Davies Turner says UK shippers are missing trick in failing to gain AEO status
Jul 26, 2011
Three years after becoming one of the first multimodal forwarders in Europe to gain AEO accreditation, the British independent international freight and logistics group, Davies Turner, has issued a rallying cry for more UK companies to follow suit.
Davies Turner & Co Ltd specialises in air and ocean freight, European trailer services and logistics based on its network of regional hubs and (customs controlled) warehouses, and was approved as a fully Authorised Economic Operator (AEO) just 18 months after Davies Turner Air Cargo Ltd became one of the first AEO-accredited companies anywhere in the European Union.
Philip Stephenson, Davies Turner Chairman, said other British operators could profitably follow his company's example or risk falling behind the greater AEO commitment in the rest of Europe.
Mr Stephenson adds: "AEO status should not just be seen as a security bolt-on to a freight forwarder's services, but as an integral component in the way the company functions and serves its clients. Three years ago we took the initiative in bringing to our customers the advantages that arise from AEO as well as known consignor status, not just through greater security in the supply chain but also through simplified Customs procedures. We even provide consultancy and bespoke training on request. What is now disquieting is how so few other UK companies have taken up this challenge in the years since. They are missing a trick when it comes to the new realities of freight forwarding in the highly regulated 21st century.
"AEO is still the WCO's gold standard for security and simplified Customs procedures, and Davies Turner reinforces this by continuing to invest in security hardware and systems, such as the latest X-ray equipment for scanning whole pallets, which we purchased and installed earlier this year. This is complemented by BIFA and DfT accredited staff training to meet the requirements of our trading partners in markets like the United States."
Recent figures show that Germany has upwards of 2,500 AEO accredited export/import companies while around just 250 British operators and traders have AEO status. This meagre figure is even surpassed by numbers in Poland and Italy and equals Sweden's total which has a fraction of the U.K's population.
Mr Stephenson says: "I think in the UK there is a concern that the application, compliance and accreditation process is hard, time-consuming and costly, all of which works as a disincentive to apply. I would suggest that managers deciding on whether to put their companies forward look at the AEO process from a different perspective. In the course of winning accreditation, there is a great opportunity to examine how you work, revitalise your internal systems and use the occasion to redefine your business practices.
There is now a further commercial incentive to become accredited due to 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 enables a 100% reduction/waiver, or else can demonstrate sufficient compliance with AEO criteria to benefit from a 50% reduction. It is therefore worth noting that use of such procedures may in future require compliance with the same standards as are needed for AEO.
"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."