Practical Advice

Logistics in the UK

About the Author

Peter Quantrill

Director General, British International Freight Association

2014 continues to challenge companies active in the delivery of freight and logistics services in the UK with ongoing debate on major issues, such as container weighing, a new high speed rail line (HS2), aviation security charging, cyber attacks, a review of the liner consortium block exemption, and modernization of EU customs, amongst many others.

In container shipping, services continue to be rationalized and the proposed P3 and G6 alliances, will have an impact on the number and frequency of services available to and from the UK.

In the UK ports sector, we are witnessing significant developments in all of the UK’s major container ports as well as the appearance of a new super port with the opening of the Thames Gateway.

In airfreight, the debate is firmly centered on UK aviation capacity, and the Airports Commission’s interim report in December 2013 narrowed the options, confirmed the logic, but did not place an actual time scale on much needed expansion of runway capacity.

Time spent studying developments within the UK’s intricate and comprehensive freight transport and logistics infrastructure and networks will give any U.S. company a flying start if it is thinking about trading with UK businesses and/or individuals, or setting up a manufacturing or retail facility in the country.

Like the USA, the UK has a significant number of freight forwarding and logistics businesses, which can collect your cargo as soon as it touches UK soil, see it through UK Customs and then move it on to the final destination. If instead you use a global freight forwarder that you are familiar with at home, they are likely to have UK branches that will do the same for you.

The range of potential transport providers is bewildering. With around 3,000 freight forwarders vying for your business, how can you decide which might be the best forwarder to handle your cargo? Naturally I would advise you to choose a BIFA member. With more than 1,500 corporate company members that account for more than 85 percent of all business handled by freight forwarders in the UK, there is plenty of choice – small, medium, or large.

Trade facilitation, regulatory compliance and supply chain security are important issues, which affect any company, involved in trading internationally to and from the UK.

With security of the supply chain security central to international trade post-9/11, you should also look at your potential UK partner’s commitment to this particular issue. Is the UK forwarder an accredited Authorized Economic Operator, or showing some commitment to becoming one?

The AEO scheme is a Europe-wide scheme to guarantee that the company complies with the latest security measures to guarantee the safety of the global supply chain. Like the C-TPAT that you will be familiar with, AEO status means that the company has undergone rigorous examination of its systems and methods of operation. Freight forwarders continue to lead the way in UK applications, despite the program’s aim of controlling all supply-chain operators.

The use of a UK freight forwarder will also be helpful in dealing with the electronic communication of data to HM Revenue & Customs (HMRC), the UK’s national tax gathering organization.

UK freight agents and the international trading community, which they serve, are in the midst of the biggest upheaval in EU Customs ever under the modernized Customs’ Code.

Davies Turner

Davies Turner become one of the first UK companies to gain AEO status in 2009

Never before in UK commerce has there been such a need as now to exchange data electronically with a greater number of people, commercial players as well as governments and customs players throughout the supply chain.

Customs authorities throughout the 27 EU states are engaged in a process of centralization and automation which aim to add security to the supply chain as well as speeding up processes and customs clearance, leading to a significant rise in compliance issues for any company involved in global trade and international supply chains.

BIFA members have also developed a wide range of value-added services for their clients of which you can take advantage. These can include local warehousing, order picking, sorting, labeling, packaging, and final assembly of goods prior to distribution.

With ports and airports constantly improving surface access, hinterland connections for freight are easily made on road or rail modes. Many port developments and expansion schemes are being planned and developed.

SURFACE FREIGHT

In the UK, road and rail freight services are key to the distribution of freight. The country is blessed with an efficient network of commercial ports and terminals and has multiple shipping line services. Ports can be all-purpose such as Bristol, Southampton, Tilbury, and Liverpool, ferry ports such as Dover and Poole, or dedicated container ports such as Felixstowe, Thamesport, and the recently opened London Gateway.

The majority of cargo goes through one of the top 16 ports and it is important to work with your shipping line partner to select the best port gateway in order to reduce the road or rail leg, and avoid many the choke points which can affect the UK road transport.

Decades of investment in the UK’s highway system has influenced the development of regional distribution centers (RDCs) which are strategically located within planned and modern business parks organized to have effective access to key road and highway routes.

A typical regional distribution centre

A typical regional distribution centre

Very few parts of the UK mainland are more than three to four hours from a mainline UK port and a comprehensive portfolio of ferry services makes access to mainland Europe relatively trouble free. The Eurotunnel rail link to and from France provides cross-Channel shuttles for rail freight, something especially relevant should you be considering further expansion into continental Europe at some point in the future.

Groupage trucking services for individual pallets or small consignments are still very popular in the UK, especially to serve many of the more remote destinations. While much of the UK is urbanized, there remain many companies and individuals located on the margins of the populated areas. This is particularly so in Scotland and northern England where groupage services are actively promoted to cut down on carbon use in transport.

All railroads in the UK, whether passenger and freight, are private companies operating services on a State-owned national rail network. Managers at the freight railroads have long recognized that the future of UK rail freight is in intermodal services. The fact that most of the railroad system was built to Victorian clearance standards means that there are none of the double-deck container trains you are familiar with at home.

However, significant investments in track improvements, is giving greater height clearance and enabling hi-cube containers to be handled at more ports.

In addition to the road industry’s business parks, the UK is blessed with rail-connected freight villages, also known as logistics parks, developed since the 1990s. These have been planned as part of point-to-point networks where containers can be delivered for collection and onward distribution by road. Key freight villages include Cabot Park in Bristol, DIRFT in the Midlands and Wakefield Europort in the north of England.

IN THE AIR

Air freight is also well served by the main cargo gateways of London Heathrow, Gatwick, Manchester, East Midlands, and Stansted, as well as the integrator hubs. For all airports, connections with the national highway grid are convenient and well-planned.

2013 saw the Government set up the Airports Commission under the chairmanship of Sir Howard Davies. His remit was to publish an interim report by the end of the year. He duly did so in December and for the short to medium term he came down on the side of expanding Heathrow and Gatwick. The next phase will be for the Commission to gather its thoughts on the longer-term requirements of our national aviation policy, including the prospect of a recommendation to build a new hub airport.

London Heathrow

London Heathrow

As ever, aviation security matters continue to play a central role in the UK supply chain and the focal point of interest at present centers on the transition of responsibility for security compliance from the Department for Transport (DfT) to the Civil Aviation Authority (CAA).

The CAA and the DfT are jointly drawing up a program to replace the random “direct and inspect” snapshot type compliance verification processes with an alternative based on continuous self-auditing quality assurance processes.

TRADE

The Union Customs Code (UCC) which passed into law on October 9th, 2013 is in all probability the single most important piece of Customs legislation to be passed by the European Commission since the original Customs Code.

It sets the Customs agenda for the foreseeable future and sees BIFA reviewing the UCC and its supporting Delegating and Implementing Acts and identifying concerns regarding guarantees, valuation, additional AEO and temporary storage.

SERVING NORTHERN IRELAND

Companies investing in the UK sometimes forget that the country also includes Northern Ireland. Whilst this may be physically separate from the UK mainland, there are plenty of direct ferry services, some freight only, which serve Belfast and Stranraer, Northern Ireland’s two main ports.

GET IN TOUCH

With a population that is predominantly urban, the UK’s towns and cities are places where businesses, commercial and residential addresses co-exist, which can cause headaches for the transport provider and any companies involved in delivering to the high street.

BIFA would recommend that any companies planning to invest in the UK take some time to observe the transport industry in action. We would also encourage you to contact potential forwarding partners, or the trade association itself, for hands-on, local knowledge.

Further Information

The logistics side of your business is as important to your success as any other part of your company’s activities. There is an abundance of further information about UK freight transport and logistics on BIFA’s website which I would encourage you to visit at www.bifa.org

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