Brexit: guidance for ports and terminals
While not responsible for the arrangement of cross border freight, ports and terminals in both Great Britain (GB) and the European Union (EU) are critical nodes in the international supply chain. Handling the freight at the point of export or import and in some cases becoming the border control post (BCP). The three-phase model to import changes adopted in GB means that while some changes took affect from 1 January 2021, the full range of changes will not come into force until 1 July 2021.
Of course, the EU implemented full customs processes for all goods arriving from GB from 1 January 2021. In both cases, new frontier controls need to be developed, introducing bureaucratic requirements for checks at the border. New IT systems have/are being developed to cope with these new requirements to ensure so far as is reasonably practicable a smooth flow of traffic. It is estimated that over 14,000 trucks each day cross the border between GB and the EU. This volume of traffic necessitates robust, efficient systems to minimise disruptions.
While some anticipated long queues at ports either side of the border, these did not materialise in the first days of 2021. Recognising that volumes were generally very low through this initial period, the expectation is that these challenges may still arise as volumes start to increase in line with normal expectations.
On 24 December 2020, the EU-UK Trade and Co-operation Agreement, (TCA) was finalised between the UK and the EU. This agreement in part eases a number of concerns about the introduction of new tariffs on goods traded cross border. Despite the TCA however, customs declarations for goods traded cross border will still be required, as too will checks that might affect existing operations at ports and terminals. Border checks will be required to ensure that imported goods meet the relevant standards in areas such as food and product safety and disease control, to prevent smuggling and illicit activity, and to comply with international obligations.
New systems, processes and changes to current infrastructure may all need to be considered. This article takes a structured look at likely considerations for ports and terminals as we move into 2021 and beyond.
Great Britain (GB) port operating models
Ports in Great Britain have elected to operate under either a pre-lodgement or temporary storage model, or a mixture of both.
Under the pre-lodgement model, to achieve customs control whilst maintaining flow, traders will be required to submit a customs declaration in advance of goods boarding on the EU side. The carrier (ferry, train or plane operator) must ensure that all goods have the appropriate declarations before they board for the cross border transit. The trader must also communicate to the person in control of the goods (driver or carrier) by the time they arrive as to whether the goods are cleared to proceed on their journey or need a check. More information can be found in our Brexit FAQs page.
Port operators using the pre-lodgement model must endeavour to take reasonable steps to ensure that goods do not arrive at the intended port of discharge without pre-lodged declarations having been made. All locations using the pre-lodgement model will be grouped into one of three categories that will outline distinct reasonable steps.
- Category 1: ports with extremely limited capacity to hold uncleared goods within the principal’s approved area
- Category 2: ports with some capacity to hold uncleared goods within the principal’s approved area
- Category 3: ports with capacity to hold all uncleared goods within the principal’s approved area
Temporary storage explained
Goods imported from the EU can be stored temporarily under customs control before they are released to free circulation, exported or placed under the outward processing procedure, or placed under a special procedure (inward processing, customs warehousing, authorised use, or temporary admission). This will mean traders can defer making a customs declaration and paying duties and taxes for up to 90 days from the date the goods are presented. An authorisation is required to operate a temporary storage facility. More information can be found in our Brexit FAQs page.
Good communication will be critical as stakeholders will need to familiarise themselves as to which ports are implementing pre-lodgement, temporary storage or mixed models and be aware that hauliers may need to proceed to inland sites for customs controls to take place.
There could be new opportunities for ports, who might consider an application for free port status. This is a concept where certain areas could be exempt from customs duties and tariffs to enable added value processes to take place. The UK Government is currently considering applications for the development of a number of free ports. Stakeholders considering an application should concurrently engage with their insurance broker to ensure that adequate cover is in place for any additional liabilities that might attach through the provision of new services.
Full customs declarations were required from 1 January 2021 for goods arriving in the EU from GB. After extensive preparation, affected EU ports were ready for the change and required customs checks. Changes for UK ports will be felt over the next six months as the various deadlines pass. While individual impact assessments will determine specific needs for change, it is likely that all ports will have to consider a degree of change in their operations.
Changes and consequent challenges will vary by location and operation type. A series of new shipping routes and services have already been announced in the last months designed to address perceived challenges. These services provide direct shipping routes within the EU, bypassing the UK. While this might provide opportunities for some, inevitably it will reduce the service provision of others. Some operators view the changes as a potential opportunity for diversification, anticipating a modal shift from RoRo to containerised traffic or a general increase in volumes of traffic on particular routes.
The changes and pre-arrival requirements implemented by EU ports inevitably have an impact on UK ports too. Trucks will be turned away from the UK port of departure if they have not fulfilled the customs requirements to cross the border. Denial of passage, even in small volumes, places pressure on existing processes and risks causing bottlenecks and delays. Planning for additional on or off site holding areas is a physical challenge that ports might need to consider. Some EU ports have factored in large contingency buffer parking locations to address this challenge, there are 700 such truck parking spaces available at the Hook of Holland ferry terminal, for example.
Newly formed multi-disciplinary task forces at ports in the EU and GB have been impact testing for many months. Assessing not only the potential impact of the changes in terms of customs capacity, volumes of traffic, space and expertise, but also to identify opportunities. Consideration has also been given to media campaigns raising awareness of their respective customers. For GB ports, this activity will likely increase in the coming months as the 1 July 2021 deadline approaches.
Investment has been required for the development/replacement of existing IT infrastructure. Several EU ports have invested heavily in new systems to ensure preparedness for the end of the transition period.
France has developed the SI Brexit system, designed to prioritise fluidity of freight in and out of France. The SI Brexit system is an interface between the carriers at French Ports and the Eurotunnel terminals and the French customs declaration service. SI Brexit allows traders and hauliers to consolidate multiple consignments under a single “declaration” and allow the haulier to present one single Movement Reference Number (MRN).
The trader, agent or haulier downloads the application either from the customs website or via the operator. The barcodes of the MRNs are scanned and paired with the data from the number plate of the truck. These paired data are sent to the Customs DELTA or Transit NSTI systems for risk analysis and clearance. The number plate is scanned at the port to determine routing (green for goods in transit or those with a European Assessment Document (EAD) that do not need to be inspected, orange for those with goods to be inspected). After boarding, the notification of exit is sent automatically.
The Netherlands has developed the Portbase system that operates on a “no document no transport” basis. Pre-notification of customs documents via the Port Community System of Portbase is mandatory at all RoRo ferry terminals in the Netherlands. If pre-notification is not completed the transporter will not be granted permission to board. Pre-notification can be completed as an exporter or importer, but the forwarder, customs agent or transporter can do this as well. Exporters and their customs agent or transporter will need to register for access to the Portbase system in order to submit the pre-notification of import and export declarations. Traders need to make clear that agreements are in place for this and register for the required Portbase services.
Ports in the South of Spain, such as Algeciras Port Authority, use the integrated technology platform Teleport 2.0. A similar integrated IT system will soon be rolled out to the northern ports of Santander and Bilbao. Teleport 2.0 aims to obtain a seamless integration of the port throughout the logistic chain. The system will support all the services encompassed by the logistics chain and make them available to the port logistics community, including integrated services for the ship’s management, services for notification of dangerous goods and export declarations, and integrated service for cargo trucks. The information service element of Teleport 2.0 is designed to provide complete traceability to importers and exporters of the cargo throughout the logistics chain, and those who register can trace their goods via the online e-service.
A GB haulier would make or arrange to make the Entry Summary declaration (ENS) into the Import Control System (ICS) in Spain, in doing so obtaining the MRN thereafter logging into the carrier system and linking the vehicle registration number to the MRN. The system checks the first four digits of the integrated Tariff of the European Union (TARIC) code, number of packages and weight. For groupage loads, all consignments must be entered individually. The truck cannot proceed to GB check-in unless goods have been cleared for export, the data have to be sent to the carrier in advance of the truck arriving at the GB port or the driver must have the information available.
Since November 2020, all import declarations have been submitted to the new Automated Import System (AIS). Export declarations will be submitted using the existing Automated Entry Processing (AEP) system.
All goods being exported from Ireland to GB, regardless of the mode of transport, will require an export declaration that also contains the Safety and Security (S&S) declaration details. For goods, being exported via RoRo a pre-boarding notification will also need to be completed prior to arrival at the port of departure in Ireland. The AEP system handles the validation, processing, duty accounting and clearance of customs declarations.
The Customs RoRo Service will provide a range of services to facilitate the movement and control of goods and vehicles when moved by scheduled ferry between Ireland and Great Britain.
RX SeaPort is a digital system that joins up the data submitted and required by all parties at the Port of Zeebrugge. The data are registered for imports and exports through an e-Desk. This can be done manually, through a linked data connection or through customs software. Drivers will not be allowed to proceed to the Zeebrugge Terminal if customs declarations have not been pre-notified through the e-Desk of the RX Seaport system. Information on pre-registration of customs data via the e-Desk can be found at Services - RX Seaport.
The pre-notification of customs documents in Antwerp is done via the Port Community system of C-point. This pre-notification can be lodged by the exporter, the forwarder, customs agent or the transport company. For this an account is needed on C-point. Customs agents often link their customs software to this platform in order to automate this flow.
A potential challenge for GB port operators in the coming months is likely to be infrastructural changes and as a result, space. Ports across the EU have invested in a wide range of infrastructure projects in the last two years, including additional parking/holding capacity; customs control points, new roads and signposting.
In the coming months, some ports in GB will become border control posts (BCP). Certain goods, for example those subject to Sanitary and Phytosanitary Controls, will only be permitted to enter Great Britain through specific ports/BCPs where physical checks and the taking of samples will be carried out. To be designated by the competent authority, BCPs must comply with requirements on facilities, equipment and staff. Consideration might need to be given to the impact on the flow of existing traffic, direction for affected traffic and holding areas for such checks to be completed.
Space generally will require careful assessment and planning especially where operators look to diversify. For example, your operation will need to be able to cope with delays, such as caused by weather, IT functionality or related to personnel. Queues of trucks have the potential to build quickly, requiring not only space to hold the vehicles safely but also facilities for driving personnel. Physical security of holding and parking areas must also be considered as well as the potential impact on the local hinterland and community.
Where assessment concludes that the flow of traffic has or will change, it would be prudent for operators to consider traffic management systems that could be implemented aimed to improve efficiency and increase safety within the facility.
Those ports, who currently provide services for passengers to and from the EU, might also need to consider additional provisions for passport checks and security controls at the frontier for individuals arriving from the EU.
While reports from industry have been generally positive following the end of the Brexit transition period, it must be recognised that volumes remain low. Stress testing of the various new systems at capacity volumes is yet to take place. While the six month phased implementation for imports into GB will pass very quickly, there might be opportunities for UK ports to assess the experience of their EU counterparts and consider both good and bad experiences when preparing their facility and business planning.
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