🚢This has been happening for the last few months: ships at anchor waiting, shipping lines cancelling orders and diverting, largest shipping lines refusing to accept new bookings
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In the UK, this just the beginning - soon to be accompanied by the perfect Brexit storm.
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It was not the shock of the pandemic that sent shockwaves across the entire logistics industry but the rebound of trade in recent months.
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Remember listening to the lovely guy in charge of the LA port (large container port) back in April and May (webinar with @JanHoffmann_gva). He was almost surprised that everything was functioning well and disruptions were minor.
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Well, increased demand, combined with the second wave, container shortages in certain places, further disruptions to supply chains all this means moving boxes between now and January won't be easy.
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Just as a reminder - without a freeze/ implementation period or some sort of derogation - no business on either side will be able to use the UK-EU FTA to avoid paying tariffs on 1 Jan even if we get one tomorrow.
It's already too late.
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Businesses simply won't have enough time to familiarise themselves with rules of origin, figure out whether their products meet them (larger companies have hundreds of SKUs) and understand what the certification requirements are.
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It is expected that companies would be able to self-certify origin under the UK-EU FTA but that is not always that straight forward and sometimes requires prior steps.
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And the long-awaited criteria for the determination of goods at risk / not at risk of entering the EU market for GB- NI movements (we've been talking about this one for over a year!)
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With the PM in Brussels, here is another reminder. On the deal vs no deal. And borders.
We need a deal. It’s in everyone’s interest. It will reduce tariffs (perhaps even full tariff/quota-free) and offer a range of other simplifications. BUT everything will still change
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One albeit (over)simplified way of looking at it is 👇
You have a border and what happens behind it.
⏺️Border barriers (friction, formalities, tariffs) and
⏺️Behind the border measures (regulation, alignment, cooperation etc)
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On the border barriers front, a deal would remove tariffs.
That's pretty much it.
Plus perhaps some additional simplifications, derogations (maybe some on SPS stuff depending on how far both parties want to go).
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A trusted trader scheme for GB - NI movements to avoid tariffs. Exit declarations from NI to be done by collecting data from transport and ferry companies.
On exit declarations, it's doable, the information will be there. I'm still not convinced that the UK Gov won't at some point need more info (i.e. that this is sustainable) but this is a compromise - no paperwork but some data collection.
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I'll wait for further details but it seems like the way the JC has dealt with the famous "at risk" category of goods was by going around it and putting in place a trusted trader programme?
More to follow once we hear from CDL/ see the release
1⃣ Hopefully it's obvious how important it is for businesses to understand which goods will be subject to tariffs (the goods at risk question). However it's starting to be less and less relevant as time goes by
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Whatever the "at risk" logic will be companies will need to provide some sort of proof that their goods/consignments meet the criteria.