Brexit smoothing the transition for EU parcels and supply chain operators

Transcription

1 Prime Vision B.V. Olof Palmestraat LR Delft The Netherlands Tel + 31 (0) info@primevision.com Brexit smoothing the transition for EU parcels and supply chain operators Our Brexit white-paper takes a holistic, deep-dive into the implications of variable Brexit scenarios and the possible ramifications. We evaluate the new Customs landscape and what organisations can do to prepare. We suggest some solutions to best help your business and explain how investing in technology will help smooth the transition. Whether you are receiving or sending goods to the UK, after March 2019, it is likely the Custom Controls between the UK and the EU will change. Or not. And herein lies the main issue. Brexit is not the problem; the fact that no-one can confidently predict the final outcome makes it impossible to adequately plan for. At present, the possible scenarios to consider are: No Deal Brexit. Hard Brexit. Soft Brexit. Delayed Brexit. Immediately from March 2019, the UK withdraw from the EU forcing Full Customs Controls with high friction trade. A controlled withdrawal, with a Hard trade agreement to be enforced in Dec Reduced Customs Controls Lower friction trade. Enforced after 2020 the least disruptive withdrawal strategy Minimal Customs Controls Near-frictionless trade. No foreseeable change but continued commitment to withdraw. Possible future indecision and disruption until a solid roadmap is agreed. Prime Vision White Paper - Brexit, smoothing the transition for EU parcels and supply chain operators page 1

2 No Brexit. Referendum. Brexit decision permanently cancelled. No change. No Customs Controls Frictionless trade. De-escalation of prepared resources. 2nd Brexit Vote. Further indecision. Planning continues for an unknown outcome. In the UK opinion is split. The referendum was almost 50/50. The same differential is seen through all the political parties. Depending on which politician or expert is polled, any of the above scenarios is a viable possibility. So, in reality, the postal and logistics company have to plan for all eventualities. Being the exact nature of the final regulations, legal responsibilities and accordingly, the required manpower levels are as yet unknown, it makes establishing a truly effective Brexit Strategy an impossible and costly task. In Summary. Multiple unknown scenarios mean planning multiple solutions. What will change? Today within the EU most goods are in free circulation and can be imported with minimal customs control and have no import duty or Value-Added Tax (VAT) to pay. In the event of Brexit. The current free trade agreement between the UK and the EU will change. In the No Deal scenario, if the UK leaves the EU without an agreement Imports from outside the EU are treated differently. Business will have to make an import declaration to customs, and on most goods pay import duty, and import VAT (plus VAT on import duty). In Summary: Change is coming sooner or later, so be prepared. What does this mean for parcels and supply chain operators? This depends on how your business chooses to operate post-brexit. Large parcels companies that already have international operations will have to scale up customs operations to handle the additional volumes from the EU. Medium to small companies may choose to use the services of a supply chain company that specialises in customs related activities or register and prepare themselves. Some may decide to become an Authorised Economic Operator (AEO) for imports and exports. AEO status is an internationally recognised quality mark that remonstrates the international supply chain is secure and customs controls, procedures are efficient and meet EU standards to help fast track procedures. In Summary: Change is coming sooner or later, so be prepared. Be prepared for additional UK Border Checks. The HMRC is already preparing for a three-fold increase in volumes to ensure revenue protection. A majority will be handled by the IT systems for electronic approval and require only small volumes for physical sampling. page 2

3 However, operators that do not meet the procedures will be profiled and parcels inspected. Additionally, Border Force (BF) are expecting to increase their operations to look for illicit goods. These agencies are preparing flexible and combined resources anticipating that parcel companies will use alternative supply chain routes into the UK, for example, fast delivery services (1-2 days) parcels may use road freight (channel tunnel,) or for slower services or economic reasons may use sea freight and Roll-on Roll-Off (Ro-Ro) ferries. In Summary: Plan your logistics to avoid Customs bottlenecks, all freight/drivers will have additional procedures and checks. What can I do prepare my parcel for a smooth journey? In addition to providing electronic information to HMRC. It is the responsibility of the sender to complete a customs declaration. Under international postal agreements, the sender must complete a customs declaration (form CN22 or CN23) which in most cases should be fixed to the package. The declaration includes a description of the goods, quantity and the value and whether they are gifts or commercial items with a tariff code.. In Summary: There will be more emphasis on the sender abroad to complete the Customs declaration. How labels ensure frictionless delivery.. Depending on the shipping value, senders have to attach either a CN22 or CN2 form. HMRC anticipate both will remain as 60mm x 40mm. However, the CN23 template has more lines, meaning it can be folded and attached to the parcel in a transparent envelope, ensuring that as much information as possible is on the outward, visible side of the parcel. In Summary: Customs labels that are easily read will play an important role in making the process more effective. Under customs law, the importer is legally responsible for the information on the declaration. If no declaration is made, or the information is inaccurate, the package may be delayed while the Border Force makes further enquiries, or in some cases, the package and its contents may be returned to the sender or seized by the Border Force. In Summary: Accurate and complete Customs declarations avoid disruption. page 3

4 How will technology smooth the transition? Whichever Brexit scenario is adopted, the UK Government has made it clear that technology will play an essential part. The day in the life of a Parcel between the EU and the UK and vice versa is about to change. We must consider not only the physical journey and how it is processed, but also the data journey and the processes that need to accompany these. Parcel Data. An increased need for data will be required. Parcel operators will need to classify goods following recognised codes, provide value, size and weight information, plus validated sender and receiver information. The demand for more data will increase the need to integrate the parcel and supply chain operators, automation and back-office systems with the customs declaration systems. This will ensure data can be shared with all the organisations that are directly or indirectly engaged to help smooth a parcels journey. In Summary: Data sharing technology is key to ensuring a parcel has a smooth journey. Parcel Preparation. As well as a completed CN22 or CN23 customs declaration label, the stated delivery address should match the information declared to Customs or printed on the CN23 label. For the larger parcel distributors printing and creating labels at the sending location is common practice and often combined with the barcode information used to track and route parcel to the sender. Applying labels with the correct information is difficult to fully automate due to the different sizes and shapes of parcels. The complexity of weighing, determining the size, and applying a label while the package is on a conveyor requires sophisticated equipment. The alternative is to use manual workstations, where an operator places a parcel on a weighing scale, with a camera above to take a picture, then a combination of OCR with human data entry, enables the correct label to be printed, and manually attached. In Summary: Semi-automated technology to add more labels to parcels will be required. Parcel Processing. Sorted by automation or by hand, information is relayed by either printed barcodes or handwritten address labels. The trend towards automation promises increased efficiency and obviously significantly reduced human errors during sorting. Over the last few years, the emphasis is on routing the parcel to the sender in the most efficient and fastest way. But post-brexit, Parcels originating from the EU or UK will now have the added complication of a Customs compliance. This will place more importance on quickly matching the parcel with its corresponding Customs declaration. Throughout the parcel s journey, it will be processed by automation, in many cases aided by cameras and scanners. Recognition technology will play an increasingly crucial part in the automation of future sorting processes. page 4

5 Recognition technology, such as Optical Character Recognition (OCR) is optimised to ensure swift delivery. This solution can recognise customs information such as the presence of a CN22 or CN23 label and specific details on the other labels to help not only delivery and customs compliance but assist in revenue protection for both the HMRC and the parcels and supply chain operators. In Summary: Recognition technology to support revenue protection will become crucial. Parcel Tracking. The level of tracking, is often determined by the service that the receiving customer requires. Ensuring the correct quality of service requires parcels to be tracked for either customer satisfaction or regulation. After Brexit with the added complications of Customs compliance, parcels may become delayed, or use alternative supply chain routes. Therefore, the more tracking information that is available enables this to be reported, and the service improved. The journey of a parcel requires many assets such as containers and vehicles to be used along the way. There are many established and emerging technologies supporting the tracking of assets. In Summary: Tracking assets to maintain and improve Quality of Service for EU parcels, will have an increased emphasis. Prime Vision. Solutions for Success Prime Vision is an international solutions provider specialising in solutions for the Postal and Logistics Industry. Our development team continuously look at innovation and are proud our experience shows through in our products. We have solutions in the market that directly address the variable challenges created by an unpredictable Post-Brexit landscape. MMS: The complete data and platform solution MMS is the backbone and central platform of most Prime Vision solutions. It s a business-rules engine that was developed to communicate sorting decisions from multiple sources of data. The primary objective of the MMS solution is to integrate data from operational systems to IT back office systems, helping avoid unnecessary duplications while supplying the data needed to make accurate and efficient decisions. The system enables the integration of operational hardware, such as the cameras and scanners used to recognise barcodes, addresses and labels, and use harvested and supplied data to support processing and decision-making throughout the process. MMS will enable the integration of operational hardware to include customs data for printing labels and declarations, helping automate the accurate printing of CN22 and CN23 labels in the post-brexit environment... In Summary: The MMS platform was developed to support the journey of a parcel, from start to finish, integrating its physical journey with its data journey. page 5

6 Prime Vision Manual Workstations Prime Vision supply all the technology necessary to facilitate the operation of manually-operated Workstations. This enables the operator to weigh, dimension and print the labels required to integrate the parcels into the automated process. Also, with Brexit in mind, the workstation can also scan and recognise information on the parcel and match it to the appropriate customs data. By utilising the description, size and weight, the system can automatically calculate the correct tariffs to be applied to the labels, ensuring proper import duty and VAT values are identified. MMS can also ensure that stated descriptions match the recognised customs categories, thus avoiding further disruption by HMRC or BF agency staff. In Summary: Prime Vision provide solutions for manual workstations, working with partners or integrating components. Recognition to support Automation During its journey, a parcel will be processed by both machines and humans. At every stage, it will require something on the parcel to be identified, whether it be a barcode, address or customs label. With the increase in volumes of EU parcels treated as international parcels, the need for automation can only increase. Many operations will scale up or create new international gateways; however, these are already overstretched with the unprecedented growth in E-commerce; therefore, new facilities and increased automation will be required. State of the art recognition technology will be essential. Prime Visions Barcode Reading Solution sets the industry standard in advanced barcode reading, with the ability to recognise and rectify issues caused by damaged or poorly printed labels. Our Hand-writing OCR solution can accurately read handwriting. Of particular interest, CN22 and CN23 labels are often handwritten as they are applied after the main address label and barcodes are machine printed. This places greater emphasis on OCR systems being able to recognise this information, especially on an already cluttered and small label. Machine Learning. By using artificial intelligence to learn as label images are collected with many variations, so defined pattern recognition is not sufficient, hence the increased adoption of machine learning. This approach has proven very useful with CN22 labels and the irregular addressing from international customers. Summary: Prime Vision provides state of the art recognition solutions that support all aspects of parcel processing including CN22 label recognition. Asset Tracking Depending on the service a customer requires the tracking information will vary. Regarding Brexit, with the increased volumes of parcels as are necessary for customs checks, there is increased probability parcels or consignments of parcels will be delayed. Whether the packages are in a container, roll cage or vehicle it is essential to know their whereabouts of these assets. page 6

7 Prime Visions Asset tracking solution is both costs effective and scalable, using recognised technology such as RFID and BLE. By sharing the tracking information with all parts of the supply chain, customers can quickly identify bottlenecks, re-assign resources and assets, and pre-empt logistical complications contributing to an overall improvement in service quality. Our BLE solution is easy to deploy and by utilising existing infrastructure used across all stages of the supply chain, benefits from low-cost investment for maximum visibility of assets. Summary: Prime Vision provides an asset tracking solution to support the tracking of EU parcels to improve quality of service. Conclusion In this paper we have summarised the changes Brexit will bring to the parcels supply chain, identifying the new Customs processes and the implications on EU supply chain operations. Along the journey of a parcel, we have suggested how parcel supply chain operators can ready themselves for the changes, and hinted at some of the available technology to support the transition to reduce trade friction and create growth. While the future landscape of a post-brexit industry contains many unknown quantities, we would like to consider Prime Vision offer our customer technological solutions that allow our customers a stable foundation on which to base plan their viable Brexit strategy. Political turmoil, requires a stable partner, Prime Vision provides solutions for every outcome. If you would to further discuss the implications of Brexit and how Prime Vision could assist your post- Brexit planning, please our sales department via sales@primevision.com. page 7