Sunday May 01 , 2016
Font Size
   

Welcome to KWL Logistics

With well over 100 years of experience in Worldwide Freight Forwarding and Logistics, we offer our customers a solution to handle all of their Import, Export, Crosstrade and Logistical requirements under the one umbrella.

Whether you are moving a pallet of cargo from London to Hong Kong, a shipment of 20’ and 40’ containers from New York to Manchester, or you need us to project manage the movement of a machine from Birmingham to Australia, then we can help.

If you value your business then let our team of professionals look after you.

We are just a phone call or email away.


 

Industry News from BIFA

  • BIFA says trade regulation set to get even more stringent

    BIFA reminds its members constantly of the risks that they run when undertaking certain types of business and the need to comply with regulation.

    One area that is causing considerable concern is VAT fraud and the forthcoming Union Customs Code (UCC), which is being introduced across the European Union (EU) on May 1st 2016, includes legislation that can be used to tighten up certain regimes. 

    BIFA notes that in its latest annual report on the VAT Gap based on 2013 figures, the European Commission showed that the difference between VAT due and collected amounted to EUR168 billion.  In real terms this amounts to a VAT shortfall due to fraud and evasion, tax avoidance, bankruptcies and simple miscalculation. 

    BIFA Director General, Robert Keen says that in part the problem is that trade has moved on significantly, whilst regulators have reacted slowly to these changes. 

    “In particular, what we will refer to as Internet Trading and the Onward Supply Relief regime seem to particularly lend themselves to fraud.  Some overseas websites openly proclaim that they value all goods at a certain price to circumvent the “De Minimis” threshold.”

    Prior to Christmas 2015, Customs raided warehouses which it was believed contained goods supplied by overseas online traders that were being sold in the UK without VAT being paid or accounted for.  Goods worth many hundreds of thousands of pounds were seized during the raids. 

    Anecdotally, some BIFA members have become very suspicious of goods being imported under the Onward Supply Relief regime and concerned about their liability relative to VAT.  Others are becoming very sceptical about internet-based trade, particularly where the declarant is based overseas.   Some members have reported that the pattern of trade and vehicles supplied to move goods for exports from the UK to other EU Members States does not make sense to them.

    Large internet traders have been publically-scrutinised and questions have been asked in the House of Lords about the issue.  Demands have been made that Amazon become liable for the unpaid VAT of thousands of customers and Customs have been heavily criticised for failing to take adequate steps to stamp out non-compliance.  Part of the problem is that it is very difficult to identify who the buyer and seller are.  Where the goods are received on a (Delivery Duty Paid) DDP basis and local taxes are invoiced outside the EU there is no guarantee that the VAT will be added to the value of the goods.

    Recently BIFA has been contacted by members, which imported goods on behalf of a party outside the EU on a DDP basis.  All taxes including VAT were billed back to the origin and the monies never paid, leaving the forwarder out of pocket and goods in free circulation on which VAT had not been paid, undercutting legitimate traders by 20 percent.   Then the situation for the import forwarders deteriorated even further as HMRC has demanded payment in full for the unpaid VAT.  As there is no other representative in the EU or UK, the forwarder cannot claim the protection of being a Direct Representative, and at best they may be jointly and severally liable as an Indirect Representative, at worst they become Self Representing, with full liability for the Customs debt.

    Throughout the EU there is a move towards looking at whether third parties can be held liable for the VAT failings of their customers.  Freight forwarders and logistics providers, due to their role, are obvious targets as they facilitate trade across frontiers, provide warehousing and clear goods through customs.  Authorities increasingly consider that these providers have an obligation to be aware of the tax status of their customers.

    Keen adds: “BIFA always advises that forwarders should 'know their customer' and carry out reasonable checks on them. 

    The Union Customs Code includes three elements which may be used by customs authorities as part of their clampdown. The first is that all warehouse keepers under the UCC will be required to provide guarantees on the import duty payable.  The second UCC Article which re-enforces an existing requirement simply states that 'the declarant shall be based in the customs territory of the Union'.  This has very significant consequences for the unwary.   If there is no EU-based company to take responsibility for the import customs declaration the forwarder when clearing goods will have to carefully consider their liabilities because they will become fully responsible for the accuracy of the customs declaration and any debts.

    Thirdly, under the UCC many companies will have to seek re-authorisation for current simplifications and regimes.  All re-authorisations will need to be undertaken by the 30th April 2019, during this process there will much greater contact than normal between Customs and Trade and the former will as part of their role scrutinise processes and compliance.

    BIFA is now recommending that the following checks are carried out by forwarders on their customers:

    • Always carry out due diligence checks on new customers including obtaining, where appropriate, VAT and Deferment numbers. For UK limited companies, their Companies House number should be obtained.  All details should be verified using the appropriate website. It is essential to ensure that the declarant is an EU-based entity

    • Always challenge the use of multiple EORIs by single entities

    • Incorporate BIFA Standard Trading Conditions into any contract and it is highly recommended that the customers’ acceptance of the terms is confirmed in writing.

    • Pay particular attention where business to customer imports are non-EU based online retailers using a fulfilment house model and/or where Customs Procedure Code 42 has been used

    • Where possible ensure that all instructions are in writing

    Keen concludes: “Business has and is continuing to change and it is very clear that the opportunity for fraud is rapidly increasing.  Normal business relies heavily on trust that both parties are engaged in legitimate trade and that neither party is seeking to conduct business that will damage the others business. 

    “However, it is clear that a minority of businesses are established to make money through fraud and other illegal activities. 

    “Asking relevant questions will likely result in those engaged in fraud to look to less diligent partners with whom to conduct business.”

  • MCA confirm application process for becoming a verified weigher

    As highlighted by BIFA over approximately 2 years, from 1 July, under the amendment to the SOLAS regulations, the shipper of an export container is required to provide a verified gross mass to the Ships Master or their Terminal Representative before it can be loaded on board a vessel. 

    The ultimate sanction is that unless this weight has been provided the carrier is not legally allowed to load the container onto their vessel. However, it should be emphasised that by law the provision of this accurate weight is already required in the United Kingdom.

    The MCA have advised trade that all applications to become a ‘Verified Weigher’ must be submitted by e-mail to container.weight@mcga.gov.uk.

    This application should be submitted along with the supporting documents and procedures as detailed in the ‘Indicative application document for method 2 users’ checklist which is contained within the guidelines published at https://www.gov.uk/government/publications/verification-of-the-gross-mass-of-packed-containers-by-sea.

    The guidelines also provide a copy of the original, but surprisingly brief, SOLAS amendment and it’s supporting Annex. Whilst not mentioned within any of these links, BIFA urges any party considering applying to become a ‘Verified Weigher’ should also read MGN 534 which provides the guidance on the implementation of the SOLAS VI Regulation 2 amendment.

    Whilst resourcing implications to support applications are under discussion within the MCA, which will be in place shortly, something will be in place well before the entry into force date of 1 July 2016 to ensure that UK exports are not affected.

  • Type of container cargo no longer affects price in market defined by oversupply, discloses Xeneta

    Data gathered by the firm illustrates that the market average price for transporting a 40-foot container from Shanghai to Rotterdam, on a short-term contract, has slumped dramatically since mid-2014. As of 19 April 2016, the market average price stood at USD595 (a 78% drop compared to 1 July 2014) and at USD321 for the market low (an 82% drop over the same period). This, Xeneta CEO Patrik Berglund argues, has created a new market reality.

    “In today’s market there’s too many boxes chasing too few cargoes,” he states. “Traditionally cargo was rated by weight or measure, with the ratings based on the cargo type. Calling a carrier or NVOCC’s rate desks for ocean freights was a painful experience, with negotiations based on cargo descriptions, packing, and cube - all designed to bring maximum revenue to the carrier.

    “But now, as long as the box isn’t overweight - although even that isn’t always an issue these days - or filled with hazardous material, that’s all been pushed to the side. The carriers just want a full box, period. It’s also important to note how contracts can make a difference here. In the current market short-term contracts, or those hunting good spot rates, are getting better deals than those with long-term contracts. This wasn’t the case 18 months ago.”

    When looking for the cause for this shift, Berglund points to a simple factor – oversupply in a declining market.

    “Over the last 18 months slowdowns in the Chinese and EU economies have cut Chinese imports by 19% and exports by 13%,” Berglund notes. “When that’s married to the fact that 208 new ships were introduced to the market in 2015, boasting a capacity of 1.67 million TEUs, carriers have a major problem. Namely, a stunning 8.1% oversupply of TEU’s.

    “This is a very serious issue for them – one that demands action.”

    Xeneta’s CEO describes the situation as “the perfect storm” for the segment, and one that will continue to redefine the landscape.

    “The industry is in a state of flux,” he says. “Cosco and CSCL are looking to get their recent merger approved by EU and US regulators and, together with Evergreen, OOCL and CMA CGM, form a new east-west mega-alliance. Such a powerful grouping would challenge the market dominance of the Maersk and MSC 2M vessel-sharing agreement, and possibly drive the price war to new highs, or rather lows.

    “In this environment there’s rumours of rock bottom prices, with mentions of boxes booked for Qingdao – Rotterdam for as low as USD 100, or even lower. So, at present, ‘what’s in the box’ isn’t the question, it’s ‘can we have your business please’?”

    In conclusion, Berglund emphasizes that any firm looking to ship containerized cargo needs to be aware of the latest data and trends relating to pricing:

    “This market is incredibly dynamic,” he states. “By gaining an intimate insight of it firms will get the understanding they need to get the deals their cargo deserves. This is a time of change, but it’s also a time of opportunity – for clients and for the shipping alliances fighting for segment leadership.”

    Source: Xeneta

  • Union Customs Code - Implementation

    On 1 May 2016, the UCC is implemented throughout the EU, however, some of the changes, in probability, may not effect trade until 3 May 2016, due to the May Bank Holiday.

    BIFA has been publicising the implementation on their website since 2014, which can be viewed by clicking here

    The effect of the UCC, the single most important piece of customs legislation to be introduced since 1992, will have a fundamental impact on Customs Agents, their Clients and the Regulators. Whilst some changes will immediately impact the Freight Forwarding sector, such as the changes to simplified Inward Processing Relief (IPR) and Low Value Bulking of Imports (LVBI), some changes will be more subtle with their implementation taking up to 4 years, if not longer.

    In the period leading up to the implementation of the UCC, BIFA recommends that its Members carry out some basic checks.

    • Ensure that you have read the available material and understand which regimes are being impacted and what these changes entail for you.

    • Read the relevant Customs Information Papers (CIPS) and Customs Tariff for information on how to complete the relevant declarations changed under the UCC.

    • Consider the timing of entries as, if there are changes due to the UCC, it may be advisable to delay submitting Route H entries, for instance, that are likely to clear after the 1st May.

    HM Revenue & Customs communications with BIFA have made it clear that the Department’s ambition is to keep the impact on trade to a minimum and they are as prepared as they can be to see through the implementation of the legislation.