Panorama

How the Dutch ports readied themselves for Brexit

By Bas van Amsterdam, Advisor, Corporate Communication, Portbase

In choosing the most cost-effective option to distribute goods, supply chain managers all over the world have four transport options to choose from: ocean-going vessel, plane, train, or truck. But for European distribution there is also another efficient option available, shortsea shipping[1] (SSS).

Most SSS vessels carry goods within the European Union’s (EU) internal market, in other words “Union goods” that have been manufactured in the EU or are in free circulation within the Union. These goods can be transferred within the EU without any Customs formalities[2].

Most of these vessels are built to carry containers, and their routes are connected to global deep sea trading links. As a result, containers arriving from Asia or the United States at one of the main European container ports might be loaded onto SSS vessels to be delivered to close by destinations and smaller ports.

Ferries are also big players in the industry. They transport goods in trailers, which unlike containers, come in various shapes and sizes, and the cargo can be both accompanied and unaccompanied.

Shortsea shipping has been quietly growing and developing, and several ports see this trade as a focus. These include ports in the Netherlands whose shortsea routes connect to all of Europe, especially the Baltic and Scandinavian countries, and the United Kingdom (UK).

Brexit

Given the level of trade exchange and logistics operations between the Netherlands and the UK, the decision of the latter to leave the EU was a topic of much discussion among the Dutch trade and logistics community. The negotiations on the type of trading relationship the UK will have with the EU are still ongoing, but, irrespective of the outcome, Brexit will create a new reality for logistics chains between the two countries: the UK will become a country outside the EU Customs Union, and every form of trading relationship will see the introduction of Customs formalities in shortsea and ferry traffic.

Ferry operators and shortsea terminals, as well as importers, exporters, and logistics service providers moving goods from or to the UK will be faced with obligations that they currently do not have, and are operating in a logistics chain that is not yet geared to this. The ferry sector will be impacted the hardest as it does not have any experience in handling Customs formalities, unlike SSS vessels, which are more acquainted with them as they also carry goods to Iceland and Norway, which are not Members of the EU.

In mid-2018, a group of Dutch-based businesses launched an initiative to look into this issue and provide a solution for the automated handling of Customs formalities for companies that wanted to continue or to start transporting cargo via Dutch ports after Brexit.

The initiative

The entities forming this group and who have been working hard for the last two years are Portbase (the non-profit organization that built the Dutch Port Community System, enabling the sharing of data between companies and information-exchange with governments), Deltalings (the port entrepreneurs’ organization), interest groups such as Fenex (the trade association for the forwarding sector) and Evofenedex (the trade association representing companies exporting, importing and transporting goods), Dutch Customs, the port authorities of Amsterdam and Rotterdam, ferry operators, and the shortsea terminals.

In the Dutch ports, the administrative handling of inbound and outbound deep sea container has already been fully – and successfully – automated for years, through the Port Community System that connects 4,700 entities involved in the logistics chain. The data provided by all the supply chain entities is shared and reused for various notifications and declarations. Reusing data leads to fewer errors, speeds up the logistics process, and reduces the liability and administrative burden of the various parties. Information from B2G processes is being used to facilitate B2B processes, and the other way around. That is what makes the Dutch ports smarter and more efficient.

The Port Community System is managed by Portbase, a subsidiary of the ports of Amsterdam (25%) and Rotterdam (75%), who is also in charge of the digital port infrastructure and core processes in all the Dutch ports. Being a non-profit organization, Portbase operates on a cost recovery-basis, and has a neutral position in the port community.

After some studies had been conducted, the entities participating in the group came to the conclusion that the Port Community System used to manage deep sea container transport could be redesigned to enable actors in the shortsea and ferry transport chain to also provide and share data via the system.

Cooperation with Customs

The cooperation with Dutch Customs played an important role in developing the solution. Dutch Customs is known as one of most modern Customs administrations in the world, particularly due to its efficient handling of processes: its motto being “Pushing boundaries: smart supervision with minimal disruption to the logistics chain.”

As a result, hinterland carriers that make use of the automated handling procedure via the Port Community System face minimal delays at the border. This efficient approach is of tremendous value to both the government and the business community, and strengthens the competitive position of the Dutch ports. Dutch Customs participated fully in the programme, providing the necessary insights and conducting an open dialogue in shaping the solution.

The approach

At the end of December 2018, the members of the group agreed on both the import and export process, and embraced one uniform method aimed at ensuring the smooth handling of Customs formalities, and a smooth cargo flow through the Dutch ports. Both for shortsea and ferry traffic, a single digital gateway – via Portbase – was to be created for all terminals. A lot of time was invested by all parties who discussed developments on an almost weekly basis.

In a relatively short time, they managed to accomplish a difficult task. The adjustments that were needed to convert the existing and successful working methods for deep sea container transport had already been completed prior to the first Brexit no-deal deadline on 29 March 2019. The solution creates a digital border for ferry and shortsea transport to and from the UK, whereby the handling of Customs formalities takes place in an automated fashion. Fortunately, the postponement of Brexit to 31 January 2020 – and the 11-month transition period that will follow – has allowed businesses even more time to prepare.

Current state of affairs

The next step was to advertise the solution that had been developed: an outreach campaign under the slogan “Get Ready for Brexit” was launched, and a website (www.getreadyforbrexit.eu) was also opened. At present, 80% of the volume that is transported between the UK and the Netherlands via Dutch ferry terminals has been registered with Portbase. This mainly concerns the larger, high-volume transporters and freight forwarders.

The Dutch ports now face the challenge of raising further awareness of the operational procedure, both at home and abroad, so that more parties will register with Portbase, particularly the smaller companies, both domestically and abroad, that are not known and, therefore, difficult to identify and reach. In the coming months, the Dutch ports and the Dutch government – in particular Dutch Customs – will have to chart the remaining 20% of the volume, and reach the companies that are responsible for this volume.

Conclusion

The Dutch ports are prepared and have done everything they can to ensure the swift flow of cargo by building modern digital and physical infrastructures. Indeed, the collaboration with Dutch Customs has enabled a solid and efficient way of working to be established in the Dutch ports. This story clearly illustrates that when private and public organizations join forces and work together, they can develop solutions that are satisfactory to all.

More information
www.getreadyforbrexit.eu

 

[1] Short sea shipping is the maritime transport of goods over relatively short distances, as opposed to the intercontinental cross-ocean deep sea shipping. In the context of the EU, it is defined as maritime transport of goods between ports in the EU (sometimes also including candidate countries and EFTA countries) on the one hand, and ports situated in geographical Europe, and on the Mediterranean and Black Seas, on the other hand.

[2] In some cases, the Customs status of Union goods must, however, be proved when imported goods have been transported through a region that is not part of the Customs territory of the EU.