Your Brexit questions, answered
We answer your most common questions about Brexit, how it could affect your business and how we can support you.
No Deal Brexit
The UK is scheduled to leave the EU on 31 October 2019.* However, until a Withdrawal Agreement is passed by UK parliament, the legal default position for the UK remains to exit the EU without a deal. It is therefore essential that businesses prepare for all possible outcomes, including a possible No Deal Brexit.
The UK Government has advised as part of the No Deal planning notices that if a formal withdrawal treaty has not been signed by the leave date, the UK’s membership of the EU Single Market and the EU Customs Union will cease. Details on what to expect and how to prepare in the event of a No Deal can be found here (UK Government technical papers on preparing for a No Deal Brexit) or here (European Commission preparedness notices).
*Correct at time of publishing.
The UK & EU Authorities have advised in their planning notices that, in the result of a No Deal, UK trade with the EU will be on WTO (World Trade Organisation) terms. Free circulation of goods between the UK and EU would end, so businesses would have to apply the same customs and excise rules as to countries outside the EU.
Details on this can be found in the planning notices from the UK Government here and the EU here, which state that businesses would need to provide import or export declarations, revise their International Terms and Conditions of Service to reflect that they are an importer or exporter, and provide an import or export licence for controlled goods.
Customs checks may be carried out and VAT import duty and any other duties would be payable. FedEx, as carrier of the goods, would have to make entry or exit safety and security declarations.
Whilst the current exit date and time for the UK leaving the EU is 31 October 2019, the exact details on how the changeover period for goods that are in transit to/from the UK has not been confirmed by either the UK or EU authorities.
Therefore our working assumptions for customers are as follows:
In principle, shipments created and sent on 31 October will be in free circulation when they start their journey so will be treated as such when they reach their end delivery point.
However, we know that both Express and Economy shipments from 31 October will arrive in the UK/destination EU country after 31 October, therefore we are actively seeking clarity on how they will be treated so we can be prepared and inform our customers. This is not just specific to ourselves or our industry but applies to many other goods that are moved and will be in transit to/from the UK on 31 October.
What this does therefore mean is that the last day for next day express or priority shipping that will not be in transit on 31 October would be 30 October. This would remove any possibility of customs clearance challenges based on the fact that the rules have yet to be confirmed by either the UK or the EU.
For Economy it will at least be the day earlier so 29 October, but we recommend all customers check their current transit times to/from the UK to understand the potential last day where shipments are unlikely to see any clearance issues, as they will have reached the UK/EU destination country by the 31 October.
If there is a No Deal then, based on the 31 October date, shipments sent from Friday 1 November between the UK & EU will require customs clearance and the appropriate paperwork, data and processes.
There are things that your business can be doing now to help you prepare for Brexit. Please review our online Brexit checklist which gives more detail but as a starter you should:
1. Define how your Brexit plan will affect your supply chain and discuss this with your FedEx Account Manager. It’s important that we understand your plans so we can determine how best to support you.
2. Ensure you have an EORI number. If the UK leaves the EU with no agreement in place, traders will need an EORI number to import or export from the UK to the EU.
EORI numbers are given to importers and exporters by EU country authorities for free. In the future, to trade between the EU and UK, the shipper and receiver will each need to be registered for an EORI in their respective country.
UK EORI numbers will not be recognised in the EU. EU EORI numbers will not be accepted in the UK. We recommend that customers register for an EORI in their country as soon as possible. It only takes 10 minutes to apply and applications can be made through your country’s government website.
3. Ensure accurate classification of your Goods, Description, Value & Origin. This information will be vital for the Commercial Invoice.
4. Agree Incoterms with your customers and make these clear on your Commercial Invoice.
5. Understand how to prepare & provide Commercial Invoices. See here for FedEx.
If you are a FedEx customer we recommend that you register for ETD (Electronic Trade Documents) so you can submit commercial invoices electronically at the point of preparing shipments. This will aid in avoiding customs delays, speed up delivery and reduce paperwork.
6. Check your products for any additional certificates, licences, quotas etc.
7. Align with your importers on what No Deal means to them and whether they are prepared.
If you are a regular importer or if you need to provide some advice to your customers then we would also recommend the following:
• Have you confirmed your clearance method, are we doing the clearance, do you use a broker or are you clearing goods yourself?
• If we are doing the clearance then have you provided the required authorisation and instructions?
• Have you considered a deferment account to cater for VAT & Duty payments?
In a No Deal scenario the current rules for imports from non-EU countries will also apply to imports from the EU with some additional changes.
To ensure that we will continue to provide customers with the best possible service after Brexit, FedEx has set up a cross-functional working group to monitor developments, assess any agreements and to enable us to adapt to any changes in a timely manner.
Whilst no one can predict with certainty what will change, we have planned for all eventualities and will continue to conduct impact assessments across all areas of our business to ensure we can give our customers the very best service no matter where they are shipping from or to.
Businesses are finding Brexit scenario planning a difficult exercise as so much remains unknown. We believe that it is important that we work with our customers to understand the impact on their business, especially in terms of changes to shipping volumes or flows.
Our recommendations for the steps businesses can take now can be split into 4 main areas:
1. Preparation before shipping
• If not already done so register and obtain an EORI number in the UK and EU countries you trade with
• Ensure you understand the requirements for classifying your goods by visiting the Government site
• Ensure you understand the requirements for a commercial invoice with FedEx guide
• Discuss and agree the Incoterms with your customers. Find out more on the FedEx website
2. Understand what is required at the point of Shipping & Exporting
• See our guide on how to ship across borders
3. Ensure a smooth import process
• Agree and define your importing preferences and operating model (self-clear or 3rd party)
• Ensure local clearance instructions have been shared with your provider
• Please see our webpage for more details
4. Consider receivers
• Understand the implications of Customs Duty on the goods received
• Understand the implications of Incoterms
• Understand the VAT required on the goods and the UK government’s proposal for postponed accounting for VAT
• Understand the charges and mechanisms for paying the duty & VAT
• Set up required authorisations for international trade
Our FedEx Global Trade Manager offers a comprehensive resource for simplifying international shipping for customers of all sizes and levels of experience. As a web based service it is available 24 hours a day to help you complete your international paperwork requirements. With the free Find International Documents tool, you can locate and print import and export documentation for more than 220 countries. This tool will help facilitate the customs clearance process. The Estimate Duties and Taxes tool lets you enter shipment-specific information and calculate the estimated duties, taxes and other fees that may be levied against your international shipment.
In terms of our Brexit preparations, we originally established a UK-focused Brexit team in the September after the referendum. We lifted that up to European level in November 2017 due to the size and scale of our operations and how our country networks, in the air and on the road, are all connected together across Europe.
The FedEx cross-functional working party is led by Trevor Hoyle, our Senior Vice President of Operations for Northern Europe. Our initial risk and opportunity analysis identified five key areas or prisms that we have taken forward in our planning.
• Network & Clearance which covers our Ground, Road & Air Networks along with our customs capability.
• A Customer workstream which is focused on what we need to support and help you, our customers.
• Data & Solutions which has looked at the impact on internal and external systems.
• People. We are a large employer in the UK with nearly 13,000 employees and 50,000 in Europe so we need to ensure they are supported through the change.
• Finance, where the team have been focused on the impact to our import VAT & Duty invoicing and deferment account.
The Brexit working group is supported by our regulatory and public affairs team who have kept the business up to date on all official publications. They are part of our industry trade associations who have been engaging with UK and EU departments.
Our data and solutions workstream has focused on validating and checking our systems can cater for a No Deal. Based on the principles that we expect goods between the UK & EU to require export and import clearance, we have confidence in our systems as they cater for this capability today. We have tested the end to end flows to validate our assumptions and to enable us to plan for the changes that could be required. The team has also identified the configuration changes needed to ensure our customer facing technology is ready for the change. On our .com shipping platforms, this is very much in our control, however if you use one of our deployed or integrated solutions then we will be in contact regarding some small changes that we will need you to make.
Network capacity, routes and modes of transport
For the road network that facilitates our Economy products, there has been speculation in the media about potential delays on the road, and at ports, should the UK leave the EU without a deal. Much of the speculation has been around the Eurotunnel and Dover – Calais crossings and the length of any delay.
As part of our preparations we have engaged with Eurotunnel, including visiting to review its plans; we have also analysed many ports in both the UK & EU working with the different ferry operators to understand the various options that are available. Our plans are to mitigate any potential risk or impact for the Economy/road shipments by spreading our truck movements across multiple crossing points.
Our multi-hub network in Europe enables us to have flexibility in the crossings we choose and be agile in our decision-making as the reality of Brexit happens. Unfortunately, any potential congestion at the ports is very much out of our hands as we rely on multiple government or third party agencies to ensure our trucks, along with everybody else, can move through the ports.
We acknowledge that the expectation is there will be some delays, with at least an additional 24 hours of transit time expected, but we will not speculate on how long the delay could be or how long it could last.
FedEx operates a comprehensive and global network which includes 55,000 road trips and more than 700 flights in Europe every week. We continue to plan to operate our network post-Brexit whatever the outcome and will continue to assess the network and our ability to meet transit times.
Today we have thousands of clearance staff around the globe that enable shipments to move across often complex borders and regulatory regimes on a daily basis. With 15 million parcels sent daily on 670 aircraft, 425,000 team members and expert local knowledge on every continent, we have got the scale and infrastructure to handle all of your import and export requirements now and in the future.
For both the air and road networks, we are confident in our plans and preparations. But our capabilities do rely on a number of third parties, such as clearance authorities and border force at both the ports and airports, to ensure everything continues to flow in a timely manner.
Our combined network and routing options provide added capabilities including air, with flexible capacity to suit demand. We are assessing how best to optimise our routing options against the likely outcomes.
FedEx uses multiple airports and ports in the UK and Europe, and this will continue to be the case post-Brexit to ensure we can provide the services required by our customers. These can differ from day to day according to the product or service chosen by the customer and they are different based on pickup and delivery address.
Current flight points into/out of the UK are Stansted, East Midlands, Birmingham, Heathrow, Newcastle, Belfast, Edinburgh & Glasgow.
Our road depots and hubs are strategically placed throughout the UK to ensure we meet transit times and service levels for all regions. We operate out of 54 depots in the UK and have hubs in Atherstone, Kingsbury, Lount, Dartford, Preston, Stoke, Milton Keynes and Swindon.
FedEx already handles and transport Dangerous Goods through our network in accordance with the relevant ADR and IATA rules and regulations. These are international rules and not solely bonded to the EU, therefore they will stay applicable to the UK after Brexit.
In terms of our air networks that support our Priority and Express services that many of our customers rely on, our team has worked with our US Airline and EU & UK operators to ensure our current flight schedule will very much operate as it does today. We have also seen the recent US-UK Open skies agreement, which is a positive outcome that protects our twice daily flights to/from the US into Stansted. Therefore we can continue to provide the next day connectivity that many of our customers use.
This is still being negotiated between the UK and the EU. If a formal withdrawal treaty is not signed, the UK’s membership of the EU Single Market and the EU Customs Union will cease. This outcome has become known as No Deal.
In this scenario, the free movement of goods across borders between the UK and EU would end. A proposed transition period from October 2019 to December 2020, designed to give businesses additional time to respond to the changes, would not apply. Goods traded between the UK and the EU would be subject to the same requirements as third country goods under the World Trade Organisation rules, including the payment of duty and tax.
Like all businesses we await further updates and details from the UK Government and EU authorities. As Brexit negotiations continue, FedEx will be Brexit ready. Our dedicated cross-functional Brexit working group continues to assess potential impacts and build plans to ensure we can steer your business through whatever changes might be in store.
For the details on what to expect for a No Deal and what it would mean, please see here (UK Government technical papers on preparing for a No Deal Brexit) or here (European Commission preparedness notices).
An Economic Operator Registration and Identification number (EORI) is a European Union registration and identification number for businesses which undertake the import or export of goods into or out of the EU. Businesses which have previously only traded within the EU will need an EORI number to trade outside the EU and if the UK leaves the EU with no agreement in place.
Applications can be made through your country government website. FedEx will need your UK EORI number when making customs declarations on your behalf.
We are aware that HMRC has begun phasing in the new Customs Declaration Service (CDS) to replace the existing Customs Handling of Import and Export Freight (CHIEF) system. We are fully engaged with the CDS team as a key stakeholder and will be ready to migrate to CDS on an agreed timetable. We will keep our customers informed of any changes that may affect them, and in the interim we will continue to support and make declarations to CHIEF.
This very much depends on what is agreed between the UK and EU authorities and could be different depending on the outcome of a transition deal, future trade agreement or a No Deal. For the details on what to expect for a No Deal and what it would mean, please see here (UK Government technical papers on preparing for a No Deal Brexit) or here (European Commission preparedness notices).
FedEx currently has bonded warehouse facilities in numerous locations. Any potential changes Brexit may require are still unknown at this stage and we continue to plan to be Brexit ready.
In a No Deal situation where the UK reverts to WTO trade standards, FedEx will incur additional costs for clearance, transport and handling both on exports and imports for shipments between the UK and EU. We are still learning more from the UK Government and EU Authorities on the terms we will have to adhere to post-Brexit and what the new reality will be in the event of a No Deal. If it becomes necessary to make any changes to our existing charges, we will advise customers and provide appropriate details in advance.
There are currently prohibited goods to and from most countries, generally published on the relevant country government websites. In addition there may be some restrictions depending on the types of goods, quantities, and country, along with specific restrictions for FedEx. Always check on fedex.com for further information.
FedEx operate under a similar scheme in the UK called CFSP. This enables the goods to move away from the port (sea/road or air) to be cleared inland.
This is already in place and we get the benefit of our vehicles moving away from the port. TSP is beneficial where the receiver has no current clearance process in place and needs the goods to move. We already have this so TSP is not applicable.
Our Global Clearance function has prepared for the additional workload that is expected for import and export processing for the UK and EU member state countries. The success of this capability very much relies on the accurate and complete data and paperwork that you, our customers, provide. We enable your goods to move and facilitate your business and this continues to be our aim, but it all works more efficiently when we receive all of the appropriate data and paperwork in a timely and complete nature.
A Power of Attorney is not required in the UK. However the Clearance Department would need to contact the importer for instruction and acceptance that FedEx can clear on their behalf, and to determine how they want to pay duty/tax. If the receiver is a regular customer an email with their instructions can be sent in advance and we can put this on to our clearance system.
FedEx Express has AEO status. This is an internationally recognised quality mark that covers every aspect of international movement of goods and the company who operates the supply chain – from customs compliance and compliance with taxation rules, to record keeping, financial solvency, proven standards of competence and compliance as well as safety and security.
Companies who hold AEO status may benefit from consignments being fast-tracked through customs controls, and when customs select AEO consignments for examination or inspection, they receive priority over non-AEOs, making the whole shipping process run more smoothly and efficiently.
Anyone involved in the international supply chain that carries out customs related activities in the EU can apply for AEO status, regardless of the size of their business. AEO is being actively supported and encouraged by the World Trade Organisation and is recognised in many countries outside the EU including China, Japan and USA.
After Brexit, Northern Ireland, as part of the United Kingdom, will no longer be in the European Union. The Irish Republic will continue to be a member of the EU. The UK and the EU continue to talk about the future trading relationship between Northern Ireland and the Irish Republic, including the so-called backstop arrangements.
However the outcome is still unknown at present. Whatever the outcome of these talks, FedEx will continue to support customers with their delivery and logistics needs in the United Kingdom, Northern Ireland, Irish Republic and beyond.
Goods moved by road from Europe to Ireland are routed through the UK. Post-Brexit in a No Deal scenario, the UK will sign up to the Common Transit Convention (CTC). This will cover goods transiting through the UK to/from EU countries, so there will be no change to current process.
For air shipments, the current system Remain on Board (ROB) will be used, so there will be no change to current process.
There is no requirement for you to complete or do anything different in respect of transhipping goods.
To avoid the potential delay at the Eurotunnel we have the option of a direct crossing from France to Ireland. We have long-established working relationships with both the ferry operators on this route, and this continues to be an option we are planning to implement.
Unfortunately, any potential congestion at the ports is very much out of our hands as we rely on multiple government or third party agencies to ensure our trucks, along with everybody else, can move through the ports.
We acknowledge that the expectation is there will be some delays, with at least an additional 24 hours of transit time expected, but we will not speculate on how long the delay could be or how long it could last.
If the UK leaves the EU without an agreement, the UK Government have advised in their no deal planning notices that they will introduce postponed accounting for import VAT on goods brought into the UK. This means that UK VAT registered businesses importing goods to the UK will be able to account for import VAT on their VAT return, rather than paying import VAT on or soon after the time that the goods arrive at the UK border. This will apply both to imports from the EU and non-EU countries. For the details on what to expect on VAT for businesses if there's no Brexit deal, please see here
The UK Government have advised that if the UK leaves the EU without an agreement, VAT registered UK businesses will continue to be able to zero-rate sales of goods to EU businesses but will not be required to complete EC (European Commission) sales lists.
As UK VAT registered businesses will not be required to complete an EC sales list, there will be changes as to how these sales are recorded. Those UK businesses exporting goods to EU businesses will need to retain evidence to prove that goods have left the UK, to support the zero-rating of the supply. Most businesses already maintain this type of evidence as part of current processes for exports to non-EU countries. Further changes will be communicated in due course by the UK Government.
If the UK leaves the EU without an agreement, then UK businesses will continue to be able to claim refunds of VAT from EU member states but in the future they will need to use the existing processes for non-EU businesses.
UK business will no longer have access to the EU VAT refund system. Reclaiming VAT processes vary across the EU and therefore UK businesses will need to make themselves aware of the processes in the individual countries where they incur costs and want to claim a refund.
*Correct at time of publishing but subject to change.