Port fees or highway robbery?

The Problem

Several of the inventory linked ports have quietly introduced transactional “Customs Clearance Fees” to their schedule of charges.  These are levied on all imports and replace actual “Customs Clearance Fees”, applied if a container is selected for examination by Border Force.

The question is, are they fair?

The charge varies according to the port, but it is always a little under £20.  If you have a container with a single load, you will receive a single charge for the associated import.  However, a container with multiple consignments will receive the charge for each associated unique consignment number (UCN) that is cleared, whether this is via a single or multiple import entries.

The inspection of a container by Border Force is an unlikely event.  At those ports that do not apply transactional “Customs Clearance Fees”, the importer would be charged considerably more than £20 for the port to manage the examination process.  The obvious question is, does this £20, which is effectively paid as an “insurance” measure against a potential inspection, reflect good value for money?

Let’s take a client of The Custom House that uses Southampton and London Gateway as an example.  Typically, this company has 8 – 12 UCNs associated with each container that it imports.  As the “Customs Clearance Fees” for these locations are £18.74, an additional £149.92 to £224.88 must be paid for each clearance.  As they deal with 30 containers a month, this means that the company’s average monthly additional charge against the possibility of inspection is £5,535.

When you consider that Border Force has never inspected one of its containers, you can understand why our client is bemused by the amount it is being charged in insurance against an event that almost certainly will never happen. In a worst case scenario, it may happen once a year. Effectively, our client would be paying £66.5K per year for the privilege of a single inspection.

The Solution

In the case of containers with multiple UCNs, the best solution is to remove the container from the offending port and clear the goods inland.  The port removal can be managed via a single transit declaration, which avoids the possibility of “Customs Clearance Fees”.

Prior to 1 July 2022, clearing transits inland has required the importer to hold Authorised Consignee and External Temporary Storage Facility (ETSF) approvals at the point of delivery.  Under a new simplification, a previously established Authorised Consignee can add additional points of delivery to its approval and arrange for goods under transit to be clearance at these locations without the need to setup new ETSFs.

The Custom House can add companies to its existing Authorised Consignee approval, create the transits necessary for movement and subsequent clearances inland.

In the case of our client cited above, it already saved £32.5K per year in moving its declarations over to The Custom House from its previous provider. Additionally, from 1 July, using transit with inland clearance will shave an additional £48.5K of its customs clearance costs. In all, therefore, working with The Custom House will have saved our client £81K per year.