Tracking Brexit

Time of change brings time for action

While negotiations continue, uncertainty remains on how movements of people, goods, and services in and out of the UK will be handled. Keep ahead of the pack in our latest Brexit update.

Geoff Taylor 13.05.2018

The official Draft Withdrawal agreement

The EU has published a draft Article 50 Withdrawal Agreement on February 28, 2018 – including proposed text for outstanding withdrawal issues. This promptly sparked new discussions, especially around customs union matters and the Ireland border issue. The draft agreement was then passed for review and discussion to the Council (Article 50) and the European Parliament's Brexit Steering Group. The UK in turn published the draft Withdrawal Agreement on March 19 – including agreed legal text for the implementation period, citizens’ rights, and the financial settlement. The UK and the EU negotiating teams aim to finalize the entire Withdrawal Agreement by October. Conclusion: final outcome open.

Official notices with cause for concerns

Until the framework for the future relationship between the UK and the EU is confirmed, previous announcements keep trading businesses on both sides on their toes. The report “Brexit and the future of customs” by the House of Commons, for example, assesses the major HM Revenue & Customs (HMRC) system transition from the current CHIEF to the new CDS. 

It highlights prevailing concerns about the required IT capabilities to successfully manage an expected five fold increase of customs declarations following Brexit. This IT project is in line with the UK’s digitization agenda and was planned before the EU referendum even took place. Brexit certainly adds much undesired pressure and the report makes it clear that it would be “catastrophic” if the new customs system wasn’t ready in time and there wasn’t a viable fall-back option.

Actual impacts on our supply chains

UK trade in goods statistics, released by HMRC in March, show UK exports for January 2018 at £29.3 billion. This reflects a 3% increase compared with January 2017. On the UK import side, total trade in goods for January 2018 was at £43.7 billion – up 12% from the previous month and an increase of 14% compared to January 2017. Focusing on UK trade in goods with EU countries, both UK import and export numbers in January this year were on the up – compared to both, the previous month and the previous year.

Taking a closer look at UK industry sectors, the local food and drink industry, for example, saw record-breaking export numbers overall in 2017. And the aerospace industry – crucial to the UK economy – is looking forward to a rosy future, forecasting 2018 production records, as published the same month.

This makes one thing clear:

More and more goods are moving across UK borders and smooth crossings are more essential than ever to ensure competitive supply chains – before and after Brexit. Companies cannot afford customs barriers blocking their flow of goods in today’s tough marketplaces – and they cannot wait for final Brexit agreements before taking action. They need to future-proof their supply chains now.

What traders need to do. Take action now.

We’ve published an industry survey including action plan measures at the end of last year to support traders in this turbulent time that offers useful tips. One of the key elements of every company’s global trade program today is IT support. 

While Brexit calls for urgent action in many areas now, it also highlights the tremendous dynamism in the area of global trade overall. Companies need to be ready for changes in such an environment – and it does not matter what type of change: New trade agreements, new product classification rules, new international sanctions, or a new government customs system – you name it.

And in the digital age, integrated software solutions form the foundation for both: efficient and compliant global trade operations as well as for the required flexibility to adapt to changes as the environment evolves. We have just kicked off a new research study in collaboration with a university – the online survey is open until 17th June for companies across industry sectors and focuses on digitisation of customs management.

In what shape is your global trade IT system landscape – especially for customs management? Are you ready to handle changes under Brexit – whichever way it will go? Your future success depends on it.

Customs Management with AEB

About the author
Geoff Taylor
Geoff Taylor joined AEB in April 2017 and serves as General Manager in the UK. His writing provides an added value on global logistics trends that directly impact the company’s finances and business development.

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