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FBJ FREIGHT BUSINESS JOURNAL ISSUE 4 2011 EUROPE’S MULTIMODAL NEWSPAPER


Get AEO or you may lose out warns Davies Turner chief


More UK companies need to become Authorised Economic Operators, says the boss of Britain’s leading independent freight forwarder. Davies Turner chairman Philip Stephenson, warned that the country was lagging behind major European competitors.


He added that the process of becoming AEO- accredited was not as bureaucratic or difficult as many people realised and that, despite widespread cynicism, there would be commercial advantages within a reasonable time-scale. Davies Turner became one of the


first


multimodal forwarders in Europe to gain AEO accreditation three years ago. Stephenson said: “We had already gone down the ISO9000 route, so we’d looked pretty hard at all our systems anyway.” Gaining AEO was an extension of that process, he explained. “There is a great opportunity to examine how you work, revitalise your internal systems and use the occasion to redefine your business practices.”


The existing airfreight security regime of ‘known shippers’ also has very strong parallels with the AEO process and companies involved in airfreight may well find that they have already taken many of the necessary steps to gain accreditation. The UK in fact leads the world in airfreight security, having introduced its regime following the Lockerbie Pan Am bombing in 1988. In future, “the real commercial advantages with regards to customs clearance will become more apparent within the next couple of years,” he continued. It was likely that the recently introduced Import Control System (ICS), while initially a security measure, would become the


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Forwarders need to be recognized as professionals says Philip Stephenson


basis of a commercial pre-clearance system and AEO forwarders would be in pole position to take advantage of this. “We think it could happen from about 2013, so it’s not totally over the horizon,” said Stephenson. However, he added, it was “disquieting how few other UK companies have taken up this challenge. They are missing a trick when it comes to the new realities of freight forwarding in the highly regulated 21st century.”


Germany now has over 2,500 AEO accredited export/import companies but only 250 British operators and traders have the status - a figure surpassed by Poland and Italy and equal to


Sweden, one of the smaller EU economies. This was hardly befitting to the UK’s status as one of Europe’s major trading nations, said Stephenson. He added that he would welcome both consignors and other forwarders to the AEO fold. For the former, having as much of the supply chain covered by AEO as possible would be an advantage and would help the smooth functioning of international trade. But Davies Turner would also like to see other forwarders gain accreditation, as it would enhance the industry’s overall prestige and standing. “Freight forwarders would be recognised as professionals,” he said. A further commercial incentive to become accredited was the growing pressure in Europe to align and harmonise Customs practices amongst all member states, which may force UK shippers and importers benefiting from Customs procedures such as IPR and OPR to provide financial guarantees. These are already required in the rest of Europe, except for companies with AEO status, which enjoy a 100% reduction or waiver; others who can demonstrate sufficient compliance with AEO criteria benefit from a 50% reduction. Stephenson


concluded: “Clients trading


internationally are increasingly using forwarders with AEO accreditation, such as Davies Turner. The stark truth is that with so few UK companies compared to other European operators being awarded this status, more British firms must now regain the initiative and apply, or risk losing out over the next few years to foreign competition.”


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