If you’re in the import / export industry, the word Brexit might send a shiver down your spine. And with good reason. If, and when, we leave the EU, the UK will no longer have the freedom to transport goods around Europe tax free. Already, the fear and uncertainty surrounding the turmoil is driving prices up at a frightening rate.
Global Freight, a division of the Global Group, has been providing specialist consolidated freight services for 4 years. The JT’s Ari Blum spoke with Moishe Feldman and Global Freight expert Avinash Savjani about the challenges the freight industry faces.
How did the idea for Global Freight come about?
MF: As with most businesses, Global Freight was the result of a problem we had. When shipping
merchandise, shipping lines expect you to pay a flat rate per container, no matter how full or empty it is. To avoid paying for dead space, we were forced to purchase substantial quantities, which we struggled to sell with enough shelf life. That meant having to slash our prices, hurting our profit margin. The money saving scheme of filling up containers with more merchandise was having the reverse effect.
Although there were freight companies that did offer consolidated cargo, they only worked with ambient (dry) goods. Our own research showed us that many people shared this problem, including our competitors. After much due diligence and logistics planning, Global Freight was born.
What is temperature-controlled freight?
MF: Different products require different storage temperatures, ranging from +2 to -25 degrees Celcius. Temperature Control allows for items to be shipped at temperatures that are right for them.
Do you offer ocean or air freight?
Both. For products required particularly urgently, such as Pharmaceutical items, we also offer a 16-18 hour door to door delivery from the USA to UK and vice versa.
How is consolidated shipping different to any other freight option?
MF: Rather than charging for a 20ft or 40ft container, our rates are based on the number of pallets shipped, for example there is a rate for 1-3 pallets, 3-5 and so on. This makes it more economically viable to ship smaller quantities.
What are current legislations and practises that professionals in the UK import-export industry need to be mindful of?
MF: Different markets mean different opportunities, but they also mean new challenges, as they come with a different set of rules, regulations and authorities.
AS: At the moment, the most important regulations are the customs regulations for trade from outside the EU.
In addition, there are various agencies that operate for specific industries, such as the Food Standard Agencies, that have their own regulations.
How do companies generally comply with them?
AS: Freight Forwarding brokers keep up to date with the latest changes in legislation. They then pass on their knowledge to their clients.
Every product imported from outside the EU has a commodity code which determines the duty payable. It’s up to us to identify that code and ensure that the correct code is used at all times.
What could go wrong on the way? What pitfalls do you need to avoid and how do you prepare for them?
MF: There are so many pieces of the puzzle which need to be put into place. However, one critical piece is to ensure that all paperwork and certificates where applicable are submitted in time and filled in accurately. Late and incorrect paperwork is a major cause for delay.
But even best laid plans go wrong sometimes. How does Global Freight deal with emergency situations that arise?
MF: we’ve built close relationships with senior officials in the Port Health Authority division and other regulating bodies, along with high ranking airline industry officials. This has allowed us to help others get out of very tricky situations. For example, a competitor of ours had his shipment held up in the port for several weeks while the HMRC had it x-rayed and evaluated. This was right before the pre-Pesach season! With tremendous Siyatta Dishmaya, we were able to explain the urgency to the relevant officials and have the process expedited. A procedure which can often take up to 90 days was completed in just over a week.
What legislation might change vis-a-vis the UK-EU relationship post Brexit?
AS: All products that are imported from other EU countries are exempt from taxes and duties. Post Brexit, the UK will have to pay taxes on trade with the EU as a non-EU country.
Logistically, what could change post Brexit?
AS: There are no legislation changes expected for non EU trade. However, I do expect trade between the UK and other countries to increase as we consider signing free trade agreements with countries like the US, Australia and Commonwealth countries.
MF: We’re already seeing changes! Many hauliers and transporters now avoid doing business with the UK. As a result, supply is limited. In addition, the uncertainty is affecting the sterling / US exchange rate. These factors cause prices to go up considerably.
How are companies like global able to prepare?
AS: All importers are already familiar with trading regulations. Each company has an Eori number, which is required for importing to and from the EU.
What importers do need to be prepared for is the inevitable hit to their cashflow, as they suddenly find themselves having to pay taxes for EU imports. Even if we sign an agreement with the EU exempting us from tax, VAT will still be applied.
Where do you see the company heading after Brexit?
MF: Hashem knows and does what’s best for us.
What positive outcomes are there, in light of all this uncertainty?
MF: I am inspired by the incredible achdus that this enterprise has generated throughout the industry. The fact that competitors can put their differences aside and help each other out is a true Kiddush Hashem.
I am also delighted that using consolidated shipping has made it easier for new and smaller players to enter the marketplace as they can ship smaller quantities, allowing them to grow their business naturally.
Any final words?
MF: We are excited to announce that in the coming weeks Global Freight will be moving to a new state-of-the-art depot in New Jersey, USA. This will be used as a central hub for all logistics. In addition, our own trucks are now licensed to collect and deliver merchandise in the JKF cargo terminal. This will iy’H speed up the process further.
AS: The world of freight and logistics is a daily challenge. But the end results give me the strength and satisfaction to continue. As the saying goes, ‘the reward for a job well done is the opportunity to do it again’.