Case study
DPD and AEB win prestigious supply chain excellence award
DPD scooped the Supply Chain Excellence Award for Operations, Best Use of People and Process – together with its partner AEB. Find out how they made it happen.
09.11.2021
Facing unprecedented challenges after Brexit head-on
Anyone can manage a perfect supply chain in a vacuum. But when the environment it operates in becomes challenging, that’s when true excellence comes to light. With free trade between the UK and the EU previously in place for over 40 years, the shock to UK cross-border supply chains could not have been greater since January 2021, when Brexit finally took effect. This landscape adorned with a new and complex regulatory framework subject to frequent changes and the introduction of new governmental systems is the backdrop of the story of DPD and AEB. A story that reflects a joint effort and a truly collaborative partnership that resulted in a brilliant supply chain achievement.
DPD’s smooth flow of EU shipments to and from the UK following Brexit has been setting an example for businesses across industry sectors – many of which still struggle greatly to manage efficient UK-EU and EU-UK goods movements. This success was ultimately driven by the combination of timely and thorough planning, full dedication by the people involved at all points of DPD’s complex cross-border logistics, and importantly, a custom-tailored and innovative solution design that is underpinned by powerful and integrated technology.
A great achievement that was awarded with the Supply Chain Excellence Award in the category Operations, Best Use of People and Process at the official awards ceremony on November 8, 2021.
DPD, Super Hub, Hinckley, UK
©DPDgroup, Super Hub, Hinckley, UK
About DPDgroup
- Leading parcel delivery network
- 97,000 delivery experts
- More than 58,000 pickup points worldwide
- 1.9 billion parcels delivered worldwide in 2020
- €11 billion turnover in 2020
Tailored: How to shine when the going gets tough
Getting started while others waited
Tailoring solutions to market needs
The UK referendum on Brexit took place in June 2016, but it was only in 2017, when the truth about impacts on UK-EU cross-border trade started sinking in. This was aided by media headlines such as the Financial Times report on an estimated fivefold increase in UK customs declarations. And the first UK government whitepaper on the future relationship between the UK and the EU that was released in 2018 (“Chequer’s plan”) then made things crystal clear: Customs procedures would become a reality – trade between the EU and UK would never be the same and significant red tape would be involved after Brexit.
At this point, a stubborn “wait and see” approach started to paralyse the UK business community. But not DPD and AEB. Both partners’ approach to changing market requirements and evolving customer needs had always been characterized by foresight. And it was that year, in 2018, when DPD kicked off its Brexit project together with AEB. One of the reasons that DPD opted for working with AEB on this massive project was the approach to a possible solution design: rather than suggesting an existing off-the-shelf Brexit-ready software and building the logistics and new customs processes around it, AEB proactively proposed a custom-tailored approach to redefining DPD’s EU-UK and UK-EU movements of goods. And to jointly develop an out-of-the-box technology-fuelled process with DPD’s brand new international gateways in the UK and the Netherlands at its heart.
DPD and AEB experts from field to management came together to jointly develop the very best concept to make things work for DPD’s EU and UK customer base – including both seasoned exporters who would be facing new and unparalleled customs declaration volumes and those completely new to customs. That year, UK exports to the EU amounted to 288.9 billion, accounting for 45.6 % of the UK’s total exports. Imports from the EU were at 353 billion, 53.1 % of total UK imports. While a large share of this comes from large companies, 99% of the UK business landscape is made up of micro, small, and medium sized businesses. And a total of about 145,000 businesses of these only ever traded with EU companies and never had to deal with customs procedures before Brexit.
Serving businesses of all sizes and across all sectors, DPD and AEB took those facts and figures very seriously from the get-go. Both knew very well that the industry would need strong logistics and technology partners to get through the shock of Brexit once it became a reality. No matter how often the Brexit deadlines were extended and how long the Transition Period would last – DPD and AEB knew the shock would come. And that an extraordinary solution would be needed to cushion the blow.
What the panel of judges of the award said
“This project was a clear demonstration of fast-paced solution design underpinned by collaboration to respond to significant complex changes in regulatory requirements. The process redesign was achieved through close working between parties who were determined to unblock any blockers and their tenacity came through really strongly.”
"Around 145,000 businesses had never even managed customs procedures, so this project was about moving 45 million parcels between the UK and the EU with no more than 40 seconds to handle each parcel. This was a solid solution to cope with Brexit – it identified problems in the national system and was able to tell them that they had a problem. Overall, we thought this was an excellent, adaptive project with unmovable time-frames."
DPD and AEB: How it's done and what's involved
Companies and private shoppers that only stand at the receiving end of post-Brexit cross-border logistics often don’t appreciate the devil in the detail involved. You pick up the goods in the EU, you transport the goods across, and you deliver the goods in the UK. How hard can it be? Well, it’s rather complex in fact – especially, when a completely new customs border is involved, the government is rolling out new customs systems at the same time with changing timeframes and technical specifications, and customers are not familiar with the new type of data sets they need to provide.
And deliveries must happen fast, too – the space DPD operates in is not called “fast parcel services” for nothing. Real-time shipment status must always be available, too, of course – this has become an industry standard a long time ago, one that DPD has always excelled at. And DPD is getting it done. All of it. Before Brexit and after – from day one. And the receiving end – businesses and shoppers alike – enjoy the same efficient service as they always did, leaving them to wonder whether by some miracle, Brexit may have skipped DPD. While in fact, DPD “simply” mastered it – together with their software partner AEB.
Planning
As mentioned before, DPD and AEB were already in the middle of solution design developments in 2018 when most businesses were still in “wait and see”-mode. The concept of smooth EU trade across UK borders not only had to ensure that involved supply chains run like clockwork but do so in a cost-effective manner that ensures to minimize operating costs for DPD customers who experienced (and still do) various Brexit-based financial impacts that they need to compensate.
Infrastructure
Two new distribution centres were added to DPD’s network and delivery depots – “international gateways” located in the Netherlands and the UK, dedicated to import and export processing of EU-UK and UK-EU shipments subject to new customs procedures. Working in empty new warehouse spaces, DPD and AEB project managers mapped the ideal workflows for the future highly automated environment – with tapes on the ground and empty boxes: testing real-life scenarios with the brand-new warehouse management solution tailored to fast parcel carriers’ needs and cloud-based import and export filing software by AEB to process expedited goods receipt and put-away, customs declarations, and goods issue in line with customs releases.
People
To support the significant red tape for all shipments to and from the UK and the EU, DPD invested in strengthening teams and stocking up customs expertise as part of the operations workforce. While IT and systems are crucial for success, the area of customs is a thicket of rule-based details that is too hard to navigate as a service provider without the right number of experts.
Processes
DPD and AEB spent many a long night defining every scenario of every type of EU shipment that crosses UK borders from both sides. Including automated data enrichment for declarations and catering for returns processes, of course, because a significant and continuously increasing volume of fast parcel traffic is subject to returns. Automation, speed, and customs compliance stand firmly at the core of all new processes, ensuring efficiency and speed in line with all applicable government rules, restrictions, and involved systems.
Technology
UK government systems involve HMRC’s CHIEF, CDS, NCTS, and GVMS. In addition to electronic import and export declarations (including bulk import declarations), electronic safety & security declarations and port badges form part of the new UK cross-border processes. DPD’s operating systems and delivery tools including driver and warehouse scanners work smoothly together with AEB’s integrated solutions in both new DPD international gateways in the UK and Netherlands:
Once shippers’ data has been collected, the following processes run largely automated for warehouse management, import filing and export filing including automated and intelligent data enrichment for product classification, electronic customs processing, automatic goods releases upon VAT and duty payments and customs clearances, and efficient returns. Seamless and automated data exchange with government customs systems and port operators forms part of this – ensuring a steady flow of shipment and customs data that feeds back into DPD’s operating systems without delay. This forms the basis for continued fast deliveries and real-time status including the new customs milestones.
How great team effort and collaboration led to success
From project start to go-live on the first day of Brexit in January 2021, this joint project by DPD and AEB has enjoyed top prioritization, full management support, and commitment. The companies formed tightly knit teams characterized by close collaboration that extended to and involved government operators.
The benefits of this close collaboration beyond the boundaries of DPD’s and AEB’s organizations became especially clear when the UK government experienced a system failure with their NCTS (new computerised transit system) in the first two weeks of January 2021, which affected all UK transit goods movements – including those of DPD. Rather than sit back and wait for the authorities to fix the problem as most industry players did at the time, the teams at DPD and AEB worked tirelessly with government operators to resolve the issue together – on project and management level and literally 24/7 – until it was done.
This collaboration and out-of-the-box-thinking empowered DPD and AEB to tackle the unprecedented landscape after Brexit and enabled an innovative approach for the development of completely new and tailored workflows and solutions. This resulted in DPD’s continued excellence and speed in service that their customers are used to. Hard to beat indeed.
“We’re very proud that our great achievement was officially recognized at the prestigious Supply Chain Excellence Awards. It’s been a fantastic team effort to implement the powerful solution and streamlined operation that underpin DPD’s UK cross-border services since Brexit.”
Alfie Luker, Head of International Services, DPDgroup UK and Geoff Taylor, Managing Director, AEB (International) Ltd
Supply Chain Excellence Award Winner DD and AEB
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