely ‘to make the professional moving company, with a structure – such as a bond and AEO [Authorised Economic Operator] status – more reliable, relevant, in demand and valuable to the transferring client’.
In the short- to medium-term at least, says Studd, this may lead to a narrowing of mobility supply chains between the two areas.
‘We may see a downturn in the number of moves transacted as companies adjust to the new rules,’ he says. ‘Some businesses are going to look at this process and say “do you know what? This is too much trouble and we’ll leave it to those who specialise”.’
Studd expects corporate moves to remain healthy, with UK-based companies moving some or all of their operations to mainland Europe – something already evidenced by recent announcements of relocations out of London’s financial district and other business centres.
For now, movers who are already finding their way in the post-Brexit environment have some practical advice for those about to do the same.
‘Plan, plan, plan’, says Gilbert, who advises that movers should also train their staff; consider becoming AEO-certified, securing a transit bond, and forming an alliance with a customs-bonded warehouse provider.
Philippa Robinson, Director at Robinsons Relocation, adds: ‘Being prepared, with all documentation, and realistic with timescales, is of paramount importance.
‘Vehicles need to be secure and checks made on a regular basis, with a checklist every time you load or unload. Any duty should be paid before the goods arrive, to avoid delays. Collect destination forms before departure and wait for the green light from the destination clearing agent.’
As volumes surely start to increase, having the right documents is crucial to avoid hold-ups, she adds. Failure to comply with the regulations will impact on costs and upset customers.
With the proper preparation, Laouadi says, there is no reason for delays at borders. ‘The challenge we face now is to make sure this continues to improve and that the extra complexity we’re about to see in April and July – when the UK adds more import requirements – doesn’t upset the new trading environment. We have to work, collectively, very hard to make sure we overcome that.’
Indeed, while it may feel all uphill now, those who put in the effort may find benefits around the corner. ‘I’m an optimist, and I think Brexit will create opportunities for those companies that want to engage and invest in compliance and service excellence, making allowances for the stringent measures in place,’ says Robinson.
Studd adds: ‘The market will inevitably adjust as the new normal becomes accepted and understood practice. That practice may take a few weeks, or even months – but we will get there.’
The groupage issue
FIDI’s recent webinar, The road ahead: relocating between the EU and the UK after Brexit, asked panellists if sending groupage shipments – several consignments in one container – via the UK is still financially worthwhile.
Groupage shipments moving through the UK had already reduced significantly after 2015, when a new directive was introduced stating that duty and tax-free relief could only be granted in the country of destination, rather than in the UK. However, the additional administration and cost that has been introduced with Brexit – possibly of up to 40 per cent per small groupage shipment – may all but finish this part of the market.
‘Companies are going to look a little bit closer and ask is it cheaper to put something into a groupage container, or to send it direct to that country of destination in Europe as LCL,’ says Tickner. ‘They’ve also got to look at the additional transit time because of the new processes – and custom clearance in the destination country could cause further delays. In my view, many of the smaller shipments are now not viable to send via the UK.’
Studd agrees: ‘That particular market operates because it’s the most cost-efficient, effective way of moving smaller consignments. There are now extra levels of complexity, which is going to add cost – which defeats the object of sending it groupage in the first place. So, I think that market is probably not destined to grow in the UK.’
Brexit – a selection of the key changes for movers to consider
- UK to EU transit documents (T forms) must be issued for travel from the point of departure.
- Transit routes must be declared before travel, with customs documents for each consignment.
- Transits between the UK and the EU are no longer governed by the EU Directive on the free movement of goods and services. They are now treated like those with other countries, so require full customs clearance.
- Drivers need insurance green cards and country-of-origin identification (GB stickers for UK drivers).
- A Master Reference Number (MRN) is also needed – this will be scanned at the border for a truck to pass through.
- A safety and security declaration is needed in advance.
- Drivers must visit a clearing point at destination with a T1 form before they deliver their goods.
- There are rules on the number of pets permitted in a move.
Brexit – key vocabulary
- AEO: Authorised Economic Operator
- Cabotage: a French word meaning the transport of goods between two places within the same country
- CMR Note: Consignment note with a standard set of transport and liability conditions
- ECMT permit: European Conference of Ministers of Transport
- ENS: Entry Summary Declaration – a pre-alert to the border post through which goods will pass
- EXS: Exit Summary Declaration – also a pre-alert to the border post
- GVMS: Goods Vehicle Movement Service
- HMRC: Her Majesty’s Revenue and Customs (UK)
- URN: Unique Reference Number, given by customs to a shipper if their TOR application (see below) is approved. It must be given to the clearing agent. Warning – this does not mean a shipment has cleared customs
- SSD: Safety and Security Declaration
- T1/T2: transit forms used for moving goods that have yet to clear customs in their country of destination
- TOR: Transfer of residence – UK customs application to bring your goods to the UK duty and tax free
- TSS: Trader Support Service – used for movement of goods between the rest of the UK and Northern Ireland
You can see the full recording of the FIDI Focus webinar at https://youtu.be/KXfRp4YYqFI?list=PLOXR1Q48hstRQ6t1vl1nwHsS7Zu1TTfvS