Hints & Tips Blog

Do you Import? – answering your key questions on changing terms within Europe and beyond

As a business improvement consultant working primarily with manufacturing, retail and logistic businesses, you could say I have very much a ‘real world’ view when it comes to the import of goods, which is why I wanted to share the questions that commonly drop into my inbox.

With the changes in legislation, what do I need to include in my total cost calculations?

There are a few pertinent details to include as ‘good practice’:

  • Purchase cost based on a standard order size at a stated rate of exchange, if not in GBP.
  • Quality inspection costs before shipping
  • An allowance for currency fluctuations
  • Logistics and packaging costs, including final delivery to your agreed destination
  • Be clear on what Commodity Coding is applicable and any additional work/activity you undertake will not negatively influence your costs.
  • Total customs, tariffs, and duties known. Don’t be afraid to seek advice from a specialist on whether you should include an element of change.
  • Protect your trademarks and ensure you have the relevant insurance in place

Should I revisit my supply agreements? What must they include?

Overall, try work as a fair partner with your suppliers as there will always be times when you’ll need their help with challenges. You should however, review the effectiveness of all agreements, and always cover:

  • Technical specifications that include clear performance guidelines are a must, you should include a volume-based statement.
  • Your right to refuse changes to your agreement without a sensible amount of notice. Be clear on what cannot be changed, such as technical specifications, country of origin and lead times.
  • Think about non-substitution statements and non-subcontract cover, as well as your needs producing enforceable country of origin or suitability statements.
  • State your required standards regarding the environment, worker care and adherence to international law.
  • Detail of the packaging, labelling, palletisation and protection of the goods (drop-test). Include full detail on how the goods are verified.
  • Consider your items and how you’ll approach remedying non-compliance. An item that is unique, or will halt your process, has more relevance than something with multiple supply sources.
  • State the basis of shipment, your required and enforceable Inco terms (including year of origin, or state this will be advised by your shipping agent)
  • For payments be clear on currency, method and what’s included.
  • Your right to cancel orders and associated responsibilities.

What specialist services should I consider?

As a minimum, a freight forwarder who ideally holds Authorised Economic Operator (AEO) accreditation to assist in faster clearance, along with a customs or taxation specialist to ensure that your process is both compliant and fully optimised.

Depending on your product type, think about a specialist function that could verify product compliance, and produce documentation that legally covers your requirements. I would also suggest the use of an experienced consultant to help map the process and deliver an optimised approach.

A question I pose, is do you need to import at all?

It’s generally recognised that supply chain changes in the next few months are inevitable, along with increased costs. A review of what’s available nationally, or closer to home, should be a high priority. Overall total cost calculation should include possible increases to inventory, and reduction in cash flow.  If you do need to import, then look carefully at the point of UK entry – increased border control will continue to extend unload times, and  freeports and feeder vessels from European ports will become more prominent. It can be a complicated model for many businesses, but can be an essential part of a supply chain strategy.

So, how can I help you further?

Whether you’re already importing, or trying something new, it’s a complex subject best addressed on an individual basis. It’s often seen as a way to reduce costs or increase revenue, but there are defined requirements on product suitability, taxation and duties and your brand protection. The logistical considerations are numerous, and linked to documentation and serviceability. BHP have specialists who can and do support all needs on both a practitioner and improvement basis.

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And unlock your business’ potential. We formed the BHP consultancy team when we recognised, as high profile business leaders ourselves, that there were key pieces of advice and support we wish was offered to us when we were growing our business – and so the BHP Consultancy offering was born. It exists to energise SMEs in the North of England to take the next step in their journey. Click here to book a free meeting.

Free webinar – 16 December

BHP are hosting a free webinar to discuss the key points to consider ahead of the end of the transition period. Click here for more information.