BREXIT: Handling freight coming from or going to the EU? Brexit could leave you out in the cold
16 December 2020
BREXIT will mean changes in quite a few areas for businesses from 1 January 2021. If your business provides freight forwarding, transport or distribution services that involve goods that have either come from or are going to the European Union (or as things currently stand even Northern Ireland), one area you need to examine is the way you work with your customers. The changes to the rules will mean your business may be more exposed and you need to put in place protections now. If not, when something goes wrong, you could be left carrying the can.
None of us really know what will happen after 1 January 2021. One thing we do expect is that initially, at least, delays are to be expected and things will not be running smoothly. The knock-on impact of this is that someone in the supply chain will have to pay. Working out who that will be will usually be determined by what your trading terms say.
Different businesses operate on different trading terms. Some will use industry standard ones such as the RHA’s Conditions of Carriage. Other businesses will use their own versions and some will trade on their customers’ terms and conditions, and may not even know this.
Now is the time to dust off your trading terms and check the following key points are covered as a minimum:
- Your main obligations.
- General customer obligations.
- There is a clear division of who is doing what, given the changes coming into effect.
- Specific obligations on customers to obtain the required customs clearance needed for the goods to be shipped without delay.
- Protections to cover losses caused by your customer failing to do what they should.
- Other limitations on your liability for things that might not be your fault for any losses suffered resulting from the customer’s own errors or omissions (including in respect of Customs declarations).
Obviously, bargaining power is very relevant here and it may be that you are not in a position to make changes like this at this point. However, it makes sense to know what your risk profile is so that you can try to manage that potentially in other ways (such as your insurance cover), if that is the only option.
Further down the supply chain, if you use other operators to carry out shipping (for example) for you, then carrying out a similar exercise with them is also prudent so as to minimise any gap in potential liability.
Our commercial team can provide advice on what you need to be thinking about and can draft agreements documenting agreed terms for a fixed fee. Please contact them on 01254 828300 or email them at commercial@backhouses.co.uk. Their aim is to make sure you are not left out in the cold this winter.
