DACHSER Malaysia

Delay of Brexit - What is still to be considered?

As is known, early general elections for the House of Commons are scheduled for December 12, 2019 in the UK. The EU has also agreed to extend the Brexit deadline to January 31, 2020. The danger of a no deal Brexit is thus averted for the time being. If an agreement on the negotiated contract is reached before January 31, 2020, the agreed transitional period will initially remain in force until December 31, 2020. 

Regardless of whether it is a "soft" or a "hard" Brexit, a customs authority of the respective recipient is essential for the processing of shipments to and from the UK. Therefore, we ask our customers to continue to advise their recipients to provide us with the necessary customs authority.

We will keep you up informed about further developments.

Incoterms 2020

A new version of the Incoterms will take effect on January 1, 2020, and will include a number of changes. The terms of delivery issued by the International Chamber of Commerce regulate essential buyer and seller obligations in international trade, such as transfer of goods to the buyer, transport costs, liability for loss of and damage to goods, and insurance costs.

With the adaptation of the Incoterms 2020 to current global trading practices, the new version is very up-to-date and practice oriented. The aim of the revision was to make the Incoterms clauses more user-friendly. For example, their presentation has been revised to make it easier for users to select the appropriate clause. In addition, the order of the clauses has been changed, and revised user instructions have been added to each clause.

In terms of contents, significant changes have been made to the Intercoms 2010, in particular the following:

• Different coverage levels in CIF and CIP: As in the past, the seller is still obliged in the Incoterms 2020 to take out transport insurance at their own expense in clauses CIF (Cost Insurance Freight) and CIP (Carriage Insurance Paid). In contrast to the Incoterms 2010, however, the two clauses now provide for different minimum coverages. The minimum coverage to be observed when the CIF clause has been agreed remains unchanged. The transport insurance to be taken out by the seller must continue to at least correspond to the coverage in accordance with the (C) clauses of the Institute Cargo Clauses or similar clauses (insurance of named risks). If the CIP clause is agreed, the seller must now provide insurance coverage in accordance with the (A) clauses of the Institute Cargo Clauses (all-risk coverage). Both the CIF clause and the CIP clause allow the parties to the contract to agree on insurance coverage that differs from this.
• Inclusion of security-related requirements: Security-related requirements for the transport of goods have now been included in Rules A 4 and A 7 of each Incoterms 2020 clause. As with other the Incoterms clauses, it should be noted that the Incoterms clauses only directly apply to the parties to the sales contract and are not the subject of the contract of carriage.
• The Incoterms 2020 contain regulations for transporting with one’s own means of transport in FCA, Delivery at Place (DAP), Delivery at Place Unloaded (DPU), and Delivered Duty Paid (DDP).
• For goods sold under the FCA (Free Carrier) clause and intended for sea transport (such as goods in containers), FCA is stipulating a new option in the future. The buyer and seller may agree that the buyer shall instruct its freight carrier to issue an on-board bill of lading to the seller after the goods have been loaded. At the same time, the seller is obliged to hand over this on-board bill of lading to the buyer. This is typically done through participating banks.
• Renaming of DAT to DPU (Delivered at Place Unloaded). According to the Incoterms 2010 DAT clause, the seller delivered the goods as soon as they were unloaded from the means of transport at a “terminal.” However, according to the Incoterms 2010 application notes, the term “terminal” was not to be understood from a technical point of view but meant any unloading location. This fact was taken into account in the Incoterms 2020 by renaming the previous DAT clause to DPU (Delivered at Place Unloaded) for the sake of clarity. That means that in the future, any (agreed) place can be the place of destination.

The Incoterms apply between the parties of a (national or international) sales contract and address – but are not limited to – special rights and obligations within this contractual relationship. On the basis of a uniform definition guaranteed in this way, subsequent problems of interpretation or discrepancies between the parties to the sales contract are to be avoided. It should be noted that the Incoterms, due to their character as GT&C-like provisions, do not constitute statutory provisions and thus only become legally binding if they have been effectively agreed between the parties to the sales contract by means of a corresponding reference (for the Incoterms 2020, this is also possible before 1/1/2020). Irrespective of this, in individual cases conflicting statutory provisions still take precedence over an Incoterm clause.

The Incoterms were revised by 500 experts from more than 40 countries.The clauses are recognized worldwide and are in use in more than 30 different languages.

Hard Brexit: Important measures beforehand

Even though there are some movements in the negotiations between EU and UK, still the “No deal” Brexit at the October 31st, 2019 cannot be excluded.

The consequences of a withdrawal without a deal on 31st October, especially for the movement of goods to and from the UK, are well known. First and foremost, longer waiting times would be expected due to border controls and customs clearance of all goods in accordance with WTO rules.

DACHSER will take appropriate measures to ensure that all goods arriving/leaving the UK after 23.00 GMT (00.00 CET) on 31st October are cleared and taxed accordingly.

With this letter we would like to summarize again the most important points and measures to keep the effects and delays in delivery for our customers as low as possible.

In case of Hard Brexit, the following information and documents must be available for customs clearance before the goods are collected:

• Consignment note
• Commercial invoice / pro forma invoice
• Packing list / delivery note
• Export accompanying document (can be issued by us if necessary)
• Preference documents and other product-specific documents, only if possible and required

Please make sure that these documents contain the following information: Sender with EORI number, recipient with contact details, importer if different to recipient with contact details, sequential invoice number, Incoterms, number and type of packages, description of goods, country of origin, Taric code, value of goods, currency, gross/net weight.

Please pay attention to a high data quality of the information - the documents must fit definitely to the respective physical transmission.

If the documents are made available to us in electronic form, they should correspond to a resolution of 300dpi if possible.

In addition, we need the contact person for customs including the contact details of your consignee/importer (e-mail address) so that we can contact them in order to obtain the necessary customs power of attorney. We need these in order to be able to carry out the necessary customs clearance. Without the power of attorney we can not do the customs clearance.

Please do also note, that we also will need more detailed shipment information like number and type of packages, description of goods, value of the goods, if you have got shipments to Ireland via UK territory, as we will have to issue a transit procedure through UK. For the beginning we also recommend that you add a T2L to those shipments as we are not yet sure, if Ireland customs will accept T2 as a proof for goods in free circulation of EU after transit via UK. 

Within our eLogistics application the possible incoterms will be changed due to the customs. At the beginning only FCA/EXW or DAP are possible in eLogisitcs in order to ensure the process. Also the EDI information regarding the incoterms have to be adapted, the responsible person from your branch will contact you in order to align the necessary changes.

We ask for your understanding and cooperation so that DACHSER can make your flow of goods as efficient and trouble-free as possible in this exceptional case of hard Brexit.

The most important measures for preparation we have stated additionally in our Brexit checklist.

Please do not hesitate to contact your DACHSER branch if you have any further questions.

The new DACHSER magazine is here!

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Brexit – what does it mean for Air & Sea Logistics?

We face the possible event that the United Kingdom will leave the European Union by the end of October 2019.

This will affect shipments from and to the UK and delays are to be expected. Reasons are amongst others that a higher percentage of shipments has to be processed by customs authorities and that European shippers might switch to Air Freight to avoid border controls.

We expect delays particularly for shipments that do not move into the UK directly or out of the UK directly but via continental Europe. For example if Sea Freight shipments are unloaded in Rotterdam and then forwarded to the UK via truck and ferry:

• Fiscal representation in continental Europe will no longer be possible for goods to the UK. Instead, a transit procedure must be opened.
• The expected problems in Calais/Dover will cause delays in the delivery of goods to the UK.
• Incoterms for subsequent deliveries from the EU to the UK may also have to be converted if necessary, as costs for customs clearance have to be included.

Therefore we strongly suggest to ship directly to the UK whenever possible, at least for some time following the Brexit until things clear up.

In addition to that, you can also find a “Brexit checklist” here.

Plan ahead for the Golden Week holidays in China

China celebrates its National Day on October 1, followed by a week-long holiday. During the Golden Week from October 1 to 7, many businesses will be closed; factories and production sites will stop their operations. Some of them may resume work later than the official holidays.

Therefore, the pre-holiday period is busy for logistics and transportation, as factories tend to speed up their production before the holiday starts. In terms of air and sea freight transportation, space will be getting tight; trucking services will also be in a great demand.

It is important to plan ahead in order to keep your supply chain uninterrupted.

• Impact on sea freight

Most of the sea freight carriers have blank sailings not only during the Golden Week period but also before and after the holidays to adjust their services in accordance with the weak market demand.

Some carriers implement westbound blank sailings as early as week 39. In general, there are blank sailings in week 40 and 41; sailing schedule gradually resumes normal in week 43. It is suggested to place your booking as soon as possible to avoid additional cost and to secure space. Please be aware of the booking cut off time.

You are welcome to get in touch with your DACHSER representative for updates on particular routes and discuss your planning.

• Impact on air freight

During the holiday period, air freight operations in local branches will be either closed or operating with very limited manpower.

For air import, only pre-booked shipment will be handled, please arrange the arrival date as early as September 25 in order to have enough time for customs clearance.

For air export, air freight space will be very tight and shipping equipment will be in great demand during the pre-holiday period. Please confirm with your local DACHSER representative for a precise cut off time.

• DACHSER Branches in China

DACHSER branches in China will be closed from October 1 to 7, and resume work on October 8.

If you have urgent shipment or wish to discuss any questions, please feel free to contact us.