Brexit makes AEO ‘a necessity’ for freight firms

6/21/2017

Brexit is making Authorised Economic Operator (AEO) status “a necessity” for UK freight and logistics firms and is being increasingly demanded by customers, according to the Chartered Institute of Logistics and Transport (CILT) and others involved in European logistics.

CILT said today that it is encouraging all companies involved in the supply chain to become an Authorised Economic Operator, in order to ensure the United Kingdom operates frictionless borders post-Brexit. Following the UK’s EU referendum last summer, CILT said it had been working to present issues, solutions and advice regarding the practical implementation of a frictionless border for goods to the EU and the rest of the world.

The international professional body for individuals and companies involved with logistics and transport said it has noted a rise in the question ‘Do you hold AEO status?’ being on the list for preferred supplier listing and tenders. The institute is now urging government and the profession to “wake up to the advantage of being an AEO”.

Other freight and logistics representatives have also highlighted to Lloyd’s Loading List the potential value of AEO status after Brexit, especially in the event that the UK and the EU operate different customs systems after the UK leaves the European Union, with the UK now apparently heading to also leave the EU Customs Union. Freight intermediaries in the UK have previously seen relatively little benefit from AEO status compared with their counterparts in some other EU member states, industry representatives have observed.

But that is likely to change, if companies are to avoid physical customs checks at borders under a new UK-EU customs regime.

CILT chief executive Kevin Richardson commented: “It is an absolute necessity that companies throughout our supply chain start to adapt to become Authorised Economic Operators. AEO status is crucial to achieving the smooth transition of borders to market when we leave the European Union.

“The more Authorised Economic Operators we have operating in the United Kingdom will help ensure a successful Brexit and beyond.”

CILT described AEO status as an internationally recognised quality mark indicating that your role in the international supply chain is secure, and that your customs controls and procedures are efficient and compliant. “Alarmingly, in May 2017, only 568 companies in the UK currently hold AEO status and CILT is championing AEO certification to aid its members to gain competitive advantage, recognition for professional competence and trouble free border crossings,” the CILT said.

“The Institute is now raising awareness of the importance of becoming an AEO and that companies should press forward and attain the status before Brexit, so that they can take advantage of the benefits available now, and that they are also best placed to gain benefits post-Brexit.”

Richardson continued: “The focus of CILT’s position on behalf of members to the UK government is very much about keeping trade flowing across our borders post-Brexit. We believe that AEO status should give companies that have demonstrated their commitment to security in the supply chain, access to what would, in effect, be a green lane through UK ports and airports.

“Holding AEO status is going to be key to experiencing the frictionless border that industry wants and needs post-Brexit. Only AEOs will be trusted to be self-policing and sufficiently knowledgeable to be granted such ease of movement. Non-AEOs will undoubtedly get left behind and disadvantaged.”

The CILT said the route to becoming an AEO-certified operator is an extensive and detailed process, with approximately 95% of AEO applications failing. CILT said it will offer support, training and guidance to help operators understand AEO and assist them through the rigorous AEO application.

Susan Morley, director of Morley Consulting Training Limited, and chair of the CILT’s Customs and International Trade Compliance Forum, commented: “The application process takes months not weeks and companies need to prepare prior to submitting their applications. Now is the time to get started.”

CILT has over 33,000 members in over 32 countries worldwide.