7 Reasons for Delayed Shipments
There are many reasons why your shipment may be delayed. Usually, this is caused by one important detail or declaration that’s been missed. However, delays can also be due to other circumstances, such as weather and issues at the port. We have highlighted seven key reasons for you to consider, so you can try to avoid shipment delays – see below:
1. Incorrect Customs Declarations
Examples of incorrect Customs Declarations include a missing value (see below) or an incorrect description of goods, which could result in an incorrect classification, leading to an incorrect licence (or the absence of a licence). Goods will be automatically selected due to the classification number used, resulting in the shipment being held and placed under query by HMRC. Another example of an incorrect Customs Declaration is the lack of an EORI number provided, which is required for both import and export – if this is missing, the full Customs entry cannot be completed. Generally, incorrect Customs Declarations are due to a lack of knowledge when completing commercial documentation for shipments, i.e. from a third country to the UK or vice versa. Always make sure you have all the information required for a Customs Declaration.
2. Incorrect Paperwork & Documents
Incorrect paperwork, even a seemingly minor detail, can cause severe delays to your shipment. Worse still, this could lead to you losing a customer who may not be prepared to wait until you resolve the issue. One common error is where people have missed off the value of the shipment.
Say you have an important customer flying into London to see a prototype – for this example, we will use a ‘high tech machine’. Your client wants to see how the machine works and is only on a 24-hour stopover. Your US office ships a prototype to you in the UK. However, the machine has been shipped with a proforma invoice stating, “prototype no value for Customs”. This means that the clearing agent won’t be able to start the clearance process because they do not have a value for the Customs Declaration. Therefore, the shipment is delayed as the machine remains in a Heathrow transit shed, awaiting the confirmation of its value from your US office.
Not only will this now incur extra costs in terms of storage fees, but the delay in clearance may lead to a special vehicle having to be arranged to transport the machine to your venue. Meanwhile, your customer decides they cannot wait in the UK any longer and leaves. This ‘minor’ detail has resulted in a missed sales opportunity, extra transport costs, wasted time and effort for both parties – all because of incorrect documentation.
3. Incorrect Licence and Certificates
This often happens in export, where goods are manufactured for a new client in a new territory that you are not familiar with. Missing or incorrect Import/Export licences and the Certificate of Origin will cause shipment delays. The goods might be collected by the freight forwarder, but they cannot move forward if no-one has checked whether an Export Licence is needed (or has the expertise to check this). Therefore, the goods could sit at the freight forwarder’s warehouse in the UK for a few weeks while this is checked. As a result, you cannot invoice the client – you will have to explain the delay, which could expose your incompetence. Without the correct Export Licence, neither the freight forwarder or the Customs clearing agent can prepare or submit your export declaration.
4. Customs Timescales
It is a common misnomer that HM Revenue and Customs (HMRC) cause delays. Nowadays, Customs clearance is dealt with electronically and usually within minutes for 99% of Customs entries. It is not HMRC timings that cause the problems – issues arise when there is missing or incomplete documents, resulting in a shipment not being ready to be submitted for clearance because the Customs clearance agent cannot submit the Customs entry. It is worth understanding the limits on how long goods arriving or leaving the UK can be held, how long goods can be presented at the export port (for exportation), as well as the time is takes for clearance to be achieved. If you have any concerns, please get in touch to speak to one of our consultants.
Seasonal events and holidays are an obvious cause of shipment delays that every business should already take into consideration. However, it is worth reminding your customers and suppliers of global holidays and events that may impact airlines and shipping schedules, e.g. hold cargo at peak travel times may result in freight being “bumped” to accommodate passengers. You may have taken the Christmas period into account, but are you aware of possible issues arising due to the Chinese New Year? This period dramatically impacts shipping schedules during January and February. Plus, Black Friday in November places immense stress on couriers and delivery companies. Overall, seasonal delays will tend to affect infrastructure, logistics capacity and networks, rather than being a Customs issue.
6. Volatility, i.e. strikes, weather
If you are shipping across the high seas, weather will be a strong factor for possible delays. With major ports in the far east such as Shanghai, these locations may be prone to typhoons. Despite its robust build, it could be too dangerous for a cargo ship to set sail. Plan your shipments in view of seasonal weather patterns. Plus, keep an eye on political murmurings in case they escalate into volatile situations, causing strikes, or in worst cases, port closures.
7. Fines or Impounded Stock
The very last thing you want is for your shipment to be impounded or to receive a fine.
If you are importing, be aware of “civil penalties” from HMRC, which can vary in size depending on the offence and your business compliance record. If you are exporting, Export Licence evasion can result in imprisonment. If you have made a serious import or export mistake, criminal investigations can arise. Unfortunately, ignorance is no line of defense, so always ask an expert for advice if you are unsure. Penalties can be reduced if reasonable care was taken, or where you have found an error and given a “voluntary disclosure” to HMRC.
When you are wading through the difficult area of shipping and Customs, a thorough understanding of international import and export requirements is essential. Research your ports so you are well aware of possible problems in advance – this may even determine whether you take on a contract or customer. There are tax and duty incentives available, but you will need to understand the complex area of Customs to benefit from these. Always talk to an expert if you are unsure.
Ultimately, a sound knowledge of your entire supply chain will help you secure your shipments, as well as spotting potential pitfalls and risks to your business. Effective performance management of each carrier and every part of the supply chain will ensure you can successfully fulfill your customer’s needs.
If your business has been affected by shipping delays or Customs issues, please call 01283 553099 to speak to one of our Customs compliance specialists.