How should you prepare your business for Brexit by March 2019?

The question that we are often asked is “whether or not it is possible to do anything as we don’t know what the final agreement will look like?”

Unfortunately, this is untrue for the most part.

We do in fact know most of what will be required to trade, post-March 2019 and therefore the actions required between now and then.

  • We do know for instance that import and export declarations are inevitable, with the accompanying requirement to provide Customs with the necessary classification, origin and other trade information.
  • We do not know whether positive duty rates will apply, as we don’t know whether a new a Trade Agreement will be concluded. We do know however, that this is highly unlikely to be completed by March 2019.
  • Even with a Trade agreement, we do know that this will not benefit every company trading with the UK due to restrictions on country of origin and potential sectoral restrictions. In addition, a Trade Agreement in itself leads to additional customs authorisations and procedures that companies will need to put in place to avail of preferential rates.

Most companies with a Brexit plan have therefore already started work on preparing for the required new trading arrangements.

At this point a typical time frame would break down as follows:

As can be seen from the above timeline there is a significant amount of work that will be required.  The timetable does not allow for slippage, complications inevitably arising to cause delays, IT scheduling conflicts or other unforeseen issues.

Without a transition phase being agreed therefore, companies who have not started preparing could leave themselves at risk of incurring unnecessary costs and delays when trading with the UK.  As we hear Michel Barnier, EU's Chief Brexit negotiator,say on a regular basis, “the clock is ticking”.

* Trusted Trader Status is formally known as Authorised Economic Operator Status (AEO). This authorisation will be detailed in our next newsletter.

For more information about our partnership with BDO Ireland click here.

Vicki Caplin | | 0 comments

Deep Sea Freight Rates Continue to Ease

The extreme peak in export sea freight rates out of Europe to Asia experienced during the spring has eased back somewhat with Consultants, Drewry showing a rate for 40ft. container from Rotterdam to Shanghai at USD  1290. This is still double the rate of a year ago. The import rate, at USD 1751 has continued to fall and is now 8% more than the rate this time last year. However, actual rates are now likely to increase as traffic volumes heading towards the Christmas peak season. Rates for shipment of 40ft containers out of Rotterdam to New York remain soft, USD 1721 being a 5% drop on the rate a year ago. Import rates from New York remain very low with a figure of USD 527 for a 40ft container, a 15% increase on the rate a year ago.

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Perennial Freight Opens Direct Trailer Service to Iberia

Wexford based IEA Member company Perennial Freight has opened the first weekly direct trailer service linking Ireland and Iberia. The trailers are shipped ex Rosslare on Saturday and are discharged at the Port of Santander on Monday morning. Cargo is delivered to main destinations including Barcelona and Madrid on Tuesday with that for further destinations including Valencia being delivered on the following day. The Perennial equipment fleet includes Curtainsiders, Euroliners, Flatbeds and Containers.

Contact at Perennial is: Christiane O’Connor, [email protected]

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Welsh Assembly Committee Report Highlights Port Competitiveness Issues in Brexit Situation.

The External Affairs Committee of the Welsh Assembly has completed and issued a significant report that has a focus on the implications for Welsh Ports and related land infrastructure of the potential diversion of traffic moving between Ireland and Britain as well as that traffic currently “landbridging” through Wales to and from continental Europe. The report reflects very much the views expressed to the Committee when they visited Dublin and met with IEA, the Irish Maritime Development Office (IMDO) and Departmental representatives.

Among the concerns voiced in the report was that; “a soft border between Northern Ireland and the Republic, and a hard-maritime border between Wales and the Republic of Ireland, could severely disadvantage Welsh ports and result in a loss of competitiveness leading to a displacement form Welsh Ports – principally Holyhead- to ports in England and Scotland, via Northern Ireland.”  This concern was greater than that about the possible outcomes of moves to develop further routes and frequencies running direct from Ireland to continental Europe.

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Boom in European Rail Freight Leads to Congestion on the Tracks

While in spring 2017 exporters shipping product in containers to Deepsea markets experienced serious delays and cost escalations while the shipping lines and terminals sought to cope with handling significantly larger vessels and changes in schedule arising from the establishment of new vessel sharing alliances, the focus is now shifting to problems with freight by rail in Europe.

The continental rail system is being put under increasing pressure. Ports including Rotterdam and Antwerp are seeking to relieve congestion at the quayside by establishing inland terminals and shifting significant container volumes by rail to these, with the cargo going onward by rail to final destination. Road congestion and increasing pressure for shipment by low-carbon systems are also significant factors. The European Rail Freight Association (ERFA) has expressed concerns that rail freight terminal development designed to meet the increased traffic volumes is, in fact, adding to the congestion and is pushing freight traffic back onto the roads.

Over the last five years or so a number of Shippers and Forwarders involved in the movement of higher value goods between Asia and Europe have introduced rail freight services linking a number of Chinese locations with main centres in Europe, particularly, the port of Duisburg. At the end of May 2017, the Journal of Commerce calculated that there were 53 weekly trains into Europe and 23 headed back to Asia. Last year 40,000 containers moved by rail between Asia and Europe and DB Schenker estimates that this figure will grow to over 100,000 by 2020. Other sources put the 2020 figure at over half a million forty-foot boxes on the rails.

The major driver for the growth of this mode of container freight is the time/cost equation involved.  A 40ft container door to door cost from China to a European destination would cost in the order of USD 3,000 using ocean freight and the transit would take at least 33 days, the same shipment by rail would cost about USD 8,000 and would arrive in between 12 and 25 days. The same cargo movement by air would cost about USD 37,000 and would take about 7 days.

However, the congestion now occurring at European rail terminals as well as at some of the rail gauge interfaces further east, is worrying carriers as, already, these delays are accumulating to five to six days.

Clearly, it is impractical to operate rail freight trains linking China directly with Ireland but a number of operators are now using the system with Ireland bound containers being shipped through terminals such as Duisburg.

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Dublin Port Reports Significant Trade Growth in First Half 2017

Speaking at the publication of the first half 2017 traffic throughput at Dublin Port the Port’s CEO Eamonn O’Reilly said; ““The phenomenal growth we have seen in recent years is continuing, with 2017 set to be the third successive record year for Dublin Port. The 2.9% increase in trade in the first half of 2017 brings our growth in just five years to 29%. At this rate, Dublin Port’s volumes would double in just 14 years.

“Work is well underway on Masterplan projects to provide capacity for future growth. These include the Alexandra Basin Redevelopment (ABR) Project and the development of Dublin Inland Port on a 44-hectare site situated 14 km from the Port.

“We are also starting preliminary work on Dublin Port’s second major Masterplan project, the MP2 Project, with a target of applying for planning permission in late 2018. Planning permission and other consents will take about two years, allowing construction to commence as we approach the end of works under the ABR Project. The MP2 Project will provide much needed additional capacity for Ro-Ro freight and container traffic to the UK and, increasingly, to Continental Europe.

“The major development projects in Dublin Port are being guided by Dublin Port’s Masterplan which we are currently reviewing. At this stage, the review is pointing towards a third and final major Masterplan Project (following on from the ABR Project and the MP2 Project) on the Poolbeg Peninsula. This will bring Dublin Port towards its ultimate capacity and able to accommodate projected future growth all the way to 2040.”

Dublin Port company is an active participant in the IEA Multimodal Freight Group.

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Getting It Right With Exports – Business Achievers, powered by Ulster Bank

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FAQ for 2017 Export Industry Awards – Applications

What are the Export Industry Awards?


The Irish Exporters Association’s Export Industry Awards in its 17th year is the premier event for recognising the achievements of Irish Exporters. It is important that we highlight the exporting companies who have excelled in their sector despite some difficult trading conditions and to highlight exporters who have been fundamental to Ireland’s success.

The 2017 event is supported by a number of corporate and industry sponsors: Bank of Ireland, Etihad Airways, KPMG and UCD Michael Smurfit Graduate Business School, Bord Bia, Enterprise Ireland, GS1 Ireland and the Irish Maritime Development Office along with our Media partner The Sunday Times, with more to be confirmed.

 

How and when can I apply for the Awards?

The closing date for applications is Thursday, 31st August 2017. There is no application fee, a straightforward application process and companies are welcome to enter more than one category with 11 categories covering the emerging exporters to established indigenous exporters of manufactured goods, services, software and onward to the multinational companies.

In 2017 we are introducing a user friendly online application system. Applicants can start, save, exit and return to edit and submit their online application forms. If you encounter any issues, please contact Jennifer Condon, Events Manager at [email protected] or 01 642 4178 for assist.

 

What are the benefits of entering the Awards and attending the Gala Dinner & Awards Ceremony?

Entry would provide your company with an opportunity to be recognised on both a regional as well as national level, provide positive PR and increase brand awareness leading to access to new customers. Attendance at the gala event would provide your company with plenty of opportunities to network with some of Ireland’s biggest and best companies and is also a great staff night out!

To learn more watch the video below:

Vicki Caplin | | 0 comments

Measuring Brexit Costs

As of 2016, the value of traded goods and services each week between Ireland and the UK is €1.2 billion. Meanwhile over a year since the UK referendum we still don’t have any real clarity on what the final agreement between the EU and the UK might look like. Given such uncertainty, what can businesses do to identify some of the trade-related implications as a result of Brexit under different scenarios?

Many of these scenarios point to the probability of the UK leaving the customs union, and businesses involved in Ireland-UK trade are now assessing the detail of what the financial impact could be. Unless there is a tariff-free EU/UK trade agreement, Irish goods will be subject to tariffs and the EU’s external border will run through Ireland, with a customs regime between the two jurisdictions. For Irish exporters with imported inputs in their products there are significant implications.

Businesses should consider identifying their impacted supply chains now and quantify the financial consequences of potential additional customs duties, VAT and trade compliance costs. Software such as that developed by KPMG can help businesses deconstruct their supply chains and identify where the costs, bottlenecks and opportunities may lie.

Interrogating your data from different angles is critical. Using VAT and Customs filing data, the software can produce a bespoke report quantifying the key customs duty and VAT impacts arising from Brexit. The tool maps the flows of goods into and out of the UK, giving visibility over the elements of the supply chain that are most exposed to additional cost or supply chain risk as a result of Brexit.

Businesses can then work to identify specific solutions to the issues raised, which could involve alternative supplier sourcing, revision of trade terms or changes to the logistics process. Regardless of possible eventual Brexit outcomes for Ireland, businesses who understand their supply chains now and use innovative technology to quantify product, customer or supply chain exposures will be amongst those best placed for the post-Brexit world – whatever that brings.

Marie Armstrong is a Tax Partner with KPMG in Dublin.

For more details on planning for Brexit and KPMG's indirect tax impact assessment tool, download the pdf by clicking here.
KPMG Ireland is a Platinum sponsor of the Export Industry Awards.

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Ireland’s Maritime Sector is Key Driver of Economic Growth

As a maritime nation and as an economy, we are heavily dependent on seaborne transport, which facilitates international trade and is an indispensable part of a supply chain that links Irish industry to world markets. Our ports and maritime services also support Ireland’s tourism industry by providing ferry services to and from ports in the UK and Continental Europe. In meeting the needs of trade and tourism, the maritime industry has shown itself to be flexible and resilient and has demonstrated the ability to respond appropriately to growth and contraction in the Irish economy.

A recent report by the Socio-Economic Marine Research Unit (SEMRU) of NUI Galway shows that Ireland’s marine economy is outperforming Ireland's general economy, with the shipping and maritime services sector, comprising Irish sea-based transport operations for freight and passenger transport, as well as associated services, playing a key role in driving growth.

In 2016, Ireland’s marine economy had a turnover of €5.7 billion, 37% of which is attributable to the shipping and maritime services sector. The direct economic value of Ireland’s marine economy was €1.8 billion in 2016, or approximately 0.9% of gross domestic product (GDP), which represents an increase of 20% on 2014.

This positive trend is also reflected in a report released earlier this year by the Irish Maritime Development Office (IMDO), the Irish Maritime Transport Economist, which records a 2% increase in total port traffic in 2016, reaching the highest level of throughput achieved since 2007. Statistics for 2017 show continued growth, with shipping and port activity in the Republic of Ireland rising by 7% in the first quarter of 2017 when compared to the corresponding period of 2016. It is clear that our maritime sector can respond to the needs of our growing economy, and indeed has a vital role to play in supporting the development of our national economy for decades to come.

We are delighted to be involved with the Export Industry Awards as sponsor of the Maritime Services Company of the Year category again this year, and we strongly encourage those involved in the maritime industry to put themselves forward to receive recognition for the significant role that they play in the growth and development of the export industry in Ireland, which contributes directly to the wider growth of Ireland’s economy.

Liam Lacey, Director, Irish Maritime Development Office

The Export Industry Awards recognise the remarkable achievements of companies working in the export industry.

For more information and to apply visit bit.ly/2q1JN2Y. There is no application fee and companies are welcome to enter more than one category.

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