‘Fear of getting it wrong’ harming SME export potential

Red tape has been blamed for UK clothing and footwear exports to the EU nosediving since Brexit. Still, I feel the basic human fear of getting things wrong might play an equally significant role in these worrying figures. 

A report from Retail Economics and Tradebyte said complexities at the border were a significant contributor to the 18 per cent fall in non-food goods shipped into the EU despite the burgeoning success of the eCommerce market.
If your parcel is over a certain value, you must pay import taxes at the destination. Businesses selling footwear and clothing can easily exceed the €150 threshold for B2C shipments. As soon as they do, the process becomes complicated.

Barriers that didn't exist pre-Brexit are now among the biggest hurdles for exporters, adding complexity to their work. Crucially, many fear getting things wrong and being fined by HMRC, which also risks negative media coverage and reputational issues. 

For many businesses, the reputational damage this can cause isn't worth the risk. One damning example is a clothing manufacturer we had discussions with – a successful business worried about leaving itself exposed to risk, which simply decided it was doing well enough in the UK market to stop exporting to Europe altogether.

Our aim as a business is to reduce this complexity, and this doesn't stop at paperwork. There are several opportunities to make this process much smoother. 

For example, holding goods in the UK but not paying duty. Suppose you're importing goods you plan to sell overseas. In that case, you can suspend them in a customs-bonded warehouse and re-export them without paying duty. As well as being a cash flow benefit, it gives you much greater flexibility with your inventory. It prevents double-duty payments if you simply import and then re-export.

Stock held under bond used to have to be segregated from the rest of the stock, but that is now virtual – all the stock is in the same place. When you work with an experienced broker, they can handle the complexity of the customs warehouse transactions based on your recorded activity.

This is a solution companies either aren't aware of, don't have the resources to implement, or apply for accreditation, and running the process is too complicated and complex.

In many cases, companies simply don't consider the customs aspect alongside the logistics aspect. Companies that don't see customs as a value-added exercise and simply throw it in with their logistics provider face risks, as the service they receive may be very basic.

Suppose customs is separate from the physical movement of goods. In that case, companies are free to move between providers and choose one with the experience and skills to optimise and simplify processes that enable value-adding cross-border activity. 

The wall that went up after Brexit has turned exporting into a substantial bureaucratic process for fashion retailers, for whom logistics is not a core competence. Customs is a black hole; only talk about it when it isn't working. 

Additionally, small businesses focus on one thing—selling goods, often in very niche areas. This can often mean their systems are not up to scratch, and documentation isn't ready to face the myriad of rules around exporting.

Despite all the complexities, there are solutions. Companies like ours can manage that border process and offer a frictionless border. It opened the doors to global exports, which many fashion retailers consider to have been closed by Brexit. 

For more information, look us up at the Customs Support Group.

Customs Support Group (CSG) is the leading European customs and trade solutions provider, facilitating seamless cross-border operations through cutting-edge digital innovations and unmatched industry expertise.

It has a presence in all major European strategic locations and the most comprehensive service offering in the market. Backed by more than 1,700 dedicated customs professionals, CSG ensures its clients' goods cross borders with minimal risk and maximum efficiency without hassle or delay.