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Logistics giant DPD cuts package shipments from UK to EU amid post-Brexit customs chaos

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Last minute from UK and EU post-Brexit trade agreement may have avoided the threat of tariffs for many goods crossing their important new border, but chaos has arrived nonetheless.

Europe’s largest parcel delivery network on Friday suspended road service from the UK to Europe – including the Republic of Ireland, which has the EU’s only land border with the UK . British parcels in the EU.

“The EU-UK trade and cooperation agreement has resulted in more complex processes and additional customs data requirements for parcels destined for Europe. This, along with delays and congestion at UK ports for canal crossings, has put additional pressure on our lead times and transit times, ”the company, which is owned by France. The post office and recently built Europe’s largest parcel hub in the UK, said in an emailed statement.

“We see up to 20% of packages with incorrect or incomplete data, forcing these packages to be returned to customers, so that the required data can be provided. Given this unprecedented set of circumstances, we believe it is right to take a break and review our road service in Europe, including the Republic of Ireland.

DPDgroup announced its intention to resume service on Wednesday January 13, after working with its clients to “validate and correct the data we have in our system”.

Last minute offer

Other logistics companies are also reporting big problems with the bureaucracy introduced by the trade deal signed on December 30, less than two days before it went into effect at the end of the Brexit transition period.

Part of the problem is the newly introduced need to send mail with customs declarations, where previously none was required.

Irish customs officials on Thursday evening announced a temporary relaxation customs requirements for goods arriving on ferries from Great Britain, to boost freight Meanwhile, UK carriers have been urged to expect tighter customs controls when entering France, from Monday.

But the new rules of origin requirements are a potentially more serious obstacle for businesses.

Under the terms of the trade agreement, goods crossing the border are not subject to any tariffs or duties as long as they originate from the EU or the UK – if not, they may be subject at tariffs standardized by the World Trade Organization.

Rules of Origin

This is all relatively easy to understand when the products are made entirely in the UK or the EU, but it becomes much more complicated when certain components come from outside that free trade area. At this point, companies have to turn to the customs code of the agreement, which defines the requirements product by product.

Dairy products, for example, are subject to a tariff if more than 20% of their weight comes from outside the zone; for white chocolate, the limit is 40%. Additionally: Processing external ingredients into a UK or EU food product may or may not render the product duty free, depending on how the food is made.

And on top of that, the trade deal does not allow mutual recognition of product conformity standards, giving customs officials something more to check.

“This simplifies the definition of the genome sequence”, said Marks & Spencer President Archie Norman on Thursday. M&S is one of a large group of UK retailers who are browsing their catalogs for potential problems and begging the EU and UK government to allow freer trade.

UK department store chain Debenhams last week closed its e-commerce operation in Ireland, in order to avoid tariffs. John Lewis, one of his biggest rivals, also temporarily stopped serving EU customers.

More to read absolutely retail cover of Fortune:



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