Will Brexit mean anarchy in the UK?

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With huge changes in international trade caused by Brexit and the implementation of the Customs Declaration Service (CDS), all eyes will be on Birmingham next June with the 12th Multimodal being held at the NEC, writes Stuart Flitton.

Among the many challenges forwarders are facing is the impending launch of CDS, which will replace the existing system for customs declarations in the UK.

The Customs Handling of Import and Export Freight service (CHIEF) is one of the world’s largest and most sophisticated electronic services for managing customs declarations. However, it is nearly 25 years old and cannot be easily changed to meet new requirements under the Union Customs Code (UCC).

“There are some concerns about the readiness of the new system,” says British International Freight Association (BIFA) director-general Robert Keen. “We are working hard to provide companies with greater understanding of what CDS is, why it is being introduced, how it will impact their businesses, and when the system will be fully launched.”

He added that there are still a lot of unanswered questions about what will be required from the freight industry and the issues faced by companies that make customs declarations, which will need time to adjust their internal computer systems to accommodate CDS.

As well as the introduction of CDS, which relates to trade outside the EU, there will also be discussion at Multimodal 2019 about Brexit.

Keen said: “There remains a great deal of uncertainty for UK freight operators and their customers. Clearly, the implications of Brexit will vary across freight modes and types of freight. The huge uncertainty on how trade arrangements and supply chains will change post-Brexit is making many freight forwarders nervous about the future.

“It really is time for the UK Government to give a clearer explanation to businesses and the wider country as to what kind of long-term trading relationship it is looking for.”

A happier topic of conversation will be the backing of MPs for a third Heathrow runway.

“BIFA believes that an expanding global hub airport, with increased capacity for air cargo, will assist importers and exporters to establish new trading partnerships and support existing ones,” Keen says.

Freight forwarders are facing increasing competition than ever, with many logistics companies now providing forwarding and NVOCC type services.

“Of course, everyone is talking about how even Amazon is getting in the game as well,” Keen adds.

Another area likely to be covered at Multimodal is the tender management process.

“A big part of most forwarder’s business comes from responding to tenders. Because the volume of these bids is so high, and each is usually so complex, they are a big drain on resources. Smart forwarders are focused on improving their process to make sure they are bidding accurately and fast, but also on the best types of business for them,” Keen says.

Clarion Events, logistics portfolio director Robert Jervis, which is organising Multimodal 2019 for BIFA, says the conference will be bigger and better than the recent 2018 event.

“There will be an increase in content specific to supply chains and for the future direction of logistics, as well as a focus on digitisation, blockchain and technological developments,” Jervis says.

Despite the slight softening of the UK freight market in the first few months of this year, partly as a result of the shift in sterling/dollar exchange rates that slowing overseas demand for British goods, Virgin Atlantic Cargo managing director, Dominic Kennedy, remains upbeat about the prospects for the rest of this year.

This comes on the back of a record year for volumes for the airline which carried 230.5 million kg, a five-year high, with revenues climbing nine per cent year-to-year to £199.6 million.

“We set a fairly ambitious target for 2018 and we’re on track to achieve our goal,” Kennedy says.

“Our revenues from the UK are up, both to our combined US routes as well as on our direct services from London to destinations including Johannesburg, Lagos, Hong Kong and Shanghai. We’re also seeing positive growth in our UK-Caribbean revenues.”

Virgin Atlantic’s pharma volumes grew by 50 per cent year-on-year, boosted by the opening of its new JV Pharma Zone with Delta Cargo at Heathrow and the recent confirmation of the airline’s GDP (good distribution practice) compliance for the facility and its global headquarters.

The airline is focussing on greater simplicity, digitisation and leveraging its partnerships, notably with Delta Cargo. The two airlines now offer around a quarter of all transatlantic cargo capacity.

“We can see a great opportunity for technology to modernise our business. It’s an exciting challenge in terms of the potential to remove paper, modernise and automate warehouses, and deliver self-service for our customers,” Kennedy says.