Early Brexit chaos just “tip of the iceberg” says cross-border trade specialist

Problems in the first few days since Brexit are the “tip of the iceberg”, according to cross-border eCommerce trade expert Hurricane Commerce.

Hurricane says that the issues caused by lack of complete and valid customs data and VAT now being payable on low value goods into the UK will cause severe challenges over the coming days and weeks.

Last week, DPD temporarily suspended parcel deliveries to the EU due to lack of data, stating that 20% of items had incorrect or incomplete information.

Several UK online retailers, including luxury food merchant Fortnum & Mason, have temporarily stopped taking orders from EU countries due to the extra customs paperwork now needed.

And some EU retailers have ceased taking UK orders following the January 1 change making overseas suppliers who send parcels containing goods valued at £135 or less to the UK responsible for paying any import VAT that is due.

Customer satisfaction has also been put under increased strain with consumers in the EU complaining about unexpected VAT charges and clearance fees, and UK consumers being asked to pay higher delivery charges to cover the extra work caused by Brexit.

Another major hurdle resulting from the Brexit trade deal concerns ‘rules of origin’ with the threat of tariffs due if goods do not meet the complex requirements or are not wholly made in either the UK or EU.

Martin Palmer, Hurricane’s Chief Content and Compliance Officer, said: “Online merchants and marketplaces, postal operators and carriers are starting to see the reality of Brexit and the ending of VAT exemption on low value goods by the UK Government.

“With the EU also removing the low value VAT threshold in July, the compliance pressures on all parts of the cross-border supply chain are set to intensify even further with similar issues to be experienced in all EU countries to those current being experienced in the UK

“The first week and a half since Brexit is just the tip of the iceberg.”

Martin added: “We predicted for the last six months of 2020 that many businesses were going to face serious challenges post January 1, while others did their planning and put the best possible systems in place.

“There is simply no escape from the need for complete and valid customs clearance data including product descriptions, HS6 codes, shipper and consignee details and country of origin.

“Retailers which offer Delivered Duty Paid (DDP) give themselves the best chance of keeping their customers happy by avoiding the doorstep shock of unexpected fees for customs duties and import taxes.”

Hurricane Commerce has developed a series of API solutions to help ensure seamless cross-border eCommerce trade covering data enhancement, duty and tax calculation, prohibited and restricted goods screening and denied parties screening.

Its customers include some of the world’s leading postal operators, carriers, online merchant and marketplaces.


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Q Radio – Brexit trade problems ‘just the tip of the iceberg’, e-commerce expert warns

An Post partners with Hurricane Commerce to enhance eCommerce parcel data quality

An Post is working with Hurricane Commerce to help it develop its cross-border eCommerce capability.

The postal operator in the Republic of Ireland has integrated Hurricane’s Zephyr solution to enhance the quality of its advance electronic data on mail parcels.

The requirement for posts to meet a higher threshold for parcel data will be far greater from January 1, 2021, with Brexit and the enforcement of the STOP Act in the United States.

A further major change follows in March next year with the implementation of the Import Control System 2 (ICS2) requiring postal operators to make entry summary declarations on all packets and parcels.

Earlier this year, Hurricane Commerce launched its easy to integrate Zephyr data enhancement product which allows bulk clearance facilities to check the accuracy of data including product descriptions and HS6 codes, and receive additional pertinent or missing information all under a single quick check function.

Zephyr can process over 700 million requests a day and can, on an item by item API call base, provide for a real time feedback with response times of 100 milliseconds. The screening of a file consisting of a maximum of 10,000 items that is sent to Hurricane takes no more than 15 minutes.

David Spottiswood, one of the founders of Hurricane Commerce, said: “We are delighted to be helping An Post meet the mandatory requirements for data on mail parcels.

“An Post is an innovative, forward-looking post that is putting itself in the strongest possible position to not only be compliant but also to take advantage of the exponential growth in cross-border eCommerce.

“The swathe of regulations coming into effect from the start of 2021 will result in parcels being held up and, in many cases, rejected unless they contain the required customs clearance data. Having the necessary complete and valid electronic data will ensure that mail items flow smoothly through customs and on to their intended customer.”

Cyril Mc Grane, An Post’s Director of International Trade, said: “We are investing heavily in our cross-border eCommerce capability and Hurricane will play an important part in this.

“The continuing enhancement of the data quality on parcels will ensure we meet the regulatory requirements and provide benefits operationally, financially and, most importantly of all, in terms of customer satisfaction.”


Hurricane in the media:

Jayne headshot

Q&A with Jayne James, Business Development Director

In the latest of our Q&A sessions with key members of the Hurricane Commerce team we catch up with Business Development Director Jayne James.


Tell us about your early career and how you moved into the world of international eCommerce?

I started my sales career in directory advertising which meant being away from home on specific campaigns throughout the year particularly close to print deadlines.

Targets were tough and the hours more so but sales training was excellent, the best anyone could have at that time.

In those days, we had no mobiles, laptops or sat nav which meant we had to rely on A–Z maps and directions from customers to find them.

Following the birth of my son in 1994 I realised this would not work and 5 months later I joined DHL Express and, subsequently, Deutsche Post, working in various roles in international express, parcels, and mail.


You briefly switched from international eCommerce and shipping to owning your own events and marketing start-up. What prompted this move?

I always like a challenge. My partner designed a boutique spa hotel in Andalucía and it was my job to market it globally and try and fill it 300 days a year.

I started by inviting some of the best online holiday agents to visit and following their recommendations we started to attract the right customers who came back regularly each year.

The books were full, so what did I do next? The strategy was to sell the property and move back to the UK. Thankfully the 3-year plan was a success and I was able to move on to the next chapter of my career.


How did you come to be so involved in the Chinese eCommerce and logistics markets?

During the eCommerce boom Chinese businesses became incredibly savvy and found that they had the infrastructure to handle the shipping process themselves, but just needed local knowledge on customs process and final mile deliveries.

china ecommerce

My role was to be that contact who could supply them with the customs processes for Europe and aid in the final mile delivery process. This allowed me to build good relationships and have a great career helping Chinese businesses successfully trade cross-border.

Working with Chinese businesses is incredibly rewarding. If they know how they need to improve their service, particularly improving transit times and reducing costs, then they are very hardworking and focussed to accomplish their goals. This makes collaboration with them straightforward as they are always quick to adopt any solution to enable them to improve the end-to-end process.


What is it about the Asian and, more specifically, the Chinese market that makes them so unique and such a big opportunity?

China has a sophisticated IT infrastructure which allows businesses to generate high sales and volumes, with a focus on short transit times. Because of this, a package from China to the UK is capable of only taking 4-5 days door-to-door nowadays.

This is incredible considering all the touch points of the supply chain, from receipt of order to airfreight, customs and handover to the final mile delivery in the destination country.

This does require businesses to provide accurate data with any packages, otherwise they can get caught in customs until the information is provided. This can drastically impact transit times and the overall customer experience.

However, having accurate data brings its own challenges as the different regional languages and dialects make it difficult to always have correct translations of descriptions and codes available.


What drew you to Hurricane?

Quite simply, the people and the technology.

I have worked with both Martyn Noble (CEO and Chairman) and Ash Dexter (CFO) since the mid-1990s and I trust and respect them and the rest of the Hurricane team.

Alongside this, the data enhancement and compliance products Hurricane has created are perfect to meet the challenges and opportunities presented by the continuing huge growth in cross-border eCommerce trade.


How has Coronavirus changed the focus of businesses?

eCommerce has grown exponentially for many businesses in the logistics and delivery sector. This has meant that postal operators, couriers and logistics providers have had to evaluate their delivery services and adapt to meet the expectations of the customer.

Food, homeware, furniture as well as fashion and footwear can now be delivered to your door, and, although it has allowed physical stores to remain open in another form, it has meant there are more online returns to deal with, adding further cost for the delivery companies.

As a sales person, not travelling to meet customers is the main drawback. Face-to-face meetings have a different perspective and allow you to better connect with someone. Having said this, the Hurricane team has adapted quickly to ensure its sales and marketing processes are as strong as ever.