BIFAlink September 2021

September 2021 The magazine of the British International Freight Association BIFA link Issue: 373 www.bifa.org

HMRC confirms CHIEF system withdrawal date Pages 12-14

INSIDE

6: News National

10: Policy & Compliance

Apprenticeship Week 2022 date announced

Quay rent, demurrage and storage charges double in a year 16: Profile B&H Worldwide was the winner of the BIFA Supply Chain Management Award

8: Policy & Compliance The advantages of ‘unaccompanied’ for EU trade

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Robert Keen’s Column

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BIFA launches CDS training course

BIFAlink is the official magazine of the British International Freight Association Redfern House, Browells Lane, Feltham TW13 7EP Tel: 020 8844 2266

August saw an announcement from HM Revenue and Customs (HMRC) of the timetable for the full introduction of the Customs Declaration Service (CDS) and the retirement of the CHIEF system that has enabled UK entry processing for almost 28 years. BIFA has been asking for clarity regarding the full introduction of CDS for a long time and we have expressed concerns from BIFA Members that CHIEF should not be withdrawn from service until CDS is proven to be operationally sound and fit for purpose. There is history in the UK of Government computer transformation not meeting milestone dates and some BIFA Members have contacted us to express concerns, however the publication of the HMRC timetable suggests that there is

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Director General Robert Keen r.keen@bifa.org Executive Director Robert Windsor

confidence in an orderly transition, the key word being ‘suggests’. So, we are pleased to announce the launch of a new BIFA online training course from September designed specifically to help our Members understand and implement the different working methods involved with the new system. The course is suitable for anyone completing Customs declarations and will cover the main differences between CHIEF and CDS to enable users to submit Customs declarations for exports and imports via the new system no matter which software supplier is used. Full details can be found at www.bifa.org/training/customs-procedures Having started the ball rolling by commissioning development of the course last Autumn, I must pay tribute to my BIFA colleagues who have put in many hours of work with our provider Walkgrove, a specialist e-learning solutions company. We also thank our friends at Agency Sector Management (ASM UK) whose technical help was invaluable. Those of you with long memories will remember the so-called Nigerian fax scam that later became known as the 419-letter scam (419 being the section of the Nigerian criminal code covering such activity). Of course, with the advent of e-mail such scams have proliferated and no doubt you all receive scam e-mails on a regular basis and have procedures in place to identify and ignore them. So, you may have been concerned if a recent e-mail appearing to come from BIFA landed in your inbox, pursuing the usual format of an unpaid invoice. Many BIFA Members contacted us asking if our systems had been hacked but it seems that this is termed a ‘spoofing’ event and was orchestrated from outside of BIFA. As always with dubious e-mails, close examination of the sender e-mail address reveals that it has no relation to bifa.org All we can do is advise BIFA Members to ignore and delete it in the same way that you would the offers from people to transfer millions of pounds into your bank account. If you have any concerns please contact the Secretariat. Last month, I commented on increasing pressure from consumer bodies on regulatory authorities to “do something” about the global maritime supply chain problems and shipping line charges. What anyone can do to address rates charged in a free-market economy is questionable however the matter has been referred to the UK Competition and Markets Authority (CMA) by the British Chambers of Commerce. The CMA is currently consulting to understand the position and it’s our view they will not intervene unless there is any evidence of shipping lines colluding on pricing. However, BIFA Members are increasingly bearing the brunt of customer complaints about a situation that is beyond their control. Delays such as a lack of drivers, disrupted port operations and COVID-19 or “pingdemic” related problems are Force Majeure so it is important that BIFA Members maintain communication with customers to emphasise that you are acting as an intermediary and such matters are outside of your control. Customers need to be reminded that any such additional costs will need to be passed on. We published a report recently (https://bifa.org/news/articles/2021/jul/freight-association-sees-no-change-in-container- shipping-fundamentals-for-months-possibly-years?l=y) at the request of the BIFA Surface Policy Group to assist BIFA Members in demonstrating to their customers that this is a global problem. To end, I would like to remind Members that from 1 October 2021, there will be new requirements to continue importing animal products from the European Union into Great Britain. It is important that businesses take the necessary preparatory steps to ensure they can comply with the new requirements. To assist businesses, the Trader Readiness Team Animal and Animal Products Imports Project will be holding webinars for traders. Search Gov.UK for “Webinars for importers of food and drink products from the EU to Great Britain”

r.windsor@bifa.org Executive Director Spencer Stevenson s.stevenson@bifa.org Executive Director Carl Hobbis c.hobbis@bifa.org Policy & Compliance Advisor Pawel Jarza p.jarza@bifa.org Policy & Compliance Advisor David Stroud d.stroud@bifa.org Editorial Co-ordinator Sharon Hammond s.hammond@bifa.org Membership Supervisor Sarah Milton s.milton@bifa.org Published by Park Lane Publishing peter@parklanepublishingltd.com Contributors

Robert Keen, Robert Windsor, Pawel Jarza, David Stroud, Spencer Stevenson, Carl Hobbis, Sharon Hammond

Note to media: If you wish to use items in this magazine that are older than 1 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.

Robert Keen Director General

September 2021

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cranes for Terminal 1 at the Port of Liverpool to further support growth from intra-European feeder networks and increase its service offering by increasing the height and reach capabilities of the terminal. North-South routes drive rising reefer freight rates Ian Matheson, from Impress Communications, reviews some recent news that might impact on Members’ business

ON THE OCEAN Reefer container freight rates have risen sharply through 2021 – and in contrast to dry cargo rates are forecast to rise further in 2022, driven by catch up on North-South routes, according to Drewry’s Reefer Shipping Annual Review and Forecast 2021/22 report. It adds that the resurgence in reefer freight rates has not been uniform across all trades, with pricing recovery particularly strong on the main East-West routes, but less so on the North-South trades. The new DFDS ferry Côte d’Opal, which made its maiden voyage on the Dover-Calais route in early August, can carry 3,100 lane metres of freight, making it the longest ferry on the short straits route. With two engines instead of four, the vessel will offer reductions in fuel consumption and CO 2 emissions and have a service speed of 20-22 knots. Containers have proved a lucrative business for the multipurpose sector, which faces a boom in all business areas, say a number of the sector’s major carriers. A shortage of new vessels may put a damper on the supply of vessel capacity but keep rates high.The risks of placing container cargo on bulk carriers and general cargo ships are explained in an article on the Gcaptain website, which can be read at: https://tinyurl.com/y4wjvms7 GOING OVERLAND Ti and Upply’s most recent European Road Freight Rate Benchmark (Q2 2021) stood at €1,147, up 3.2% year-on-year or 0.4% quarter-on-quarter, as a result of rising demand levels and supply chain disruption. UK outbound rates were 16.8% higher year-on- year as carriers price in disruptive

IN BUSINESS The National Crime Agency has warned companies with operations at the UK border, such as port and airport operators, contractors, couriers and freight operators, that their staff with detailed knowledge of border controls and processing could be targeted by organised crime groups that are seeking to exploit the COVID-19 crisis. A recent Gartner survey found that 17% of chief executives and senior business executives in supply chain- intensive industries believe cost optimisation is the main issue that chief supply chain officers should focus on. Supply chain resilience was cited as the next most important issue, named by 16% of the 199 chief executives surveyed. The global contract logistics market declined by 3.3% in 2020, ending a decade-long growth streak, according to new research from Transport Intelligence (Ti). However, the post-pandemic economic rebound will be sufficient to drive strong contract logistics growth of 6.5% in 2021, says the consultancy, which forecasts the global contract logistics market will be 24% larger by 2025 than before COVID-19. CUSTOMS MATTERS HMRC announced in early August that at the end of March 2023 it will close the Customs Handling of Import and Export Freight (CHIEF) system that handles declarations. The new Customs Declaration Service (CDS) will replace it in a phased withdrawal whereby 30 September 2022 will see the ending of import declarations via CHIEF and 30 March 2023 will see the full closure of CHIEF/National Export Systems (NES).

new Brexit procedures, compounded by an increasingly acute driver shortage problem. Leeds City Council, West Yorkshire Combined Authority and Bradford Council have secured a Department for Transport and Energy Saving Trust grant to fund 32 new electric- cargo bikes to the value of £160,000. This is part of the latter’s £2 million fund aimed at helping businesses and local authorities purchase cargo bikes in an effort to combat congestion and pollution in city centres. IN THE AIR According to IATA’s latest World Air Transport Statistics report, the top 25 cargo airlines last year saw traffic in terms of scheduled cargo tonne km (CTK) decrease by 3.3% year on year. This was better than the overall industry decline of 9.1%, although it should be noted that IATA’s statistics only include scheduled services and not charter operations.

In the Baltic Exchange monthly market summary, Bruce Chan, vice president of global logistics at investment bank Stifel, writes that the use of passenger aircraft in an all-cargo configuration is unlikely to offset rising air cargo demand for the peak season. He adds that the inflow of passenger-to-freight conversions — so-called preighters — to provide incremental capacity, are insufficient to meet the demand and that, ultimately, these conversions are temporary and will be reversed when rates decline. ON THE QUAYSIDE A record volume of cargo was handled at DP World’s two UK ports in the first half of 2021. London Gateway saw throughput of 888,000 teu, a more than 23% increase on the previous first half year record set in 2020, while DP World Southampton achieved throughput of 995,000 teu.

Peel Ports has invested in two new ship-to-shore (STS) container

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September 2021

www.asm.org.uk admin@asm.org.uk

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    ASM have been producing customs and freight management software and representing your interests with government and industry for the last 25 years. With all the current uncertainty and all the changes about to happen with customs systems and procedures, you can rest assured we will be doing just the same (and more) for the next 25.

Whether you are moving to our Sequoia software from a legacy system or bringing your customs clearances in-house for the first time, we have the tools to support you through that migration. Email us at admin@asm.org.uk for more information.

Air   Ocean   Road   Imports   Exports   All customs declarations    Worksheet automation  Customs Tariff    CFSP management    Customs Warehousing     Duty management    NCTS   Transit (CT) Guarantee management    Import ETSF     CCS-UK electronic fallback    Export DEP management   Job costing and invoicing    Air waybills and eAWB    Bills of lading    Barcoded cargo labels    Consignment security declarations    Collection and Delivery notes    Consolidation management and Manifests    eDocument management   Limitless integration   Limitless automation    Archiving

       

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Making freight forwarding a career of choice

In the next few weeks, you will receive a personal copy of a useful booklet full of ideas about how to promote your business and the industry to the next generation as a career option. Carl Hobbis, executive director, said: “One of the four pillars at BIFA is industry promotion, and it is our weakest in terms of activity. “We have our own plans to engage with schools better and the idea behind the booklet is to hopefully inspire Members around the country to do something locally. “We need a combined effort to make a real impact.” He added: “Schools need employer engagement and, apart from the blue-chip organisations, generally do not know where to start or who to approach, so why not reverse this and contact the school direct. Their careers lead is always listed on their website. “Furthermore, we have had a specific apprenticeship standard for International Freight

Forwarding for over three years and recently the sector has been in the news more than ever, so what a great time to encourage someone to consider a career in international freight. “I personally dislike it when I hear ‘I fell into the industry’ – but however you started out we need you to go and talk about it more to young people and make it an industry of choice. If

every Member did one thing, it would make a massive impact.” Please keep us updated about your school activity by contacting Nezda Leigh at n.leigh@bifa.org who is coordinating all activity. For more ideas about careers days visit: https://apprentices.bifa.org/employers/career- day-kit/

National Apprenticeship Week 2022 date announced

The annual week-long celebration of apprenticeships will shine a light on the positive differences that apprenticeships can make to individuals, employers and to the wider economy. The week will also be an opportunity for BIFA Members of all sizes to show how they have stepped up during this

unprecedented and challenging time. Carl Hobbis, executive director, said: “We encourage Members to promote the great work of their apprentices, and how they have made a difference to the business. “Given all the challenges we have had to deal with, and the fact that the industry has its highest media profile ever, we need to promote it to the key workers of the future and

give young people employment opportunities. “Good planning of your future talent pipeline is paramount, so get the week pencilled in your calendar and get out there within your local community and promote the industry and your business.” Some ideas you could do or get involved with are: • Offer work experience

• Workplace visits • Work with your local school or college • Stage an event • Make a video or write a blog • Utilise your social media channels • Job swap for the day with an existing apprentice. For more information on apprenticeships visit: https://apprentices.bifa.org/

Increased incentive payments for hiring new apprentices

£3000

For further information about recruiting an apprentice visit apprentices.bifa.org Employers will receive £3,000 for new apprentices of any age who join their organisation from 1 April 2021 to 30 September 2021.

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September 2021

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All change on the ‘virtual’ YFN

Advice on money laundering checks What is the advice from BIFA on money laundering checks? This was a question from a BIFA Member following a visit from HMRC asking for details of due diligence, searches and account application, etc, for an importer client. So, what should you do before you commence work on behalf of an importer? We cannot provide a ‘tick list’ answer but this ties in with what we have been preaching a lot in the past few years with the watchword “know your customer”. Money laundering is an offence and whilst certain disciplines are regulated in relation to this area, such as financial bodies and lawyers, the prevention of money laundering should be part of due diligence for any firm. It is not just the Money Laundering Regulations that apply but also the Proceeds of Crime Act, the Anti-Terrorism Act and others, so if you accept money that has been obtained as a result of criminal activity you may face action. No one can “turn a blind eye” over these issues and the legislation in this area is detailed and complex. What is needed is a culture of due diligence making sure the party you are dealing with is a genuine entity. See https://bifa.org/ information/good-practice- toolbox-bifa?p=1 for relevant BIFA Good Practice Guides.

Since the ‘Virtual’ Young Forwarder Network was started in May 2020, Kyle Lawrence, the chair of the most established region, London East, has fulfilled the same role for the digital format, which has become very popular. However, every 12 months it is good for someone else to have the opportunity to gain valuable experience from the role. As a result, from August Laura Hobby has taken over and Kyle will continue with the London East region as we endeavour to get live events back on in the fourth quarter of the year. Carl Hobbis, executive director, commented: “Kyle has done a fabulous job organising things behind the scenes. He has also supported other extra activities and talked at various careers events. He is a great ambassador for the industry and a real success story of

what can be achieved via the apprenticeship route.

(YFN) holds free events every two weeks for one hour. Since the YFN was established in 2019, there have been nearly 60 events and they are open to any employee of BIFA Members. Events are only listed one at a time and can also be found on the dedicated YFN LinkedIn page. For more information, see: www.bifa.org/membership/young- forwarder-network

“I am looking forward to working with Laura who, no doubt, will bring some new ideas and keep the momentum going. As with most things, this digital format is here to stay and once the regional face-to- face events are re-established, the online events will take place every three weeks.” The Young Forwarder Network

IATA names new head of global cargo

IATA has appointed Brendan Sullivan as its new global head of cargo with immediate effect, replacing Glyn Hughes who left the organisation in January. Since Hughes’ departure, Sullivan has been acting global head of cargo alongside his role as head of cargo operations and e-commerce. IATA said that Sullivan has worked in air cargo for 20 years and has spent 14 years at IATA, playing a key role in two recent initiatives; the One Source data sharing platform and the IATA Face Campaign which aims to build the next generation of air cargo leadership. Nick Careen, IATA’s senior vice president for

operations, safety and security, said: “Brendan will be a great global head of air cargo. He knows the industry from frontline operations to the development of global standards. He recognises the critical need for modernisation to meet the needs of air cargo’s biggest business opportunities – e-commerce and special cargo. And he has the passion to drive a post-crisis agenda that will strengthen air cargo’s contribution to the global economy and to the airline business.” Hughes left the role through voluntary redundancy as part of a wider restructuring. In February, he took the newly created role of director general at TIACA.

By air – Warsaw Convention (17 SDR): £17.46 per kg

By sea – Hague Visby rules (2 SDR): £2.05 per kg £684.53 per package

BIFA STC: (2 SDR): £2.05 per kg

By road – CMR (8.33 SDR): £8.55 per kg

(The SDR rate on 16 August 2021,

By air – Montreal Convention (22 SDR): £22.59 per kg

according to the IMF website, was 1.02679)

September 2021

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Time to consider the advantages of ‘unaccompanied’ for EU trade

Brexit – the gift that keeps on giving for trade and supply chain professionals. A blizzard of new requirements and acronyms at the border and, as was highlighted in last month’s BIFAlink , there are more to come when full UK import controls are introduced in 2022. Changes in the wider market, like EU wide driver shortages, are making roadfreight more problematic and expensive. It is a good job we are an adaptable and resilient industry. Although much of the media focus on UK-EU trade has been on accompanied ferry traffic, the reality of the movement of goods to and from the EU is of course more diverse. That is shown in the government’s figures for 2020 freight volumes, with 17% of UK-EU trade flows being accompanied ro-ro. Even if we just narrowed down the volumes to unitised modes, it is a two- thirds/one-third split between unaccompanied (trailers and containers) and accompanied. Unaccompanied options are also growing. More capacity on established routes, such as into the Humber and the Thames. New services into the likes of Medway, Liverpool, Poole and Teesport. New facilities at Tilbury, Medway and Hull. Sea miles versus land miles Why do we see this happening? Because some customers, perhaps prompted to look again at their plans by the changes in the regulatory landscape and a renewed focus on resilience, are taking a different view on sea miles versus land miles, the relative risk of unplanned delays and the deployment and productivity of hauliers. Depending on the nature of the cargo being carried and the destination – particularly further north and west of the UK – the financial sums add up for unaccompanied movements. But it is not just the financial aspects of the transaction. As we all strive to play our part in more sustainable freight solutions, the much lower Tim Morris of the UK Major Ports Group analyses UK/EU cargo flows through ports by freight type

The Port of Liverpool Seaforth Docks on the River Mersey

CO 2 intensity of sea miles compared with road miles is becoming increasingly important to many customers. Building in more resilience is a key part of wider supply chain thinking and unaccompanied trailers have a proposition here too. Rather than store goods in a warehouse, manufacturers and retailers are able to use ‘contingency stock’ at the port of entry using stand trailers and containerisation. None of this is to raise doubt about the viability of accompanied traffic. There will be cargoes and circumstances where accompanied ro-ro is the right choice, particularly on the Short

Straits. In any reasonable scenario of UK-EU future trade, this route remains a key trade corridor for UK and EU trade. Running the numbers But in these times of change and with a renewed focus on supply chain resilience, it is more important than ever that cargo owners and their supply chain partners and agents run the numbers on the variety of different options open to them.

BIFA would like to thank Tim Morris of the UK Major Ports Group for submitting this article.

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September 2021

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Quay rent, demurrage and storage charges double in a year

The Port of Los Angeles, USA

The year 2020-2021 saw a doubling of demurrage and detention fees charged to customers at the top 20 global ports. Rates are inconsistent, with large differences between ports and carriers, but vary from just $132 at Busan in South Korea up to $2,500 for two weeks after discharge at Long Beach and Los Angeles. Demurrage and detention prices increased between March 2020 and March 2021 by approximately 104%, or the equivalent of $666 per container across all container types. Added to freight rates at historically high levels, there are concerns that there will be an increase in incidents of low-value cargo being abandoned at destination. This will increase pressure on forwarders and the financial risks that they are exposed to. How to protect your company What should BIFA Members do to protect themselves? Our first piece of guidance is to make sure that the BIFA Standard Trading Conditions (STC) are incorporated in all and any contracts with customers. This will give Members the legal basis to protect themselves, to exercise a lien, to ensure payment is made and to take action to recover outstanding debts. In other words, BIFA has given its Membership the necessary levers to secure payment from companies that remain trading. Generally, prevention is better than cure and we would suggest that Members consider procedures to ensure that their clients still want the goods and have the capability to meet their liabilities. The suggested steps include, but are not limited to: • Reviewing credit terms and adjusting as required, including the maximum that you are willing to advance on behalf of clients for individual shipments. • Devising a payment plan to avoid a large debt How BIFA Members can protect themselves from the costs related to abandonment of low-value cargo

accumulating in the case of ongoing storage charges. • Introducing procedures whereby overseas agents only ship goods to the UK after receipt of the UK import agent’s express instructions. • Refraining from entering goods to Customs for consignments shipped under a negotiable bill of lading until there is clear evidence that the importer has title to the goods in the form of either a correctly endorsed bill of lading being submitted or similar authority. • Not accepting shipments directly from other parties, including shipping lines, without checking that the client will accept and pay for the cargo. We are aware that importers are abandoning or rejecting cargo and there are two basic scenarios: • If the goods have been cleared and the importer rejects them, we would suggest that Members exercise a lien in order to protect their interests, • Where goods are rejected prior to clearance, instructions should be sought from the sender if ownership has not passed to the buyer.

Where cargo is rejected or abandoned by an importer, it is important to communicate with the originating agent and/or shippers to ensure that the issues are quickly resolved and additional costs are minimised. It is essential to keep accurate records of all discussions, including confirming wherever possible everything in writing. In many ways we are experiencing the worst possible situation – business is severely disrupted, but it is still continuing, and careful consideration must be given to protecting commercial interests. Our final two points are that: • Members should communicate their policies to clients, posting information on their websites. • Professional guidance should be sought covering a wider range of issues, from exercising a lien, ensuring that the correct insurance policies are in place, to understanding which of the government’s support packages may be accessible to Members. Export problems While we have focused on imports into the UK, similar issues can be experienced on goods exported from the UK and abandoned at destination. For full container loads, where the export agent is named on the bill of lading, there must be procedures in place to monitor clearance and removal from the quay in a timely manner. In many ways what is being suggested is merely a review and tightening up of good commercial practices. For many years we have urged Members to “know their customer” and that is probably truer now than ever before.

There could be three options: – Return them to the shipper, – Abandon the goods to the Crown, – Find a new buyer.

Regarding the scenario where goods are rejected prior to clearance, it is most important that the carrier is not paid, and thus the cargo is not accepted by the import agent, until it is confirmed that its client definitely wants, and more importantly can pay for, the goods.

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September 2021

Policy & Compliance

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First practical steps to introduce electrically powered vehicles

One of the main criticisms of the UK government’s transport decarbonisation plan launched on 14 July this year was that the political ambitions far exceeded practical capabilities, particularly when it came to changing the motive power of a heavy goods vehicle. A core element of the decarbonisation plan was the prohibition of the sale of diesel powered vehicles weighing up to 26 tons from 2035 and for those exceeding that limit from 2040. On 27 July, the Department for Transport announced £20 million of funding for road trials to support the sectors’ transition to zero emission roadfreight. Using learning from field testing battery- electric vehicles in a real-world environment, and from undertaking feasibility studies, these activities will help to design and develop cost- effective, zero emission heavy goods vehicles (HGVs) and their refuelling infrastructure right here in the UK. Successful projects to receive government funding include an ‘Electric Road System’ feasibility study, led by Costain Ltd, which is A number of projects have been announced in preparation for a potential demonstration of zero- emission freight technologies at scale on UK roads

considering a 20 km stretch of road near Scunthorpe for a possible trial of electric road systems. Electric Road Systems supply battery- electric trucks with electricity from overhead catenaries via a pantograph enabling HGVs to charge dynamically. There have already been successful trials of such technology in both the Netherlands and Germany. Hydrogen fuel cell Meanwhile, a hydrogen fuel cell feasibility study, led by Arcola Energy Ltd, will design a possible future trial of hydrogen fuel cell trucks and new refuelling infrastructure in Scotland. These projects, along with four other successful feasibility studies, aim to prepare for a potential demonstration of zero emission freight technologies at scale on UK roads and will support the rollout of zero emission technologies to decarbonise heavy transport vehicles.

Commercial vehicle manufacturing company Leyland Trucks will be deploying 20 DAF battery- electric trucks for use by public sector organisations to support the uptake of this technology, enabling learning to be gathered from field testing vehicles in a real-world, real- time logistics environment. The investment in an interactive tool will de- risk, aid and encourage fleet operators to convert to battery-electric vehicles. This is an important step in the transition to zero emission road freight. This announcement follows on from the launch of the UK government’s transport decarbonisation plan with the accompanying consultation: www.gov.uk/government/ consultations/heavy-goods-vehicles-ending-the- sale-of-new-non-zero-emission-models. It must be remembered that the UK government’s ambition is to use technology to help the UK to reach net zero emissions by 2050.

September 2021

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HMRC confirms CHIEF system withdrawal date You will no doubt have seen the news that HMRC has confirmed the withdrawal dates for import and export declarations in CHIEF. In preparation for the transfer of all import and export customs declarations to CDS, BIFAlink publishes below a letter to traders from HMRC. Further information will be published as it becomes available.

HMRC will be closing its Customs Handling of Import and Export Freight (CHIEF) system on 31 March 2023. It will be replaced by the Customs Declaration Service (CDS). CDS will serve as the UK’s single customs platform for all declarations, and all goods will need to be declared through CDS from this date. Ahead of the closure, HMRC will withdraw services in two stages: • 30 September 2022: the ability to make import declarations on CHIEF will end. • 31 March 2023: the ability to make export declarations on CHIEF and the National Export System (NES) will end.

Further information on the exact arrangements for withdrawing CHIEF services will be provided in due course.

Why is HMRC doing this? HMRC requires border IT systems to be fit for the future and to support our ambitious plans for global trade. This will help to create an environment where businesses can thrive and prosper and take advantage of free trade agreements. CHIEF has served the UK well, but it is nearly 30 years old and it does not match the functionality now offered by CDS. CDS has been developed over a number of years in

Continued on page 14

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September 2021

BIFA Training Customs Declaration Service (CDS) eLearning Course

CHIEF is due to be replaced by the new Customs Declaration Service (CDS) and our online course covers the main differences between the two systems.

COURSE OUTLINE Developed jointly with Agency Sector Management this eLearning course will enable you to submit customs declarations for exports and imports via the new CDS system. There are eight modules including simulation exercises so you can put into practice what you have learned. You will need a 100 per cent pass rate for the final assessment module which demonstrates a successful customs declaration transmission.

MODULE 1 I ntroduction to CDS

MODULE 5 Methods of payment and authorisations

• Methods of payment • Guarantees and authorisations

• Introduction as to why a new system is needed • Functions, features and benefits of CDS • C88/E2 replacement

MODULE 6 Documents, certifications and authorisations indicators

MODULE 2 Data Elements (DE)

• Replacement of LIC99 override statement

• Details of the eight data groups • What are data elements? • Correlation table (DE to SAD/C88 boxes)

• Identify what information is needed to replace blanket document waivers and how to find it • Union, national document codes and status codes • Complete two example scenarios

WHO IS IT FOR? The course is primarily aimed at anyone who has used the CHIEF system before or understands customs procedures.

MODULE 3 UK Trade Tariff and customs procedure codes

MODULE 7 Check your knowledge quiz

• Overview of the UK Trade Tariff • Appendices • Declaration categories • Commodity codes, structure, and additional codes • Tariff classifications videos • Customs procedure and key changes

Answer 15 multiple-choice questions based on topics covered in modules two to six. To pass this module and move onto the simulation assessment, you will need to achieve a 80% pass rate or more.

STRUCTURE

Throughout the course there are exercises to complete and a ‘knowledge check’ at the end of each module. There is also a ‘resource area’ which contains explainer videos, downloads, a glossary and useful links.

MODULE 8 Import and Export Assessment

MODULE 4 Commercial relationships, arrangements and valuation

You will be required to complete either an import or an export declaration simulation assessment, or you can choose to do both. To pass the assessment, you need to input all the information correctly. If you do not score 100%, you will be able to try again.

• Buyer and seller relationship and differences in CDS • Delivery terms • Valuation – additions and deductions • Representation

Available September 2021



    

    

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www.gov.uk/log-in-register-hmrc-online-services and once notified by your software developer www.gov.uk/guidance/list-of-software-developers- providing-customs-declaration-support register for CDS and authorise your software provider • Understand the changes to the Import and Export Tariff, available at https://www.gov.uk/guidance/finding- commodity-codes-for-imports-or-exports You should also consider: • Any training or information your business needs to provide to your staff, for example on the new data elements. necessitated by Union Customs Code legislation • Any changes to finance processes, for example setting up a new Direct Debit www.gov.uk/guidance/set-up-a-direct- debit-for-a-duty-deferment-account-on-the-customs-declar ation-service for a duty deferment account, www.gov.uk/guidance/check-which-type-of-account-to- apply-for-to-defer-duty-payments-when-you-import-goods , or how to pay into your cash account, www.gov.uk/guidance/paying-into-your-cash-account-for- cds-declarations. • Whether your business details (email and business address) match our records, or if they need updating. • Whether your business would benefit from using the optional Trader Dress Rehearsal (TDR) service

www.gov.uk/guidance/how-hmrc-will-introduce-the- customs-declaration-service#TDR to trial declaration processing in a production-like environment.

From page 12

consultation with the border industry. It is a secure platform that has the flexibility to grow in line with the government’s ambitious trade plans. Moving to one system is more efficient than running two platforms, as we are currently doing. Operating one, single system will clarify processes for traders and save money for the taxpayer. Founded on world-leading technology, CDS is already performing well. It is currently used for both Northern Ireland declarations and rest-of-world movements, and has already processed well over 1 million declarations since it went live in 2018. It is fully compliant with our obligations under the Northern Ireland Protocol and operates the full UK Trade Tariff, which CHIEF cannot do. It is critical to the long-term flow of trade, offering flexibility to accommodate future improvements to imports and exports. What happens next? HMRC will continue working with our delivery partners to align their systems with CDS and will write to you again with more detail on our plans to migrate traders from CHIEF to CDS. HMRC will also provide more detail on the withdrawal of CHIEF services, starting with import declarations on 30 September 2022, allowing you and your business time to plan for the changes. In the meantime, there are four key actions you need to take to prepare for using CDS. You must: • Get an Economic Operator Registration and Identification (EORI) number www.gov.uk/eori • Get a Unique Taxpayer Reference number www.gov.uk/find-lost-utr-number • Register your Government Gateway account details

What support is available? HMRC will continue to listen to the border industry and act on your valuable feedback. HMRC is committed to making your transition to CDS as seamless as possible and is exploring where we can best support you, including looking at opportunities to streamline the declaration process. HMRC will continue to work with trade partners and wider industry bodies to ensure we are providing all the support we can to help them throughout the migration process. This includes creating new webinars, toolkits and general guidance. Comprehensive guidance and resources are available at www.gov.uk/government/publications/customs-declaration- service-communication-pack to help businesses and agents prepare for making declarations on CDS www.gov.uk/government/collections/customs-declaration- service . HMRC will continue to keep you updated and provide information, signposting and resources to help you make the transition smoothly. BIFA urges all Members making Customs declarations to use the information above to ensure that they have taken all the necessary steps to be able to migrate to CDS smoothly. As detailed on page 13 of this issue of BIFAlink, BIFA, along with ASM (UK), has developed a Customs Declaration Service eLearning course that will be available later this month. Register your interest at https://bifa.org/training/customs- procedures/customs-declaration-service-online-cm1cbt?l=y For further information on CDS, please contact Pawel Jarza (p.jarza@bifa.org).

Founded on world-leading technology,

CDS is already performing well

14

September 2021

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BIFAlink

Profile

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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 business and enables your team to free up time to focus on developing other areas of your business.

Aerospace logistics demands an exceptional level of service to keep the supply chain running

our solution’s sweet spot – where a 3PL/4PL partnering model can be quickly integrated, and where it is easier to plug in to newer IT systems.” As for Brexit, B&H Worldwide’s European presence has been helpful in supporting customers and minimising risk to their business. Admittedly, in terms of road transport, it has been difficult to avoid issues such as delays with Customs declarations. “Our team is very technical and, because our operators run consignments from start to finish, they can ensure the whole process runs smoothly,” Wilson said. “This is a big help when it comes to planning, mitigating risk and finding the best option for the customer. Around 15 of our staff are currently completing a certificate in advanced Customs compliance.” He pointed out: “Aerospace logistics is a highly specialist business, which needs dedicated individuals to provide service standards that other companies can only dream of to keep the supply chain running. “The key thing is to keep the customer at the centre of everything you do. It is about listening to the customer, exceeding expectations, being proactive and delivering excellent aftercare. We have longstanding relationships with our client base because we have focused solely on the aerospace industry. Being so specialised makes a big difference and allows us to forge a genuine partnership model.” Optimism B&H Worldwide has plans for expansion, such as increasing the footprint of its Auckland warehouse and doubling its warehouse capacity in Singapore to serve the Oceania and Asia region. The Singapore site will include a showcase engine storage facility. “We are optimistic about the future of the airline industry and its recovery; at B&H Worldwide the glass is always half full!” Wilson concluded.

A partnership model

B&H Worldwide’s ability to integrate partners and vendors across the globe was a key factor in the company winning the BIFA Supply Chain Management Award

B&H Worldwide plays a vital role in supporting many of its customers in carrying out annual C-Checks on their aircraft. It provides freight forwarding, logistics, transportation and Customs clearance services, as well as real-time visibility of the entire supply chain through its proprietary FirstTrac system. Gary Wilson, group managing director at B&H Worldwide, said that integrating the supply chain through the use of technology is essential to improving efficiency. He explained: “FirstTrac is our industry-leading cloud-based system which provides our customers with the ability to track their assets and provides real-time visibility of all inventory and in-transit consignments throughout the globe, 24/7.” Proprietary software “Our proprietary software was designed specifically for the aerospace market and is geared towards adding value in the supply chain. “The technology allows us to easily integrate with third-party systems – linking FirstTrac with the back-office systems of our customers to provide real-time information. “This integration enables everyone within B&H Worldwide, our customers and some third parties to see where things are and what is happening, so collaboration between all parties is tighter. That is a big step towards success.” The impact of the pandemic on the aerospace

Gary Wilson of B&H Worldwide

industry is well documented and would have been worse but for general business support initiatives provided by governments around the world, Wilson added. “Airlines have become creative in keeping their fleets airworthy, or have taken advantage during the COVID-19 period to carry out C-checks on their aircraft earlier than usual. Overall, airlines have been smart in planning their maintenance schedules in difficult times. “Our existing aerospace customers appreciate that we have stuck fast with their sector and have not diluted our service by diversifying into other markets. I think we will see new airlines coming into the frame in the future, which will fit

16

September 2021

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YFF Profile

BIFAlink

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Innovation Campus. Given the COVID-19 restrictions in place at the time, Keegan was granted a key worker certificate. This allowed him to travel to Portsmouth docks to oversee the loading of the chamber sections onto specialist vehicles. He was also able to travel with the police escort from Portsmouth to Harwell. Just after the BIFA Awards, Specialist Logistics Services was expecting a vibration plate to arrive from the US for this project. Looking further ahead, Keegan plans to keep developing his skills. “I have done some training with BIFA and I would like to do more to increase my knowledge generally – but also specifically in relation to Customs, to help EU shipments move smoothly and efficiently,” he said. contractual arrangement with the exporter and declare themselves in Box 2 or oblige the exporter to find an established entity who would otherwise assume the exporter’s role. The consequence of representing a non- established entity is that a declaration will have to be lodged by an established party (usually the freight forwarder/customs agent who is legally required to be established) but on behalf of a non-established entity. This automatically means that the forwarder/Customs agent will become an indirect Customs agent by the force of law (for more information please refer to A Guide on the Appointment and Responsibilities of a Customs Agent www.bifa.org/media/4642393/107484 _gpg_customs_representation.pdf) making it jointly and severally liable for the accuracy of a Customs declaration and any Customs debt arising. This requirement is, however, known to traders and, although burdened with regulatory risk, is much more acceptable from the operations and legal perspective. At this point it is important to highlight the fact that the above approach would only apply to declarations submitted in Britain, excluding Northern Ireland where the UCC and other EU regulations still apply. BIFA will be updating Members once further guidance has been issued by HMRC.

“Previously, I had worked for another logistics company for about five years,” Keegan Starkey said. “This involved a lot of exhibition logistics, so I had the chance to travel a lot. Then a job came up at Specialist Logistics Services and it was a case of right time, right place.” He continued: “Each project is like a little mission. You have to figure things out, and it is never the same twice. It can be 10 times the effort but it is also 10 times the reward compared with sending a parcel.” In 2020, for instance, Specialist Logistics Services brought the six sections of the UK’s largest space test chamber from a manufacturer in Ortona, Italy, to the Harwell Science and

The non-established exporter: a follow-up

In the previous edition of BIFAlink we raised the issue of the export declaration completion rules where the exporter was a non-established entity as, despite the fact that the UK left the EU’s Single Market and the Customs Union, these completion rules were still aligned with the UCC guidance. The Secretariat has since queried the completion rules on the grounds of the post-EU Exit legislation, which does not incorporate the EU’s definition of exporter into the UK legislation and says the following: The Customs (Export) (EU Exit) Regulations 2019: Eligibility of persons to make export declarations 12. – (1) A person may make an export declaration in respect of goods if the requirements in paragraph (2) are met by that person.

(2) The requirements are – (a) that the person is able to – (i) make the goods available for examination, or (ii) secure that the goods are made available for examination; and (b) that, except where regulation 13 applies, the person is established in the UK. We now understand that HMRC has concluded that the lack of the EU’s definition of exporter effectively re-aligns export and import declaration completion rules. What it means for freight forwarders and customs agents is that they will be able to use the details of a non-established entity in Box 2 of an export declaration just like it is currently allowed to use the details of a non-established importer in Box 8 of an import declaration. They will no longer be required to either enter into a

September 2021

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