Global Trade
EU TAKES LEGAL ACTION AGAINST UK FOR BREACH OF WITHDRAWAL AGREEMENT
The President of the European Commission, Ursula von der Leyen, has announced the launch of legal action against the UK government. The European Commission has stated that the UK’s Internal Market Bill would violate the Northern Ireland Protocol if implemented. As the UK has failed to remove problematic aspects of the bill by the end of September, the European Commission has sent a letter of formal notice. This is the first step in an infringement procedure, according to President von der Leyen. The UK has until the end of October to respond to the formal notice. You can read more details on this news item at RTE.
SEA AND FREIGHT VOLUMES DECLINED 11.6 PERCENT IN Q1
In the first half of this year, air and sea freight forwarding volumes contracted by 11.6 percent year-on-year due to the coronavirus pandemic. Furthermore, reduced factory output in China and decreased demand due to lockdowns weakened global trade. According to supply chain consultancy Transport Intelligence (Ti), the air freight sector suffered a 15.3 percent contraction during the first six months of 2020. The sea freight sector maintained a stronger position with a 7.6 percent decline in the same period and a predicted full year contraction of 6.4 percent. You can read more about this news story, at The Loadstar.
THOUSANDS OF UK BUSINESSES MAY NEED TO SET UP AN EU OFFICE
Trade consultants Blick Rothenberg have stated that thousands of UK companies may need to establish an EU presence in order to export goods to European markets. EU and UK law requires firms to “have a door to knock on” to resolve disagreements over payments and compliance with customs changes. Many EU importers of UK goods do not want the added risk and cost of being responsible for compliance with customs procedures. These companies want the UK exporters to bear this responsibility instead. One alternative is to pay an official distributor or a customs and freight forwarding agent in the EU to be responsible for new paperwork and payment obligations. For more information, please see BBC.
Retail
H&M TO SHUT HUNDREDS OF STORES AMID ONLINE SHIFT
On Thursday, H&M, the world's second largest fashion retailer, announced plans to close hundreds of stores next year. This move comes as a result of consumers shifting to online shopping due to the coronavirus. H&M has approximately 5,000 stores worldwide. The retailer intends to reduce this number by a net 250 in 2021 — around 5 percent of its current network. This announcement comes as H&M reported a smaller than expected decline in third-quarter profit. For more information, please see Reuters.
Carriers
DHL LAUNCHES LONDON’S FIRST RIVERBOAT PARCEL DELIVERY SERVICE
DHL Express has launched the UK’s first high speed riverboat parcel delivery service on the River Thames in London. The service aims to reduce congestion on London roads while efficiently transporting packages across the capital. Wandsworth Riverside Quarter Pier will be the loading point. After this, packages will travel along the Thames into central London. DHL courier bicycles will make the final mile delivery. This service is the latest addition to DHL’s environmental protection program, GoGreen. This program aims to reduce and avoid emissions of greenhouse gases and local air pollutants. For more details on this story, please see Post & Parcel.
FEDEX STRENGTHENS HOME DELIVERY SERVICES
FedEx is attempting to get a firmer grip on the increasing volume of bulky items. These include goods such as exercise equipment and home improvement products, that consumers are purchasing online for home delivery. Through its FedEx Direct Service, the carrier has expanded final mile deliveries of bulky goods from 80 percent of the US market to 90 percent. To facilitate this growth, FedEx will build five large packaging facilities and expand three. Between 1 June and 31 August, FedEx delivered over 750,000 bulky shipments. For more information on this news story, please see The Loadstar.
CMA CGM HIT BY CYBER-ATTACK
French container shipping line CMA CGM has confirmed that it was the victim of a cyber-attack. The attack impacted its peripheral servers, causing its website and some subsidiaries to go down. The company stated that once it discovered the security breach, it interrupted external access to applications to stop the malware from spreading. It is rumored that the company has been subject to a DDoS (distributed denial of service) attack. For in-depth coverage, please see The Loadstar.
Precision News
IMPORT MANAGEMENT: THE IMPORTANCE OF CORRECT CLASSIFICATION
Classifying goods using the correct commodity code is the first, and arguably, most important step in import management. These codes tell customs officials what is being imported, if the goods are admissible, and what taxes, if any, are due. Any importer who gets the classification wrong is violating import laws. As a result, the importer is vulnerable to delayed cycle times, confiscated shipments, and fines.
As goods cross the world, they travel with a six-digit code, known as a subheading. These six-digits are an almost universally recognized tariff nomenclature system. This is known as the Harmonized Commodity Description and Coding System — or Harmonized System (HS).
Almost every trading nation uses and recognizes the HS. Therefore, customs authorities around the world share a common language to track the inbound and outbound flow of goods. When used correctly, the six-digit HS code of a particular item will be the same in all WCO member countries. The correct classification of incoming goods is a legal responsibility. In this QAD Precision Report, we look at the importance of classification compliance. You can read the full report here.
