Clear through Customs: the edge for cross-border shipping

Customs clearance is becoming an increasingly important part of the shipping landscape as cross-border volumes grow hand-in-hand with expectations for reliable and speedy international delivery. James Cartledge speaks to UK specialists Customs Clearance Ltd. Ecommerce is changing the face of the parcel industry around the world, but as consumers grow increasingly confident about shopping online through foreign websites, there is also growing pressure at the world’s border crossings to get more and more items through customs.

In Europe, officials in the European Commission are now working on how they might further encourage cross-border e-commerce, which could help Internet merchants expand their markets across the continent – further accelerating the opportunity for delivery companies that can keep up with merchant and consumer expectations.

Rudee Bertie, joint managing director of UK firm Customs Clearance Ltd (CCL), says Internet shopping is without a doubt the big opportunity for growth at the moment from his perspective in the industry, but along with the surge in volumes is coming a greater impact from border control and compliancy regulations.

Bertie, who founded the company in 1999 with his colleague Brian Kelly, says the landscape of customs clearance is now changing, particularly for postal operators who have previously had the edge over international couriers and freight forwarders in being able to get high value consignments ‘under the radar’ of customs authorities.

“The mail and parcel post world has had life too good for far too long,” he says.

“With the ever-increasing use of the World Wide Web and the dramatic growth in e-commerce, postal operators are dealing more and more with global e-tailers. They have been left with little choice but to begin to declare consignment values on import, and to become more compliant and accountable for their actions.”

Specialists

Customs Clearance Ltd managing director Rudee Bertie

Based in Isleworth, West London, CCL has been in the business of keeping customers compliant for 13 years thanks to a detailed understanding of a complex and ever-changing marketplace.

The company specialises in air and ocean customs clearance services, gateway customs clearance for the EU and UK, cross-border logistics, freight handling, processing and redistribution, warehouse management and returns logistics, as well as other offerings including consultancy services.

At the moment the company is seeing particularly good growth opportunities with clients from the USA and Canada, as well as South America and the Far East – and the firm has recently opened an office in Hong Kong to assist the business there.

Bertie says the operation in China is one example of how the company responds to a changing marketplace, always looking for ways to improve services, understand the regions in which they operate, and make connections face-to-face.

CCL clients tend to be small to medium-sized freight forwarders and international courier companies that do not run their own internal import departments, or do not specialise sufficiently in the UK’s ever-changing import regulations.

“Whichever way you look at it, these companies want to run a professional and compliant business, and to do this, they engage CCL to deliver a professional service and give them an edge over their competition,” says Bertie.

Pricing gap

As cross-border parcel shipping grows in importance, Bertie says that among the biggest mistakes that shipping and forwarding companies tend to make is not understanding their full legal obligations on shipping abroad, and neglecting to include the customs broker very early on in the process of arranging cross-border shipping, and factor in the customs handling costs.

“They send out their sales personnel, armed with brochures and rates and nice software programmes able to track freight and parcels,” explains Bertie, “They supply pricing to their customers which covers the physical task of getting a shipment from point A to point B. They promise the Earth at a nice, competitive price, then because they look like good value, they get the business and they ship the goods.

“The freight goes into transit, but before it arrives at its final destination, it comes across border protection and customs control, but by then the business has a problem on its hands.”

Bertie says the gap in shippers’ pricing plans most often require the business to cover unexpected costs, leaving them with lower margins and sometimes even out of pocket, making a loss on the deal.

“That’s a very frustrating scenario,” he says. “It’s extremely important to involve the customs broker at an early stage. The business needs the customs broker’s understanding and knowledge when building costs and quoting on international logistics operations which involve entry declarations and payment of local import duty and VAT. Make no mistake, it’s a very specialised area and one which should not to be under estimated.”

Reducing delays

Using an independent customs broker like CCL has the advantage of expertise in the frequent changes in logistics and customs requirements getting through the UK border, dealing with shipments on a case-by-case basis.

Bertie explains that a broker can keep their customers ahead of the pack, providing an assessment to highlight areas of concern, and use bespoke methods to ensure each client is compliant and facing an efficient passage through the border.

When HM Revenues and Customs (HMRC) does check a consignment imported into the UK, which usually happens at random, if all the documentation is in order, shipments will clear customs without further delay. If problems are found, the item will be selected for what is called a “Route 2” inspection, facing further delay as the item is physically checked.

Bertie says a company like CCL understands the language of HMRC and can therefore negotiate issues and get consignments moving. “For more serious situations, which might demand a more expert level of handling, CCL is confident in its ability to iron out any difficulties, as well as ensuring the client is kept fully briefed, every step of the way,” he says.

One recent development at CCL is a new software package the company has produced called Bulk Classification, which takes catalogue and stock-keeping unit data and categorises the harmonisation codes and duty rates for respective commodities across the globe.

“It’s already proved to be a very popular tool and now CCL is opening it up to the wider market,” says Bertie.

The European Commission is now taking a closer look on how it might bring down Europe’s national boundaries when it comes to cross-border parcel shipping, having surveyed the feelings of Internet shoppers.

The noises coming out of Brussels suggest that better awareness among e-retailers and consumers about the options for shipping across European borders, along with the end of inflated domestic delivery rates for items that have crossed a national boundary, could prompt accelerating growth in cross-border Internet retail.

A green paper is expected towards the end of this year, but Bertie says so far there’s not much confidence that the EU Commission will improve matters.

“We say ‘bring it on’ – but at the moment, there’s plenty of talk, and little action,” he says. “The ever-changing EU regulatory environment and our own UK government controls combine to make it all the more vital for businesses to use our services. As long as there is border control of any kind, there will be a need for organisations like CCL – expert, neutral, forward thinking, compliant and user-friendly.”