BIFAlink is BIFA's monthly magazine covering issues of importance for the logistics and supply chain industry.
How to verify establishment BIFA link The magazine of the British International Freight Association May 2023
n Spring Budget 2023: Customs concerns n New YFN committee members step up n Killick Martin has all the answers with data tool
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Steve Parker’s Column
Who is your biggest critic?
BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266 Web site: www.bifa.org E-mail: bifa@bifa.org (A company limited by guarantee. Registered in England: 391973. VAT Registration: 216476363) Director General Steve Parker s.parker@bifa.org Executive Director Robert Windsor, Policy & Compliance – Surface & Legal r.windsor@bifa.org Executive Director Spencer Stevenson s.stevenson@bifa.org Executive Director Carl Hobbis c.hobbis@bifa.org Member Engagement Manager Denise Hill d.hill@bifa.org International Relations Manager Robert Keen r.keen@bifa.org Policy & Compliance Advisor – Customs Igor Popovics i.popovics@bifa.org Policy & Compliance Advisor – Air David Stroud d.stroud@bifa.org Editorial Co-ordinator Sharon Hammond s.hammond@bifa.org Communications Manager Natalie Pitts n.pitts@bifa.org Membership Supervisor Sarah Milton s.milton@bifa.org Published by Park Lane Publishing peter@parklanepublishingltd.com Contributors Steve Parker, Robert Windsor, David Stroud, Spencer Stevenson, Carl Hobbis, Sharon Hammond, Natalie Pitts, Igor Popovics, Brooke Neilson, Nezda Leigh, Robert Keen Note to media: If you wish to use items in this magazine that are older than one month, please contact the editor to ensure that the item in question still reflects the current circumstances. Please be advised that BIFA DOES NOT OFFER LEGAL ADVICE. BIFA is not a law firm and the authors of this publication are not legally qualified and do not have any legal training. The guidance and assistance set out herein are based on BIFA’s own experience with the issues concerned and should not be in any circumstances regarded or relied upon as legal advice. It is strongly recommended that anyone considering further action based on the information contained in this publication should seek the advice of a qualified professional.
My answer to the above question is my wife, Julie! Although she supports what I do and BIFA, she sometimes does tell it as she sees it. On that note, she was quite clear that April’s column was not as good as the earlier ones. In her opinion it was too long and not easily understood by someone not in the industry! So what, I thought (not brave enough to say anything), this is an industry magazine, it is supposed to be for those in the industry. That said, she had a point. What I have seen in my first four months at
BIFA is that so much of what we do is either engaging with people outside the industry to encourage them to join it or taking legislation that is often complex and making it accessible to and understandable by our membership. With those things in mind, going forwards with my monthly column I will cover the key topics as best I can and be both concise and try to avoid industry jargon. Freight Development Pathway I am proud of the work we have done with Manpower on the Freight Development Pathway. By way of a reminder, we take people who have not been in our industry before and give them three weeks of training in both work practices and industry specific requirements. We started in January this year and have already seen BIFA Members recruit some of the individuals who have completed the pathway and obtained greater industry awareness. Interestingly not everyone finishes the programme; some realise that this is not a sector for them, but this therefore reduces the risks to our Members of employing someone who is not going to be the right person. Customs matters My goodness there are a lot of topics regarding Customs. We have several articles in this edition, all worth a read. Whether you are interested in Transit, the Single Trade Window, Border Target Operating Model, or the Windsor Agreement, we cover them all and provide some useful insight. Member engagement One of the areas I am particularly passionate about is how we support our Members and with that in mind April saw some notable developments. Denise Hill joined us at the start of the month as our newly appointed Member engagement director, which is a key element in our strategy to constantly improve engagement with all our Members. A press release has been issued and more details of Denise’s role will be covered in next month’s BIFAlink . Meanwhile, I am pleased to advise that Andrew Melton will be joining us later this year as our regional representative for the North of England. You will be reading more about this in a future issue, but this vacancy has been outstanding for some time, so we welcome Andrew’s appointment. Finally, and again with representation in mind, we are busy making plans for this year’s Multimodal Exhibition and Conference at the NEC from 13-15 June. It provides an important platform to network with Members and showcase what BIFA is doing to address the current challenges faced by our Members and the supply chain and logistics community they serve. It is an event not to be missed and is completely free to visit. Simply register in advance to get your badge, print it off and walk straight in. I look forward to seeing as many of you there as I can. If, during your visit, you want to talk to me about your own biggest critic, there is a little place on the BIFA stand we can go!
Steve Parker Director General
May 2023 | 3
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BIFA News
Global air cargo volumes slip back 6.7% in 2022 Ian Matheson, from Impress Communications, reviews some recent news that might impact on Members’ business
IN BUSINESS The organisers of Multimodal 2023 have published the shortlist for the show awards, with voting for the finalists now open and a deadline of 26 May for all votes to be cast. Winners will be announced at the awards dinner, hosted by TV personality Vicki Butler- Henderson, on 13 June 2023 at the NEC’s the Vox. Criminals are adapting to inflation and lessened port congestion and evolving more fraudulent methods of targeting specific goods, says a new report from partners TT Club, the Transported Asset Protection Association’s Europe, Middle East & Africa region (TAPA EMEA) and BSI SCREEN. Intelligence shows an overall decline in global incidents over the previous year, but with an increasing emphasis on basic goods, food and beverages, fuel and auto parts linked to the inflationary effect on the value of such items. At the Sustainable Supply Chain Conference, which takes place on the 10 May at 30 Euston Square, London, attendees will learn how they cav ‘go green’ throughout their end-to-end operations, from procurement, operations, retirement and data and communication, considering the environmental and human impact of their products’ from cradle to grave, say the organisers. Correction Despite multiple proof-reads, errors do still occur and BIFA would like to apologise for any confusion caused by the headline on page 10 of the April printed version of BIFAlink that introduced a brand new initialism by merging NCTS5 with ICS2. The error came to light after printing had commenced but the online digital version has been corrected.
IN THE AIR According to the latest estimates from Airports Council International World, global air cargo volumes decreased by 6.7% year over year in 2022, reaching a total of 117 million tonnes. Hong Kong International Airport remained in the top position for international freight loaded and unloaded in tonnes. April saw the cargo division of International Airlines Group (IAG) restart daily cargo services between London- Heathrow and Shanghai Pudong International Airport, after almost two years. As China reopens its borders to tourists, services between
London-Heathrow and Beijing Daxing Airport are set to resume at the start of June, with four flights each week. ON THE OCEAN Uncertainty over space on the Asia-Europe container shipping trade in 2022 has given way to uncertainty about demand in 2023. Those involved in the European import markets are divided over when an expected inventory recovery will occur, with some seeing the problem being ocean schedule reliability on the Asia-Europe trade. This stood at just 52% in January, up significantly from the low levels of the past year, but was still below a level
where shippers would feel comfortable about reducing buffer stocks. The expected tsunami of container vessels sold for demolition is evaporating, international media reported in mid-April with liner operators seemingly intent on chasing market share, despite the correction in freight rates. They are continuing to charter boxships, pushing up charter rates and dissuading owners from scrapping more ships. Five shipping bodies – the Cargo Incident Notification System (CINS), Confidential Human Factors Incident Reporting Programme (CHIRP), Container Owners Association (COA), International Cargo Handling Coordination Association (ICHCA), and Ship Message Design Group (SMDG) – have joined forces in a bid to make the transport of lithium-Ion batteries more safe. They say they will take advantage of unified information and data sources to bring greater awareness and understanding of issues with the goal of producing preventative output. OVERLAND Intermodal freight transport in the EU still cannot compete on an equal footing with trucks, says a report published by the European Court of Auditors (ECA). It states that regulatory and infrastructure barriers need to be addressed if the EU is to achieve its green ambitions, as road remains the most flexible and often the fastest and cheapest way to deliver goods within the EU, despite the fact that trucks are major polluters. A shift to rail or inland waterways could play a key role in greening freight transport, it says.
4 | May 2023
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BIFA News
London Freight Club elects its fi rst lady chairman
About the London Freight Club The London Freight Club dates back to 1952/53 when it was formed as a club for executives within the liner industry. Today it has grown into a well-known vehicle for members of the shipping and freight industry to network within a pleasant social atmosphere. Choosing to stay focused on the good of the industry and its membership, the LFC offers a forum for its
FREE EVENT Employing apprentices – the secret to success BIFA has launched a new monthly online event for Members that will assist in navigating the perceived red tape around recruiting apprentices. Carl Hobbis, executive director at BIFA, who is responsible for apprenticeships, said: “With most of our Members being SMEs and following our own experience of employing our first apprentice, we thought it would be a good idea to share our own journey to help Members. “As an SME ourselves we were nervous at first, but like many things which seem daunting, it was quite easy. “So, we want to encourage the 1,400 plus BIFA Members who are SMEs to do the same and hopefully give a young person an opportunity in logistics.” The event, which lasts 45 minutes, will cover: • Costs • 10 tips for employers • Recruitment • Interview tips • Onboarding • School engagement. Hobbis added: “I host the event, but you will hear first- hand from communications manager Natalie Pitts and our apprentice Brooke Neilson who will share their experiences.” The next event is on Friday 26 May at 1100. You can register at www.bifa.org/events
At the February luncheon of the London Freight Club, Christine Nichols FCILT, FRSA, founder, shareholder and director of Atlantic Paci fi c Group Ltd, was greeted by London Freight Club members as the new chairman of the club. Christine, known to most as Chrissy, started work at 15 years old and has nearly 50 years’ experience in the logistics industry, having worked for importers, exporters, freight forwarders, NVOCCs and shipping lines in the UK and internationally. Chrissy was the first woman to become a member of the London Freight Club 10 years immensely proud to become chairman of the London Freight Club in its 70th anniversary year. “As the first woman to hold this position, I am looking forward to encouraging many more women to join the club and to raise the profile of women in general within the logistics industry.” The ISO 14083 standard – ‘Greenhouse gases — Quanti fi cation and reporting of greenhouse gas emissions arising from transport chain operations’ was published by the ISO Committee in March 2023, after around three-and- a-half years of preparation. The much-awaited publication of the new ago and became vice chairman of the club in February 2022. Chrissy said: “I am
Above: Chrissy Nichols, Atlantic Pacific Group Ltd, chairman of the London Freight Club Below: Robert Keen, immediate past Director General of BIFA, receives honorary membership of the London Freight Club from Chairman Chrissy Nichols and Honorary Secretary Gordon Day
members to share the wisdom of hundreds of years collectively in the freight industry.
Honorary Membership for Robert Keen In recognition of his lifetime of service to the international freight industry and his retirement from the role of BIFA Director General, long-standing London Freight Club member
Robert Keen was conferred Honorary Membership during the March luncheon. For more information on the London Freight Club, or to apply for membership, go to https://londonfreightclub.com
Publication of the ISO 14083 standard
international standard is welcome. It is expected to support the industry globally in its carbon reduction efforts by providing the first universal method for logistics emissions accounting. It has become increasingly obvious that a uniform, harmonised and transparent methodology to calculate CO 2
footprint across the logistics supply chain is required. The aim of the standard is to embed the principles of the Global Emissions Council (GLEC) Framework into a formalised ISO structure and ensure that companies, governments and investors use a single methodology, consistent with the framework.
6 | May 2023
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BIFA News
FIATA launches new quarterly legal newsletter
Notice of Annual General Meeting Notice is hereby given that the 34th Annual General Association (BIFA) will be held at 12.00 on Thursday 25May 2023 at 8 Eastcheap in order to: 1. Receive the report of the board of directors. 2. Receive the accounts for the year ended 31 December 2022 and the report of the auditors thereon. 3.Appoint auditors and authorise the board to fix their remuneration. 4.In accordance with the Meeting of the British International Freight Association’s articles, to note and approve the election of officers of the association. 5.Transact any other business that may properly be transacted at an Annual General Meeting. Steve Parker, Director General A BIFA Member may nominate an attendee, although there will be a limit on numbers once a quorum is achieved. Please email s.parker@bifa.org Note: Any Member entitled to vote at the above meeting may appoint a proxy to vote on a poll in his stead. A proxy need not be a Member of the Association. A form of proxy is available to download from www.bifa.org
Stay up to date with the latest legal developments for freight forwarders! The rapid evolution of global events in the maritime supply chain has seen the emergence of important legal developments for the freight forwarding and logistics industry, as well as a renewed focus on legal aspects as part of risk management strategies. In March 2023, FIATA issued the first of a new quarterly legal newsletter to inform FIATA members of important legal developments around the world and provide practical considerations from a legal perspective.
The FIATA headquarters would like to thank the members of FIATA’s Advisory Body Legal Matters (ABLM) who
provides an update on the work under way in Australia on a simplified trade system. Finally, FIATA’s ABLM Chair reminds freight forwarders of the importance of ensuring proper contract management practices, for which practical tips can be found in the ABLM Best Practice
contributed to the first issue (see QR code), which sheds light on an important
Guide on Contract
Management (see QR code, right). up for future copies of the newsletter (see QR code, right). You can sign-
decision taken by the US FMC against a large shipping company for unfair practices, highlights risks involved in international trade, nuances in general average claims, and
Preventing the spread of pests
Joint Industry Guidelines for the Cleaning of Containers to provide easy-to- use best practices to help everyone in the supply chain
Joint Industry Guidelines for the Cleaning of Containers using the QR code.
The spread of pests around the world by international trade is nothing new, but climate change is in fl uencing the potential for the survival and spread of introduced species leading to greater impacts on local environments.
The publication is complementary to the direction provided in
understand how and when pests can access containers and how to prevent this. You can download your free copy of Prevention of Pest Contamination of Containers:
guidelines published by the International Plant Protection Convention (IPCC) and in the IMO/ILO/UNECE Code of Practice for Packing Cargo Transport Units (CTU Code) regarding prevention of pest contamination of containers.
The World Shipping Council (WSC) has announced the publication of the updated Prevention of Pest Contamination of Containers:
The Limits of Liability for Carriers
In association with
By air – Warsaw Convention (17 SDR): £18.40 per kg
By sea – Hague Visby rules (2 SDR): £2.17 per kg £721.76 per package
BIFA STC: (2 SDR): £2.17 per kg
By road – CMR (8.33 SDR): £9.02 per kg
Insurance for the Marine & Logistics industries
(The SDR rate on 14 April 2023,
By air – Montreal Convention (22 SDR): £23.82 per kg
according to the IMF website, was 1.08263)
+44 (0) 1628 532613
macbeths.co.uk
May 2023 | 7
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Young Forwarder Network
“ The industry looked exciting with the prospect for progression and creating a network which could reach all areas of the globe
Leanne Read
Tom Bed ő cs
Connor Rochelle
New YFN committee members step up
Why did you decide to get more actively involved with the YFN? I decided to become more actively involved with the YFN as I believe networking is crucial and I would love to make a real difference in the industry. Connecting with like- minded individuals is a great tool to aid my career and help me learn from others. I am looking forward to providing fresh new ideas, assisting in the planning of events, meeting industry experts, and encouraging new members to come along throughout this unique opportunity. Connor Rochelle Company: Espace Global Freight Location: Midlands Why did you choose this industry? The fast-paced environment and assisting people with stressful shipments. When did you start your career in logistics? Late 2017. Why did you decide to get more actively involved with the YFN? Many young people do not think of logistics as a career, so when they come into the industry, they do not realise what an amazing, diverse career path they have taken. The YFN is all about networking, building your connections and meeting like-minded individuals who face similar issues to you on a daily basis, and together we can overcome these by creating solutions.
In the fi rst quarter of 2023 we made an appeal for volunteers for the regional committees of the Young Forwarder Network (YFN). Here we meet three of those who have stepped forward
Leanne Read Company: Neon Freight Location: Northwest Why did you choose this industry? I wanted a change in industry and found freight forwarding with no background whatsoever. The industry looked exciting with the prospect for progression and creating a network which could reach all areas of the globe. When did you start your career in logistics? January 2022. Why did you decide to get more actively involved with the YFN? I have been involved in the YFN since starting at Neon Freight over 12 months ago by attending the virtual and in-person events. I have really enjoyed attending and wanted to be involved in making sure others also enjoy them, hearing from industry leaders and visiting different locations.
The attendees of the YFN are the next generation of leaders in the industry, so making connections and friendships here is important and can lead to a career-long friendship. Tom Bed ő cs Company: DHL Global Forwarding Location: Heathrow Why did you choose this industry: Previously I was a business development manager for a waste management company. From visiting clients’ sites, I became increasingly fascinated by how complex the logistics are that go behind planning and maintaining smooth operations of the sites. This was the main focal point that ignited my interest and spurred me to pursue a career in logistics. When did you start your career in logistics: September 2022.
“ I became increasingly fascinated by how complex the logistics are that go behind planning and maintaining smooth operations of the sites
8 | May 2023
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Policy & Compliance
Reasons for concern over Customs measures in the Spring Budget 2023
Whilst the Customs function is becoming more complex and there is scope for improvement, BIFA believes that another Customs standard is not needed, with two already in place: Authorised Economic Operator (AEO) certi fi cation, and the Customs Competency Standard
O n 15 March, the Chancellor of the Exchequer announced his Budget which included an unusually large number of proposals regarding Customs. Some of these individual measures will be well received, but the package of measures must be viewed as a whole. The Budget should not be viewed in isolation, the freight forwarding/Customs agent sector has had to cope with significant recent changes stemming from the UK leaving the EU and the implementation of the Customs Declaration Service (CDS) for imports. In addition, our industry has had to deal with the negative impacts of COVID-19. Government would do well to remember that the success of these programmes was heavily dependent on the ability of the Customs agent/intermediary sector, plus CSPs and software companies, to deliver at a practical operational level. The measures announced in the Budget, are in addition to the following planned changes: CDS for exports, NCTS 5, ICS 2 and the Single Trade Window. The last programme is causing BIFA particular concern, mainly because of the lack of clear information coming from government on this subject. So, let us deal with the six specific measures outlined in the Budget, covering the Customs agenda, which were: • Simplifying Customs declarations requirement review, • Simplified Customs Declaration
Process improvements, • Consultation announcement; Introducing voluntary standards for Customs intermediaries, • Transit policy simplifications, • Modernising authorisations, • Changes to Customs guarantees for special procedures, temporary storage and duty deferment. Informal consultations HM Revenue & Customs (HMRC) has advised that, with the exception of the third mentioned item, all the consultations will be informal. The consultation on the voluntary standards for Customs intermediaries will commence during the summer of 2023. In conjunction with its Customs Policy Group, BIFA has already made some suggestions to HMRC regarding simplifying the data elements required for a full CDS entry. The other area being reviewed as part of this element of the review concerns the data to be included in a supplementary
declaration and extending the timeframe for its submission to the 10th day of the month following the initial submission. Many of the other suggested policies regarding modernising authorisations and changes to Customs guarantees for special procedures follow a direction of travel that commenced with the first version of the Border Operating Model. The consultation regarding voluntary standards for Customs intermediaries caught BIFA’s attention. This stems from research undertaken by government in 2022 in the sector. Whilst most responses from importers/exporters provided favourable feedback on the service they received, there were some negative comments. BIFA will respond to the consultation and also encourages its Members to do so. Whilst agreeing that there is some scope for improvement and that the Customs role is becoming more complex, BIFA believes that the industry does not need another
“ By making facilitations more widely available to the trader, there is the potential to diminish the importance of certain authorisations such as AEO
10 | May 2023
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Policy & Compliance
Drewry managing director Philippe Damas published an article on LinkedIn analysing the expected costs of EU environmental regulations to decarbonise shipping, namely the inclusion of maritime emissions into the EU Emissions Trading System (ETS), the FuelEU Maritime Regulation, and the revision of the Energy Taxation Directive (ETD) The cost of decarbonisation
standard. Already there are two such standards, the first being Authorised Economic Operator (AEO) certification which is relevant at a corporate level, while for the individual employee there is a Customs Competency Standard. The latter aligns with AEO, ensuring that individuals have a broad knowledge of Customs procedures. Diminished importance The other concern about these changes is that by making facilitations more widely available to the trader, there is the potential to diminish the importance of certain authorisations such as AEO. Recent history suggests that as, for whatever reason, government weakens checks on traders at the point of clearance, there is an increase in post-clearance enforcement processes. More information regarding the Spring Budget of 2023 can be found at: www.bifa.org/news/articles/2023/ march/spring-budget-2023- changes-to-customs-measures
A s it stands, the EU ETS approval by the parliament and the council is pending and the FuelEU Maritime and ETD have not yet been agreed by the institutions. Drewry estimates that on the major Asia-North Europe route, these combined policy measures will increase bunker costs and emission-related taxes or allowances from $312 per 40 ft container for very low sulphur fuel oil (VLSFO) today to $568/40 ft using VLSFO, or about $458/40 ft using methanol, a low-carbon fuel. These represent estimated increases in bunker costs of at least 47% on this route for ocean carriers and – over time – for exporters and importers. Importantly, they are also expected to give methanol- powered ships, by 2026, a cost advantage of $110 per 40 ft over vessels powered by conventional, more polluting fuels, when sailing to and from Europe. New environmental regulatory and tax
changes also have contractual implications for shippers. Philippe Damas reported that many customers are being asked by ocean carriers to add a clause in their contracts providing that carriers are allowed to pass on the cost of new EU regulations to the shipper/customer. However, it is still very difficult to estimate the exact costs of the new environmental regulations. As noted by the International Transport Forum (ITF www.itf-oecd.org) in its report on carbon pricing in shipping, this would largely depend on market conditions and bunker fuel price over time. Effective capacity could be affected either by slow steaming (increasing transit times) or by shorter routes (decreasing transit times), while a very low demand for ocean freight might deter ocean carriers from passing on certain extra costs. BIFA would like to thank CLECAT for allowing the reproduction of this article.
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May 2023 | 11
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Policy & Compliance
How to go about verifying establishment
B IFA has frequently issued guidance to Members on the twin issues of Customs representation and establishment when submitting Customs declarations for overseas based traders to HM Revenue & Customs (HMRC). Usually when focusing on these twin, but closely related, subjects we focus on the question of Customs representation and empowerment – however, in this article equal precedence is given to the issue of ‘establishment’. The Taxation (Cross-Border Trade) Act 2018 (TCTA 2018) uses subtly different language from the Union Customs Code that it replaced. The term ‘Customs Representative’ is now replaced by ‘The Customs Agent’ although the concept remains largely the same. From our Members’ viewpoint, the most important clause of the Act is Section 21 Customs Agents where it is stated: 21 (1) A person (the principal) may appoint any other person (a Customs agent) to act on the principal’s behalf for the purposes of this part, and a) The agent may make Customs declarations in the name of the principal (and in that case the agent acts as a direct agent) or b) The agent may make Customs declarations in the agent’s own name (and in this case the agent acts as an indirect agent)
Beware of the quality of data when checking whether a company is ‘established’ in the UK
12 | May 2023
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Policy & Compliance
and agencies is not thorough enough. One of the most frequently quoted examples relates to VAT numbers; until recently Members could identify overseas-based entities because the VAT office address was in Aberdeen, but this is no longer the case. Now that the Aberdeen office has been closed, it is not possible to identify whether a company is established in the UK relying solely on checking information on government and its agencies’ websites. In fact, BIFA is becoming increasingly concerned about the thoroughness of checks conducted before company registration numbers, VAT and EORI numbers are issued. At the very point that relying on government resources becomes a less reliable source of information, we note increased compliance activity by HMRC. There have been major issues with the valuation of goods for several years and recently the UK government, depending on the information source, has had to pay between £1.7 billion and £2.3 billion to the EU over import VAT fraud. In 2018, the EU commission sued the UK for €2.7 billion on the grounds that the UK had failed to pass on the correct amount of tax for imports between 2011 and 2017. This problem has not gone away. In fact many will argue that government has introduced measures that will actually increase the likelihood of fraud being repeated. Members should be very wary of acting as Customs agent for any business importing into the UK on a DDP basis where there is no UK established entity to act as an importer of reference. Becoming liable It is essential to realise that if the overseas VAT registered entity disappears, the UK Customs agent is likely to find itself liable for unpaid taxes, etc. Also, if there are any pre-, or for that matter, post-clearance issues then the Customs agent will be legally obliged to co-operate with HMRC in its investigation. The agent will be liable to pay penalties, additional duties and taxes, etc, as it was acting as an indirect agent. One Member confirmed that it has started conducting very thorough due diligence on overseas parties in the country of origin. This is expensive but cost-effective compared with the penalties and back tax it might have to pay in the previously mentioned scenario. The Member advised that what it had discovered was “shocking”; the list of non-compliance issues included deliberately mis-declaring clothes sizes on the invoice so that the entry could be zero-rated for VAT purposes, under-declaring the unit price and lastly shipping more goods than detailed on the invoice. The latest guidance from HMRC states: “If you have a UK VAT or UK Economic Operator Registration and Identification (EORI) number, this does not necessarily mean or provide sufficient evidence that you are established in the UK,” – a salutary warning that has to be heeded. Also, not all traders are registered at Companies House, which adds an additional level of complexity. In order to protect themselves, forwarders will have to conduct additional due diligence checks. The evidence that you should ask to see includes, but is not limited to:
Many Members are fully conversant with this legal requirement and ensure that they have the correct empowerment. Direct agents However, in order to be a direct agent, Schedule 1 of the TCTA 2018 Section 2 “Eligibility of persons to make a Customs declaration” makes specific reference to the often-overlooked question of establishment. The law is clear on this stating that “persons may make Customs declarations” only if “they are established in the United Kingdom or a specified place outside the United Kingdom”. In the simplest language, it means that for an import agent to act as a direct agent for an importer, the last named must have an establishment in the UK. We will examine the criteria later, but it varies dependent on the business structure of the business. Our first point is that there are inconsistencies in the definition of ‘Established’ between different government departments and also sometimes between different Customs regimes. BIFA’s general comment is that Members should be very wary about what they check and taking it at face value. There are significant concerns that the level of due diligence conducted by government departments
“ It is essential to realise that if the overseas VAT registered entity disappears, the UK Customs agent is likely to find itself liable
May 2023 | 13
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Policy & Compliance
• Information regarding company accountants and solicitors. In addition, Members may wish to engage the services of a credit checking agency and ensure that they conduct the relevant establishment checks. However, it should be noted that the party requesting the checks will, in the eyes of HMRC, still retain responsibility for its accuracy. In many ways it is about building up a basket of evidence on which to make a judgment call as to whether a business is established in the UK. Yes, it will take more time before business is onboarded and competitors will cut corners, but you have to ask yourself, “Is it worth taking the risk?” Fraud in the supply chain In the writer’s view, fraud has always been part of the supply chain. In the 1970s, shipments of unlabelled textile goods made in Hong Kong were shipped to the UK in one consignment. In another shipment in the consolidation ‘Made in England’ labels were shipped to be sewn into the garments. Also, to reduce duty payments, it was not uncommon for certain items to be shipped in component parts and re-assembled in the UK. However, the scale of such activity and the profits to be derived are much greater now than they have ever been. Unfortunately, the Customs agent, particularly when representing overseas traders, can find itself liable for the latter’s activities – a point that the former must be aware of. When conducting their own due diligence checks, Members cannot rely solely on government resources, which by its own admission does not provide all the information needed, and consideration must be given to what additional checks and questions are necessary to establish whether a company is established in the UK.
• Proof of residence or usual residence in the UK (for sole traders, etc), • Details of key staff, including job title (for certain authorisations such as the Fulfilment House Due Diligence Scheme, directors have to provide additional information such as their National Insurance Number), • A certificate of incorporation issued by Companies House, • Details of business activities and where they are carried out, including full address and postcode – checks can be made on Google Earth, • Details of where staff are employed and the work that they carry out, • Details of the physical premises owned or leased by the business, • Details of contracts, orders or invoices held or issued by the business, • Proof that the business has its own accounts – ask for copies, etc,
“ Members cannot rely solely on government resources
Meeting Members
The events also marked the retirement of outgoing Regional Consultant, Len Hobbs who has represented BIFA in Scotland since late 2016. An announcement regarding new regional representation will follow. Also joining Steve and Len at the two events was immediate past Director General Robert Keen.
New BIFA Director General Steve Parker is continuing his drive to meet as many BIFA Members in-person as possible, travelling to Scotland at the end of March.
During meetings in Glasgow and Aberdeen, Steve addressed those present detailing his vision for BIFA and his plans for future engagement with Members.
14 | May 2023
www.bifa.org
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BIFA Awards
tracking so that stock levels are properly managed.” Killick Martin is looking to widen the use of KM Insight and, as customers share their feedback, he is confident that new features will develop. “We want to make the system more customisable, really easily, so that it can be a perfect fit with no effort on the part of the customer,” he said. “We are looking at ways to use existing technology from other fields to achieve this.” Most importantly, he said: “You have to ask yourself what a development means for the person doing the job – and for their customer, which is who we are ultimately serving.” Clearly, Gallagher sees digitalisation as the way forward for the freight industry, but he feels there is a need for more people with traditional knowledge of logistics to be involved “at the front end” to accelerate progress. Environmental ethos Back to the leisurewear brand, for whom sustainability is a core value – and this extends to its logistics processes. Killick Martin helped the client to “work smartly” between different modes of transport, not just to control costs and inventory “Seafreight could mean you are behind if a product is selling fast; rail, taking just a few days longer than air, is more sustainable and cheaper, which makes it a compelling option. Or you might use a mix of modes to ensure stock is there when needed, airfreighting some products and sending the rest by rail. “We lean a lot on rail – although the war in Ukraine made it much harder to source things from China via rail, and the customer has found other routeings,” Gallagher said. The client looks set for much more sales growth, and now has the supply chain visibility and control to support it. Gallagher was keen to give due credit to Killick Martin’s Bristol team, who “did all the work, innovation and customer care” for the leisurewear brand. “With experienced people and good systems you can do a lot – and that is inspiring,” he said. but also as part of its environmental ethos.
Paul Gallagher, Killick Martin
KM Insight allows Killick Martin and its clients to oversee all aspects of the supply chain
Killick Martin has all the answers with data tool
Killick Martin scooped the 2022 BIFA Supply Chain Management Award based on its work for an online leisurewear retailer. The company’s KM Insight software played a key role in enabling the client to scale up its business while improving ef fi ciency
“ There is not a lot of stock sitting around... KM Insight allows tracking so that stock levels are properly managed
that data and harvests it for the customer. Customers can also control their supply chain, for instance by slowing down or speeding up shipments in response to sales.” Through KM Insight, Killick Martin helped its client to control costs, meet deadlines and increase supply chain efficiency. The retailer was able to improve stock management, for instance, both by finding additional vendors and by controlling deliveries. “Our customer’s products sell very quickly,” Gallagher said, “so there is not a lot of stock sitting around. This used to be a problem; without visibility of transactional movements, you cannot track things. KM Insight allows that
K illick Martin has a history of helping small customers grow by managing their logistics needs – such as a particular online leisurewear retailer that had outgrown its existing logistics set-up. Key to the client’s successful future growth was Killick Martin’s KM Insight software, a cloud-based platform that integrates with the company’s existing freight system and allows both Killick Martin and its clients to oversee all aspects of the supply chain. Key features One of the key features of the platform is its simple integration process. It has been designed to work out of the box, and can be set up in less than 15 minutes. Paul Gallagher, Killick Martin managing director, explained: “All the data is in our operating system already. KM Insight simply mines
Supply Chain Management Award
BoxTop Technologies has been successfully delivering freight management software solutions to international freight forwarders and logistics providers for over 20 years. BoxTop puts you in control of a smarter, more efficient organisation and enables your team to free up time to focus on developing other areas of your business.
16 | May 2023
www.bifa.org
BIFA Awards
Problem-solving Jenna seeks diverse challenges
on one of KN’s largest UK healthcare customers. Another focus is mentoring a new intake of graduates. “It feels almost full circle,” she reflected. “When you first enter the workplace it can be daunting, especially if you are living away from home or it is your first experience of the working world. Mentoring is not just about training: it also involves key leadership and development skills, understanding conversations about their roles, how people are doing outside of work, what their hopes and dreams are for the future and enabling them.” Observing that younger colleagues – who have only known life with the Internet – will take the industry forward, Jenna said that relationships with customers will always be critical in freight forwarding, but automation and digitalisation will enhance services. “Automating the easy processes will help us drive a more patient- centric environment. For example, one of my customers produces dialysis kits for patients’ homes. Those patients have every right to know exactly when their kit is turning up at their door. If that can be automated and accurate, it will change many people’s lives and we, the logistics experts, can provide more value-add services and be more efficient,” she explained. Challenging preconceptions Jenna is passionate about improving diversity in the logistics industry to inspire and encourage anyone to join the industry by providing access to someone they can identify with. “UK logistics is still very male, white and able-bodied – but there is no reason why it should be,” she said. “It is not just about gender. The industry is a huge employer with people from a wide range of backgrounds. A great example is education level. “Starting with the apprenticeship scheme, there is an appropriate education opportunity at every stage of your career in logistics and that seems to be unique to this industry. There is a focus on mentorship and case studies of people’s careers from all walks of life. We must reflect not only our customers’ reality, but also the communities in which we operate.”
Jenna Speed entered the logistics industry after completing her fi nance degree and was awarded Special Recognition in the BIFA Young Freight Forwarder of the Year Award category for 2022
A born problem solver with a keen sense of accountability and desire to fi nd ef fi cient ways of doing things, Jenna Speed said: “I searched online which jobs these traits would be good for and logistics came up. Forwarding was not something I was familiar with but after researching the industry, I was excited and applied. “I handed in my dissertation early programme with Kuehne+Nagel (KN). At the time I wondered if it would be worth missing our celebration party but seven years later, I would say so.” Looking back on her decision, to be able to attend the job interview for the graduate Jenna remarked that the one thing that really piqued her interest in logistics was that “it is not just a desk job. It is a real game- changer.” Team leadership Jenna started her logistics career in warehousing, soon moving into team leadership and customer- facing roles. She learnt quickly, working in a number of modes before moving into sales. Jenna is now a national key account manager in the healthcare vertical, an area she has always been drawn to. “I really enjoy working alongside the healthcare industry, understanding their drug pipelines and then strategising with the team to get the supply chain ready. In some cases, we are planning supply chains for drugs that are not even available to patients yet. “One research area for me
As part of KN’s sustainability agenda, Jenna and her colleagues volunteered at City Harvest, a London-based charity that delivers surplus food for free to struggling families
currently is how the commercial, public and charitable healthcare sectors can work together better for more efficient and effective distribution, and where KN can support this as a forwarder,” she said. Jenna is eager to scale up her responsibilities further and at the time of writing was about to take
Young Freight Forwarder Award
Virgin Atlantic Cargo is proud to sponsor BIFA’s Young Freight Forwarder Award to recognise and encourage the next generation of industry leaders. As well as rewarding the progress of the best young people, this award helps to highlight the vital role freight forwarders play in the growth and development of the industry. VAC recognises the importance of developing and retaining talented young people and is confident this award will help to attract more recruits that want to build a future career in a sector that is so important to the economy and international trade.
18 | May 2023
www.bifa.org
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