It’s all gone a been a bit quiet recently. The can has been kicked down the road until early August and this is a critical point for organisations that ship goods to and from the EU. Whatever the outcome, the inevitable change of UK premiership may result in an individual with confidence that the UK could trade on WTO rules. This would also mean the re-introduction of customs checks on goods leaving and entering the UK from the EU.

The flow of goods and funds are intrinsically linked because items are rarely shipped without some form of transaction. This is the agreed value of goods sold, however when exiting or entering the UK from outside the EU, duties and taxes are also included in the transaction of funds. This adds complexity because the duties and taxes all need to be additionally accountable, mainly by the receiver of the goods. This is what could be re-introduced for the UK.

Current EU shipping

Goods flow:

  1. Currently within the EU the goods are given the carrier.
  2. Carrier delivers to the receiver.

Funds flow:

  1. The receiver pays the merchant for the goods.
  2. The merchant pays the carrier for the shipping.

WTO rules EU shipping

This is more complicated and involves more steps.

Goods flow:

  1. Goods are given to the carrier.
  2. The carrier presents goods to customs. Duties and taxes are calculated.
  3. The carrier delivers to the receiver.

Funds flow:

  1. The receiver pays the merchant for the value of the goods.
  2. The receiver may also need to pay the carrier directly for duties and taxes that the carrier has paid in advance.
  3. The merchant still pays the carrier for shipping.
  4. The carrier will pay customs duty and taxes in advance so not to delay the flow of goods (above).
  5. The receiver may also need to pay customs directly any duty or tax owed.

Whatever the outcome, to remain competitive organisations have to be ready for this scenario and the best way to ensure you’re ready is to seek independent advice. ERA can assist from carrier pricing to software integrations. Contact Simon Perkins, One of ERA’s Parcel Distribution Experts for more information.

About the Author: Simon Perkins, following a degree in Transport and Logistics, Simon has 10 years experience working within the national and international parcel distribution industry managing major national accounts across many industry verticals for UPS, the largest global parcel carrier.

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