by Richard Price, Fruit Marketing
Coronavirus has dominated most of 2020. Some sectors have been affected more than others, but all businesses have had to adapt to changing government guidelines, lock-downs, tiers and changing consumer behaviour. In particular, a rise in online shopping with home delivery.
At the same time the UK has been moving through the transition period of Brexit with the 31 December deadline looming.
The challenges of both may seem daunting and the implications far-reaching, but there is help and support available.
The E-Channel project is one such source.
Its aim is to provide a joined-up package of support for SMEs looking to enter new markets using e-commerce, either within the UK or cross border – by means of practical consultancy and a unique data management control platform.
Having been approached to support the project at its inception, I’m delighted to be helping the E-Channel team to produce a series of articles with advice and key considerations for those considering cross-border trade post Brexit, as well as those considering how to scale up their response handling and fulfilment (RHF) to support growth in e-commerce.
See below an outline of what we’ll cover:-
Brexit & cross border trade
• Introduction and an overview of what to consider:- cross-border processing (deal or no deal), workforce & business travel, contracts, duties, currency, data, intellectual property.
• Change to border processing requirements – exports, imports, small packages, bulk packages.
• Who does what; in-house V outsource. The transporter’s (ferry operators) perspective.
• Other considerations:- business travel, contracts, special/hazardous categories, taxes and duties (with update from deal/no deal situation), with useful sources of further information provided throughout.
Response handling & fulfilment
• Introduction and a summary of what to consider:-planning for growth and new market entry
• Customer experience and the importance of RHF
• Planning RHF/in-house versus outsource
• Do’s and don’ts from a RHF specialist perspective; other considerations such as data and the e-commerce directive
Brexit and cross border trade – an overview of what to consider
With the Brexit deadline approaching, organisations trading with EU partners should be well advanced in planning for changes to their business.
Deal or no-deal, there are potential ramifications across many aspects – in particular to supply chains, operations and customer base. Here are some key considerations:-
Cross-border trade – are you ready for the red tape?
From 1 January you’ll need to complete customs procedures for exports to EU countries, and there’ll be a phased approach (January to July 2021) for imports from the EU to UK. Do you have the capability and capacity to handle this work?
Do you have an EORI number? Do you understand product classifications, licenses and likely tariffs? Is your carrier (haulier) equipped to make safety and security declarations? What about source origin of product? Will there be delays at the ports? What about VAT?
If you don’t have the resource or expertise to handle this in-house, there are intermediaries who can help (customs agents, freight forwarders or couriers).
They’ll be more on this in the next article.
For more see https://www.gov.uk/transition
Workforce and business travel
If you employ EU citizens in the UK or vice versa, how will your current and future recruitment plans be affected? Will changes to professional qualification recognition affect you? What is settled and pre-settled status and how do people apply? How do I sponsor job offers to EU citizens? What about remote/home working across the EU?
If you’re travelling to the EU on business, it’s visa-free for up to 90 days in any 180 day period. You’ll need at least 6 months on your passport and adequate travel insurance to cover healthcare, but your passenger rights remain unchanged whether travelling by air, sea, train or tunnel. If you’re driving you may need an international permit for certain countries, you’ll need a green card from your motor insurer and a GB sticker. Mobile phone operators have said they don’t plan to change their roaming policies and the government has set a billing limit of £45 per month meaning you actively have to choose to continue spending beyond this.
Currency, contracts, duties, insurance, data and intellectual property
Do you need to review currency arrangements to reflect the UK leaving the EU? If you are exposed to variations a deal/no-deal may affect these, so you should consider currency hedging.
Do your contracts with suppliers or customers reflect changes to regulation, territories, border controls etc? What are the ramifications of delays at the border?
On duties, what tariffs can you expect to pay on imports or exports? Can you reduce the amount of customs duty you pay?
Have you checked your insurance to take account of any changes to transport or warehousing?
On intellectual property, EU registered trademarks will be converted to UK equivalents from 1 January 2021, but new applications will need to be made to both EU and UK territories.
On data, even though GDPR is an EU law, the UK plans to operate the same legislation in the UK (albeit with the opportunity to review it in future), – so there should be little change here.
The bottom line
Will your cross-border market grow or remain strong post Brexit? Does your business have sufficient margin to cover the additional costs of the new processes for cross-border trade?